These agreements (known as Section 218) represent a mutual commitment that ensures that the Social Security program is a viable part of the benefit programs available to government employees. Beginning in 1950, states were allowed to enter into voluntary agreements with the federal government to be subject to social security contributions for public sector employees. These agreements are called “Article 218 agreements” because they are authorized by Article 218 of the Social Security Act. Under the original U.S. Social Security Act of 1935, state and local (public) employees were excluded from Social Security due to state sovereignty guaranteed by the Tenth Amendment to the U.S. Constitution and concerns about the federal government`s power to levy taxes on state and local governments and their employees. To overcome this problem, the U.S. Social Security Act was amended by Congress in 1950 to allow any state to enter into voluntary social security agreements on behalf of the state and its political subdivisions that wanted social security coverage. As a general rule, the agreements of article 218 establish classifications of employees of the State and municipalities of social security or exempt them from social security coverage to the extent permitted by the Social Security Act.

These voluntary agreements between the federal and state governments represent a mutual commitment to ensuring that participation in the Social Security program is a sustainable part of public sector employee retirement programs. For general information on how public sector employees are covered by an agreement under Article 218 and when their social security and health insurance coverage is compulsory, the Social Security Administration website provides an overview of 218 agreements. All States, including the 50 States, Puerto Rico, the Virgin Islands and about 60 intergovernmental instruments, have an Article 218 agreement with the SSA. These agreements allow states, if they wish, to provide Medicare (HI) or Medicare HI social security and hospital insurance coverage only for public employees. An Article 218 agreement is a voluntary agreement between the state and the Social Security Administration (SSA) to provide Social Security and Medicare (HI) coverage or Medicare HI only to employees of state and local governments. These agreements are called “Article 218” agreements because they are authorized by Article 218 of the Social Security Act. Article 218 Agreements are irrevocable. But the law has changed. Most employees have Social Security coverage because their states and the SSA have made special arrangements known as Article 218 agreements. Step 1: The ETF requests the employer`s preparation documents. This documentation helps the ETF determine whether the employer is eligible to join the section 218 agreement. If your company name changes from the name specified in the article 218 agreement, contact us and provide documents indicating the name change (for example.

B minutes of meetings of the Board of Directors, approved resolutions, etc.). CalPERS will inform the Social Security Administration of the name change. There are two methods to enter into a section 218 agreement: Step 2: The ETF completes the amendment package with information and sends it to the SSA. Step 3: The Social Security Administration reviews the change and approves (or denies) coverage. The SSA`s decisions on amendments are final and cannot be appealed. For more information, see the Public Finance Review article “Common Errors in State and Local Government FICA and Public Retirement System Compliance” and the Federal-State Reference Guide (IRS Pub. 963) or contact the Colorado State Social Security Administrator at: 303-318-8060 or dean.conder@state.co.us. In its early days, the Social Security program did not include employees of state and local governments. For more information on the job retention exemption, see Revenue Ruling 2003-46, Revenue Ruling 86-88, Revenue Ruling 88-36, and Chapter 5: “Social Security and Medicare Coverage” in Publication 963 PDF.

Drafting documents may include a wisconsin territorial law, a Wisconsin state law, a citation in wisconsin laws, or any other legal process, such. B as a by-law or resolution that may have been used to establish the employer. In addition, certain services and posts may possibly be excluded from social security coverage under the Article 218 Agreement. Exclusions are limited to services listed as “optional exclusions” in Section 218 of the Social Security Act and must be specified in the amendment. Your comment will be read by our web staff, but not published. State or local government employee hired before April 1, 1986: The employee is exempt from mandatory medicare tax if he or she is a member of an eligible public pension system and all of the following requirements are met if: Note: ETF does not have access to certain individual information, such as.B. information about an employee`s entire employment history, Social security credits or possible spouse`s or survivor`s benefits. For more information, please contact the Social Security Administration at 1-800-772-1213 or visit their website at www.ssa.gov. Full social security coverage (compulsory social security tax) was required from 2 July 1991 for employees of public and local government who are not affiliated to an eligible public pension scheme (FICA replacement scheme) and who are not covered by an agreement under Article 218, unless a specific exclusion applies by law. A list of specific exclusions is provided in Chapter 5: “Social Security and Health Insurance Coverage” of Publication 963. PDF Contact us in advance about planned mergers, restructurings, transfers, etc. so that we can determine the employee status of these individuals.

In general, an agreement under Article 218 may be amended to broaden the scope of coverage (e.B. to remove certain optional exclusions), but not to reduce the amount of coverage (e.B. exclude future settings or add a new optional exclusion). In 1986 and 1991, Congress made significant legislative amendments to the Social Security Act and the Internal Revenue Code that made social security and health insurance coverage mandatory for certain public sector employees. These changes have greatly increased the role and responsibilities of state and local employers. Note: Wisconsin law requires WRS employers to secure their WRS-eligible employees for Social Security, with the exception of certain firefighters. State law also requires that all state employees and teachers be covered by the Article 218 agreement. Is the employee subject to an agreement under section 218 or an amendment to amend the agreement? A change amends a section 218 agreement to do the following: This is the first part of a series of four videos that helps employers of government agencies correct or prevent pay errors related to their unique participation in Social Security and/or Medicare coverage. The information in this presentation is not an official guide. While federal laws under Section 218 are consistent, each state has different coverage under those laws. Contact your state`s Section 218 administrator to understand your state`s specific coverage.

Employees who provide services covered by a federal-state agreement must pay FICA. Social security coverage received under a federal-state agreement cannot be terminated. The employee may also be covered by a pension plan, but this must be in addition to the FICA coverage. Under the act, certain services to employees are compulsorily excluded from social security by virtue of an agreement under Article 218. In addition, certain services and items, if required by the State, may be excluded from social security under Article 218 of the State (optional exclusions). The services that a state may possibly exclude are limited to those listed as optional exclusions in section 218 of the Act. Since 20 April 1983, agreements under Article 218 have been irrevocable. Once coverage is provided, it cannot be terminated.

An agreement under section 218 may be entered into retroactively for a maximum period of five years from the date of federal approval of the agreement. It takes about six months to get federal approval. For example, if a retroactive application is submitted in 2017 and approved in 2018, the coverage could be applied retroactively to the 2013 coverage year. Example: Some employees of the Water Department of the City of Laguna Lakes have been transferred to the Laguna Lakes Water District. Your coverage depends on whether the Laguna Lakes Water District has a Section 218 agreement. .