TN 2 (09-09)

DI 23540.001 Medicare for Qualified Government Employment (MQGE) Cases

A. Background on MQGE for Federal employees

Prior to 1983, Federal employees who were covered under a Federal retirement system did not have Federal Insurance Contributions Act (FICA) taxes withheld from their Federal earnings. As a result, their Federal earnings could not be used to insure them for Title II benefits or for Hospital Insurance (HI).

Section 278 of Public Law 97-248 (Tax Equity and Fiscal Responsibility Act of 1982) amended the law, effective January 1, 1983, to provide for deduction of the HI portion of the FICA tax from Federal earnings, thereby allowing Federal earnings to be used to insure employees for HI. These individuals earn government employment quarters of coverage (GEQCs), which may be used to insure them for HI, but not for Title II benefits.

These GEQCs are credited for the same amount of wages and in the same way as Social Security quarters of coverage (SSQCs). They can be used alone, or in combination with SSQCs for work in covered employment, to meet the insured status requirements for Medicare. Further, the law contains a transitional provision that provides that any Federal employee who was an employee during January 1983, received deemed GEQCs for his or her Federal service prior to January 1983, where there are insufficient SSQCs or GEQCs to be insured. Thus, it is possible for Federal employees to meet insured status in January 1983, and to be eligible to file claims for Medicare.

Federal employees hired after 12/31/83 are subject to the full FICA tax and earn regular SSQCs. In addition, Federal employees need the same number of total QCs to qualify for Medicare as they need to qualify under SS and must meet the regular requirements as to age, disability, or end-stage renal disease (ESRD) to have Medicare coverage.

NOTE: Centers for Medicare & Medicaid Services (CMS) is responsible for providing PolicyNet instructions concerning Medicare policy. If there are any discrepancies between other Program Operations Manual System (POMS) instructions and the Medicare policy in the HI POMS, the HI POMS take precedence.

See Also:

  • RS 00301.160 – Insured Status Based on Medicare Qualified Government Employment

  • HI 00801.400 – Medicare Qualified Government Employment (MQGE)

B. Background on MQGE for State and local employees

Prior to 04/01/86, State and local government employees were subject to payment of the full FICA tax only if they were covered under a voluntary Social Security agreement under Section 218 of the Act. Other State and local employees paid no FICA taxes.

Section 13205 of Public Law 99-272 (Consolidated Omnibus Budget Reconciliation Act of 1985) amended the law to provide that State and local government employees who were hired after 03/31/86, and are not covered under a Section 218 agreement, are subject to the HI portion of the FICA tax. These individuals earn GEQCs for Medicare purposes in the same manner that Federal employees earn QCs for Medicare insured status purposes. See “Mandatory Social Security and Medicare Provisions” SL 50001.501.

The State may elect to cover employees hired before 04/01/86 for the HI portion of the FICA tax by requesting an agreement or modification of its existing agreement under Section 218. There is no provision for granting deemed HI wage credits for State or local government employment prior to 1986. The first possible month of HI entitlement based on State or local GEQCs is April 1986.

C. Waiting period for Medicare

Disability Insurance Beneficiaries (DIB) and Disabled Widow(er) Beneficiaries (DWB) must serve a 5-month waiting period and a 24-month qualifying period of disability before Medicare coverage can begin. A Childhood Disability Beneficiary (CDB) must be under a disability for 24 months before Medicare coverage begins.

EXCEPTION: Section 115 of the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000, waives the 24-month waiting period for beneficiaries whose primary or secondary diagnosis is Amyotrophic Lateral Sclerosis (ALS), also known as Lou Gehrig’s disease. The diagnosis code (either primary (DIG) or secondary (SDIG)) is 3350. See “Amyotrophic Lateral Sclerosis (ALS) Medicare Waiting Period Waived – Disability Determination Services (DDS)” DI 23580.001.

NOTE: Entitlement to HI due to ESRD begins in accordance with “Date of Entitlement – General