Social Security Section 218 Agreements And Government Entity Restructuring

An intergovernmental instrumentity is an independent legal entity organized by two or more states to perform one or more governmental functions, i.e. police power, fiscal power and/or power in an important area. For the purposes of a Section 218 agreement, an intergovernmental agreement on instruments has state status. A public body can determine whether it has an agreement by contacting the state`s social security administrator. Workers hired by a state or local government prior to April 1, 1986 are exempt from mandatory Medicare HI coverage if they are employed continuously by the same state or local government employer since March 31, 1986 and are members of a group of public pension groups not covered by Social Security or Medicare. However, employers may voluntarily extend Medicare HI coverage to these workers under a Section 218 agreement. If a state or municipality employer wishes to offer Medicare coverage to the only for workers hired before April 1, 1986, the employer should contact its national social security insurer [no liability clause]. If the company has an agreement under Section 218, the company would have to pay taxes on Social Security and Medicare (or only Medicare) and declare some or all of its employees for Social Security and Medicare. The full social protection (compulsory social security tax) was imposed from 2 July 1991 for civil servants and municipal officials who are not members of a qualified public pension plan (FICA replacement plan) and who are not covered by an agreement provided for by Section 218, unless a specific exclusion applies under the law. A list of specific exclusions is included in Chapter 5 “Social Coverage and Medicare Coverage” of publication 963. PDF Each state has a designated official, the Social Security Administrator, who is responsible for managing the agreement under Section 218 of the State and monitoring the referendum process.

The state administrator informs public employers of social security and medical coverage for government and local government employees. Contact the State Administrator for your state If the staff of the designated entity is merged/transferred to an agency (for example. B a newly formed APP) with an agreement under Section 218, their social security ends.

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