Because most types of government employees have their own pension plans it can impact a worker’s Social Security earnings and their benefits for disability or retirement purposes. Here is a closer look.
How Are State And Local Government Employees Covered By Social Security And Medicare?
State and local government employees are covered for Social Security and Medicare in one of two ways. Their coverage is either: (1) mandated by law; or (2) under a Section 218 agreement between the State and SSA.
What Is A Section 218 Agreement?
A Section 218 agreement is a voluntary agreement between a State and SSA to provide Social Security and/or Medicare only coverage for State and local government employees. Section 218 agreements are authorized under section 218 of the Social Security Act. Under the 218 agreement, the State decides (within the limits of Federal and State law) whether to cover retirement system groups, non-retirement system groups, or both.
What Types Of Protections Are Provided Under A Section 218 Agreement?
A Section 218 agreement provides Old-Age, Survivors, Disability and Hospital Insurance (OASDHI) protection. Employees covered under a Section 218 agreement have the same Social Security and Medicare Hospital Insurance (HI) coverage and benefit rights as employees in the private sector who are mandatorily covered for Social Security and Medicare.
Who Is Covered Under Medicare Hospital Insurance?
If you are a State or local government employee hired or rehired after March 31, 1986, you are covered for Medicare Hospital Insurance (HI), unless the law excludes your services from coverage (see §1001).
If you were hired before April 1, 1986, you are exempt from mandatory Medicare HI if you meet the following conditions:
You have been working continuously for the same State or local government employer since March 31, 1986; and
You are a member of a public retirement system.
Public employers may obtain Medicare HI coverage for employees hired before April 1, 1986 through a Section 218 agreement (see §1000.2), by contacting the State Social Security Administrator.
Is Social Security And Medicare Hospital Insurance Coverage Mandatory?
Beginning July 2, 1991, Social Security and Medicare HI coverage is mandatory for State and local government employees who meet the following conditions:
They are not members of a public retirement system; and
They are not covered under a Section 218 agreement, unless excluded by law (see §1001).
Can Police Officers And Firefighters, Covered By A Retirement System, Be Covered For Social Security Under A Section 218 Agreement?
Yes. Police officers and firefighters covered by a retirement system can be covered under a Section 218 agreement (see §1000.2). However, the State must first conduct a majority vote referendum, or, if allowed, a divided vote referendum. Prior to August 15,1994, only the following 23 States (including interstate instrumentalities) were authorized to provide coverage for police officer and firefighter positions under a retirement system.
