Is Health Insurance Exempt From Social Security Tax? 
Social security taxes are collected through payroll deductions and appear on your pay stub as FICA . Both employees and employers pay the tax based upon a percentage of income . The percentages change as income increases . Group health insurance premiums funded by employers do not count as income , and are not subject to FICA taxation . Employees typically elect to pay their portion of healthcare premiums using pretax elections , which reduces reported income and the amount of FICA taxes paid . 