Since the 2009 report was transmitted to Congress on May 12, 2009, several laws were enacted that are expected to have financial effects on the OASDI program.
The No Social Security Benefits for Prisoners Act of 2009, Public Law 111‑117, was enacted on December 16, 2009. It amends the Social Security Act to prohibit retroactive payments to individuals during periods for which such individuals are prisoners, probation or parole violators, or fugitive felons. These retroactive benefits will not be paid until the beneficiary is no longer a prisoner, probation or parole violator, or fugitive felon. This law is estimated to have a negligible financial effect on the OASDI program over the short-range and long-range periods.
The Social Security Disability Applicants’ Access to Professional Representation Act of 2010, Public Law 111-142, was enacted on February 27, 2010. It includes a provision to permanently extend attorney fee withholding procedures to certain qualified non-attorney representatives. This law is estimated to have a negligible financial effect on the OASDI program over the short-range and long-range periods.
The Hiring Incentives to Restore Employment (HIRE) Act, Public Law 111‑147, was enacted on March 18, 2010. It exempts most employers from paying the employer share of OASDI tax on wages paid after the date of enactment and before January 1, 2011 to certain qualified individuals hired and employed after February 3, 2010. This law has no direct financial effect on the OASDI program because the tax amounts not paid by employers will instead be transferred from the General Fund of the Treasury to the OASDI Trust Funds. However, a small increase in total employment is expected to result for 2010 due to this tax incentive. This law is estimated to have a negligible financial effect on the OASDI program over the short-range and long-range periods.
The Patient Protection and Affordable Care Act, Public Law 111‑148, was enacted on March 23, 2010. The Health Care and Education Reconciliation Act of 2010, Public Law 111‑152, was enacted on March 30, 2010. These two laws result in numerous changes in the way health care will be utilized and paid for in the United States. The main impact of these two laws on the financial status of the OASDI program is an expected increase in the share of employee compensation that will be paid in wages covered and taxed by the OASDI program. Premiums paid by employees and employers for employer-sponsored group health insurance are excluded from OASDI coverage and thus are not subject to the payroll tax. This exclusion is not altered by the new laws. However, under these new laws, a combination of federal subsidies for individual insurance through the health benefit exchanges, penalties for being uninsured or not offering coverage, an excise tax on employer-sponsored group health insurance cost, and anticipated competitive premiums from health benefit exchanges are expected to slow the rate of growth in the total cost of employer-sponsored group health insurance. Most of this cost reduction is assumed to result in an increase in the share of employee compensation that will be provided in wages that will be subject to the Social Security payroll tax. These two laws together are estimated to have a significant financial effect on the OASDI program over the short-range and long-range periods.
The financial projections shown in this report include the effects of these laws. See sections
IV.A4 and
IV.B7 of this report for further discussion of the nature and magnitude of the effect of these laws on the financial status of the OASDI program.
