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Social Security Section 218 Agreement

Optional exclusion – The services that federal law provides to the state the option of including or excluding insurance coverage in the contract. The political sub-division may request the exclusion of the following services: services provided by election officials and election officials who have paid less than the legal threshold for the calendar year; unless the section 218 agreement applies to election officials. There are thousands of local authorities (cities, counties, special districts, school districts, JPAs) in California. Of these, only 500 parties are parties to the agreement of paragraph 218 with the SSA. This means that there are thousands of people who do not have an agreement under Section 218. Under the Social Security Act, certain benefits for workers must be excluded from social protection in accordance with an agreement provided for in Section 218. At the request of the state (or the local agency), certain services and agencies may be excluded from social protection in accordance with the agreement provided for in Section 218 of the State. In 1991, social security became mandatory for civil servants and local authorities, unless they are members of a qualified public pension scheme (sometimes referred to as a « social security replacement plan » or « replacement plan ») or if they are covered by a Section 218 agreement. In other words, an employee of a local government who does not have an agreement under Section 218 must be covered by social security, unless the employee participates in a replacement plan. An agreement under Section 218 is a voluntary agreement between the state and the Social Security Administration (SSA), which provides coverage for Social Insurance and Hospital Insurance (MEDICARE) or Medicare HI-only for employees of the state and local authorities.

These agreements are called « Section 218 » because they are authorized by Section 218 of the Social Security Act. Section 218 of the agreements is irrevocable. All states, including the 50 states, Puerto Rico, the Virgin Islands and some 60 intergovernmental instruments have entered into an agreement with SSA under Section 218. These agreements allow states to grant, if they wish, Social Insurance and Medicare (MEDICARE) or Medicare for public sector employees. Amendment – An amendment to the written agreement between the state and the Social Security Administration to implement the initial agreement for the services of workers who have not yet been covered by social security, or to amend the original agreement in other respects. Here is the « gotcha: » If an employee of a local government who does not have an agreement under Section 218 participates in a replacement plan, that employee cannot also participate in social security. This is a potentially very important problem, as there are dozens, if not hundreds, of local governments and instrumentalities in California in California, who do not have an agreement under Section 218, but who participate in Social Security on a « voluntary » basis. It is clear that they can do so as long as they do not provide replacement benefits to any of their FICA insured employees.

The problem is that most of them offer « unknowing » replacement plan type benefits. In this case, this can be done on the basis of staff-for-employee and salary to the other. As a result, affected workers cannot have employers or employees pay wage contributions on their behalf. In addition, these pay periods cannot be charged on workers` final social security benefits. The original Section 218 () agreement for the State of Florida and the Social Security Administration came into effect on January 1, 1956. Since then, Florida has introduced more than 650 amendments to the original 218 agreement on behalf of pension plans or public employers.