Identification Number:
SL 30001 TN 07
Intended Audience:See Transmittal Sheet
Originating Office:ORDP OISP
Title:Coverage Under Section 218 Agreements
Type:POMS Transmittals
Program:Title II (RSI)
Link To Reference:
 
PROGRAM OPERATIONS MANUAL SYSTEM
Part 19 - State and Local Coverage Handbook
Chapter 300 - Coverage Under Section 218 Agreements
Subchapter 01 - Coverage Under Section 218 Agreements
Transmittal No. 07, 01/2018

Audience

State Social Security Administrators
RO: RSI Team Leaders
District Managers
Regional General Counsel Staff

Originating Component

OISP

Effective Date

Upon Receipt

Background

We reviewed current policy and consulted with the Regional Office Specialists regarding the involvement of the Parallel Social Security Office (PSSO) in the Section 218 Agreement and Modification process. As a result, we have determined that it is unnecessary to involve the PSSO in this process. This transmittal streamlines the policy to remove the involvement of the PSSO. We are also changing the format of some of the sections for clarity.

Summary of Changes

SL 30001.302 Definition of Terms for Section 218

  • We updated the title of the section and added a subsection heading with the lead in sentence to the glossary.
  • We removed the definition of the PSSO.
  • We moved the definition for Required Exclusion to follow alphabetical order.
  • We added hyperlinks to Section 218 of the Social Security Act.

SL 30001.305 Interstate Instrumentalities
  • We removed the reference to the PSSO in the last sentence of the policy and spelled out Regional Office.
  • We added subsection headings A, B, C, and D to divide the content in the section and revised the language for clarit
  • We added hyperlinks to Section 218 of the Social Security Act.

SL 30001.390 Entity No Longer in Existence or Inactivated
  • We replaced the instruction to send a copy of the notice to the PSSO with instruction to send the notice to the Regional Office
  • We added subsection headings A and B to divide the content in the section. In addition, we revised the language for clarity.

SL 30001.302 Definition of Terms for Section 218

The definitions in this section will familiarize you with the terms used in this subchapter as well as other sections of the POMs.

The following terms are used in this subchapter:

  • Absolute coverage group – a permanent grouping of employees, e.g. all the employees of a city or town. It is a coverage group for coverage purposes as well as for reporting purposes. When used for coverage purposes, the term also refers to groups of employees whose positions are not under a retirement system; such groups are also referred to as Section 218(b)(5) coverage groups.

  • Act – Social Security Act

  • Coverage groups – employee groupings by which employees are covered under a Section 218 Agreement.

  • Employee – as defined in Sections 210(j) and 218(b)(3) of the Social Security Act. It includes a public officer of the State or political subdivision.

  • Governmental function – traditional function of government, legislative, executive, judicial, e.g., the control and prevention of crime, promoting the general welfare, providing for public safety

  • HI – Hospital Insurance (Medicare Part A)

  • Ineligibles - individuals in positions covered by a public retirement system who are excluded from membership in the system because of age, number of hours worked, or date of hiring

  • Interstate instrumentality – independent legal entity organized by two or more States to carry out one or more governmental functions. For example, the New Jersey-New York Port Authority. For purposes of a Section 218 Agreement, an interstate instrumentality has the status of a State.

  • Instrumentality – governmental organizations created by the State or by political subdivisions with authority to act in a legally independent capacity to accomplish the specific purposes for which they were created.

  • Modification – an amendment to an original Section 218 Agreement to extend coverage to additional groups of employees or to implement changes in Federal and State laws.

  • NCSSSA – National Conference of State Social Security Administrators

  • Nonproprietary functions – governmental function of a State or political subdivision, i.e., maintaining order

  • OASDHI – Old-Age, Survivors, Disability and Hospital Insurance

  • Optional exclusions – services the Act permits a State to include or exclude from coverage under a Section 218 Agreement

  • Optionals - employees who are in positions that make them eligible to join the retirement system but have not exercised their option to do so

  • Political subdivision – a separate legal entity of a State that has governmental powers and functions. Political subdivisions ordinarily include counties, cities, school districts and other similar governmental entities.

  • Proprietary function – a function of a governmental entity that is other than governmental in nature

  • Required exclusions – services that are excluded from Social Security and Medicare coverage under Sections 218 and 210 of the Act

  • Retirement system – an annuity, pension, retirement, or similar fund or system established by a State or political subdivision for the purpose of paying retirement benefits to employees. For Section 218 purposes, whether a retirement system meets the minimum benefit requirements under the Internal Revenue Code is irrelevant.

  • Retirement system coverage group – a group of employees whose positions are covered under a retirement system by referendum under the provisions of Section 218(d).

  • Section 218 Agreement – A written agreement between the State and SSA, pursuant to Section 218 of the Act, to provide Social Security and Medicare-HI (Hospital Insurance) or Medicare-HI only coverage for State and local government employees.

  • State – for Section 218 purposes, the term “State” includes the 50 States, Puerto Rico, the Virgin Islands and interstate instrumentalities. It does not include the District of Columbia, Guam or American Samoa.

  • State Social Security Administrator – principal State official designated to act for the State in administering and maintaining the State’s Section 218 Agreement with the SSA.

 

SL 30001.305 Interstate Instrumentalities

A.  Interstate instrumentality for Section 218 coverage

An interstate instrumentality is a State for Section 218 coverage purposes. An instrumentality must have legal authorization to enter into an agreement. This rule applies only to original agreements and not to modifications to existing 218 agreements. For agreements and modifications exhibits see SL 40001.490A. The enabling acts of member States, the statutes, or other authority establishing the instrumentality usually grants this authority.

NOTE: The consent of Congress is required for the creation of some interstate instrumentalities.

B.   Interstate instrumentality and retirement system coverage groups

An interstate instrumentality may extend coverage to absolute and retirement system coverage groups. All policies relating to coverage for States are equally applicable to instrumentalities. A State retirement system that covers employees of an interstate instrumentality is considered a retirement system established by the instrumentality. As with any retirement system coverage group, coverage can be extended only after a referendum has been held for members of the retirement system. Interstate instrumentalities are authorized to use:

C. Certifying the referendum for instrumentality

The instrumentality must meet all required conditions for holding a referendum for its employees, and a designated official must certify the referendum. See SL 30001.323 for a list of the required referendum conditions. The designated official(s) may be delineated in the enabling act, statutes or other authorities, e.g., from the Board of Directors or the Chairman. All interstate instrumentalities can provide coverage for police officers and firefighters in positions covered under a retirement system.

D. Educating and notifying instrumentality employees on referendum procedures

Since there is no specific State Administrator to educate and notify the instrumentality's employees on the referendum procedures, nor to conduct or ensure the referendum proceeds correctly, the Regional Office Section 218 specialist must assume these duties.

SL 30001.390 Entity No Longer in Existence or Inactivated

A. What is a dissolved entity? 

A dissolved entity is an entity that has legally dissolved and no longer exists. If an entity legally dissolves or is no longer in existence, the State should send a notice to the Regional Office (RO) with evidence of the dissolution. The Regional Attorney reviews this material. If the evidence establishes that the entity has ceased to exist or legally dissolved, SSA records are annota