|SL 10001 TN 03|
|Intended Audience:||See Transmittal Sheet|
|Originating Office:||ORDP OISP|
|Program:||Title II (RSI)|
|Link To Reference:|
PROGRAM OPERATIONS MANUAL SYSTEM
Part 19 - State and Local Coverage Handbook
Chapter 100 - Introduction to State and Local Coverage Handbook
Subchapter 01 - Introduction
Transmittal No. 03, 01/2018
State Social Security Administrators
RO: RSI Team Leaders
Regional General Counsel Staff
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. This transmittal streamlines the policy to remove the unnecessary step of the PSSO.
In addition, we are adding instructions in SL 10001.130 and SL 10004.140 to provide guidance to State Administrators and Regional Offices regarding SSA sending letters to the State Governor advocating for the State Social Security Administrator position. These letters will reinforce the ongoing services of the State Administrators.
Summary of Changes
SL 10001.101 Purpose of SLCH
Updating this section to remove the reference to the parallel office (PSSO) in the first sentence of the policy. We are also rephrasing the first paragraph for clarity and making grammatical revisions throughout the section.
SL 10001.130 State Social Security Administrator Responsibilities
We made the following changes to this section:
Subsection B.1 –Amended this subsection by adding bullet “k” with additional responsibility for State Administrators to request SSA to send letter to the State Governor on case-by-case basis advocating for the State Social Security Administrator position to reinforce the ongoing services of the State Administrators.
Subsection B.2.- Removed the instructions in second bullet that required State Administrators to send a notice to the SSA parallel Social Security Office when the state administrator changes. Removed the pole location and cubicle number portion of the mailing address for the Office of Income Security Programs and replaced it with Attn: Coverage and Earnings Team.
Subsection B.3- Removed the instruction in second bullet advising the State Administrators to contact the SSA parallel Social Security Office and as needed. In addition, removed the instruction in formerly third bullet, now second bullet advising the State administrators to contact the national offices as needed based on the initiatives to refocus the communication at the regional level.
Subsection B.8 -Removed the instruction advising the State Administrators to seek guidance from the state’s PSSO.
SL 10001.140 SSA Program Administration
We made the following changes to this section:
Subsection A - Removed this subsection, which described the role of the PSSO.
Subsection B – Moved the first two bullets denoting responsibilities of the PSSO (formerly in subsection A) to subsection B to reflect that the Regional Office takes these actions. Removed the third and fourth bullets in the original subsection A. Updated the letters denoting the subsections after the removal of the original subsection A. Also, added last bullet reflecting instructions regarding sending letter to the State Governor on behalf of State Administrators.
SL 10001.150 Communication between the States and SSA
We are archiving this duplicate POMS section.
The State and Local Coverage Handbook (SLCH) provides
guidelines on the administration of the Social Security and Medicare
coverage provisions under Sections 218 and 210 of the Social Security Act
(Act) as they relate to state and local government employment. These
guidelines are for primary use by State Social Security Administrators and
Social Security's regional staff.
The SLCH does not amend or supersede existing laws and regulations and
individuals should not use or cite it as authority for technical matters.
If the content of the SLCH conflicts with the Act, another relevant
statute, or any Social Security regulations or rulings, those authorities
have priority over the SLCH.
The Social Security and Medicare coverage provisions for State and local
government employees are complex and unique. To administer the coverage
provisions for State and local government employees requires knowledge and
understanding of the Section 218 Agreements, the mandatory Social Security
and Medicare coverage provisions, the State laws, and how all of these
interrelate to provide Social Security and Medicare coverage for public
Social Security's regulations require States to designate a State official
to act on the State's behalf in administering the State's Section 218
Agreement. There is no comparable requirement in administering the
mandatory Social Security and Medicare coverage provisions under Section
210. Therefore, it is important for States to understand how the Section
218 and 210 coverage provisions interrelate.
The SLCH was originally a paper publication that existed separately from
the rest of the Social Security's operations manuals and included the
necessary information and materials needed to carry out the Social
Security and Medicare coverage provisions for State and local government
In keeping with its ongoing paper reduction program as well as utilizing a
format that would easily permit continual procedural and editorial
changes, Social Security decided that the SLCH would be made an online
publication; and the best way to accomplish this was to integrate the SLCH
into Social Security's online Program Operations Manual
System. As of its December 2003 online publication, the online
SLCH became the version of record, obsoleting previous paper editions, and
the only version that will have procedural updates.
SL 10001.130 State Social Security Administrator Responsibilities
C.F.R. §404.1204 requires each State to designate at least one
State official to act for the State in administering that State's Section
218 agreement. This official, the State Social Security Administrator,
acts for the State with respect to its responsibilities for maintaining
and administering the provisions of the agreement and the proper
application of Social Security and Medicare. Therefore, it is important
for state administrators to understand how the Social Security and
Medicare coverage provisions interrelate.
A. Introduction to State Social Security Administrators
When the Social Security Act (the Act) was enacted in 1935, Social
Security coverage was limited to private sector employees. States, their
political subdivisions, and interstate instrumentalities, were not
originally included in this legislation. However, with the Social Security
Amendments of 1950, Congress created Section 218 of the Act (codified at
42 U.S.C. §418). Effective January 1, 1951, Social Security coverage
became available to State and local government employees through a unique
Federal-State agreement authorized by Section 218. These agreements,
referred to as Section 218 Agreements, represent a mutual commitment to
assure that participation in the Social Security program is a viable part
of employee benefit programs available to public employees. Today, every
State, Puerto Rico, the Virgin Islands, as well as numerous interstate
instrumentalities, have a Section 218 Agreement with SSA. This is
equivalent to providing Social Security and Medicare or Medicare-only
coverage to approximately 22 million employees.
In order to effectively implement coverage at the State level, SSA,
C.F.R. §404.1204 , requires that each State designate a State
Social Security Administrator to act on the State’s behalf with
respect to its responsibilities for maintaining and administering the
provisions of the Agreement. The role of a state administrator is
challenging, but through a cooperative relationship with SSA, the Internal
Revenue Service (IRS), and the National Conference of State Social
Security Administrators (NCSSSA) — every state administrator,
whether experienced or inexperienced, is guaranteed access to a network of
knowledge and resources.
B. Responsibilities of State Social Security Administrators
SSA regulations require that each State designate a state administrator,
to act on the State’s behalf with respect to its responsibilities
for maintaining and administering the provisions of the Section 218
1. Administer Section 218 coverage
The state administrator is responsible for administering all aspects of
Section 218 coverage, including interpreting its provisions, and insuring
proper application of Social Security coverage to all State and political
subdivision employees. The basic responsibilities of the state
administrator are to:
Permanently maintain physical custody of the following original documents:
Section 218 Agreements,
ballots from referenda and,
letters and other forms of correspondence between the entities and the
State, SSA, and IRS, which could affect future coverage;
Determine which State and political subdivision employees’ positions
are covered by approved Section 218 Agreements and modifications;
Work with employers to guarantee proper Social Security and Medicare
withholding and reporting;
Take appropriate steps with respect to the execution of modifications to
the original agreement to include additional coverage groups, correct
errors in coverage, or identify additional political subdivisions that
join a covered retirement system;
Conduct referenda on the coverage of services of individuals in positions
under a retirement system;
Identify new, inactive, merged or dissolved political subdivisions, and
take the appropriate coverage related action;
Provide SSA with notice and evidence of the legal dissolution of covered
State or political subdivision entities;
Provide guidance to government employers on issues related to Section 218
Work with SSA and the IRS to address coverage and taxation questions
related to the Agreement and any modifications; and
Serve as an intermediary for federal, State and local agencies, and
educate public employers on coverage and benefit issues.
May request SSA send a letter to the State Governor advocating for the
State Social Security Administrator position on a case-by-case basis to
reinforce the ongoing services of the State Administrators. The State
Administrator should direct the request to SSA regional office servicing
the state. The regional office retains the discretion to determine if
sending a letter is appropriate following a request from the State
Administrator. See POMS SL 10001.140A.
2. Notify SSA about any state administrator changes
SSA regulations require each State to inform SSA of the name, title, and
address of the designated official(s) and the extent of each
official’s authority. When there are changes in designated officials
or changes in their authority, the State should inform SSA timely. States
should send a notice to the following SSA offices:
Office of Earnings, Enumeration and Medicare Policy
Attn: Coverage and Earnings Team
2400 Robert M. Ball Building
6401 Security Boulevard
Baltimore, MD 21235-6401
3. Communicate with SSA, IRS, employers, and stakeholders
Communication is essential to performing the roles and responsibilities of
the state administrator. However, to be effective, communication must flow
clearly and consistently with all involved parties. This requires that
communication and interaction between the state administrator and every
entity—from SSA, to the IRS, to every reporting official for the
State and its political subdivisions. State administrators should develop
and maintain communication plan. That plan may include contact with the
Social Security Administrators through the NCSSSA as needed and
annually at the NCSSSA conference;
regional offices as needed and at least quarterly;
Federal, State and Local Governments as needed and at least quarterly;
State’s political subdivisions (including those that do not have
Section 218 coverage agreements) at least annually to secure current
contact and mailing information including: current legal status, possible
subdivision name changes, address changes, telephone and fax numbers,
email address, and EIN(s);
State government legislators and policy makers;
Public retirement systems; and
Oversight agencies, public employer associations, and other professional
governmental associations as needed.
4. Maintain Section 218 related records
It is the responsibility of the state administrator to maintain Section
218 records permanently and securely. Destruction of original records is
not authorized. In order to meet the records retention requirements, the
state administrator shall:
Maintain the State's original hardcopy file of all Section 218 related
coverage information, including the State’s Section 218 Agreement,
modifications, dissolutions, intrastate agreements, and all associated
correspondence in a secure environment that should be both waterproof and
Consider implementing a redundant system to backup hardcopy files
(example, an electronic database of scanned files);
Routinely back up electronic files, and the backup files should be stored
in a separate and secure location away from the originals; and
Routinely evaluate electronic and hardcopy files to insure the integrity
of the documents.
5. Perform education and outreach
The state administrator is responsible for providing regular education and
outreach to State and political subdivision employers and employees. A
successful education and outreach program may include:
Identify State and political subdivision employers, and create employer
profiles that can be easily accessed as a source of information;
Organize, conduct or participate in joint educational outreach with SSA
and IRS for the State’s governmental employers and employees;
Identify political subdivisions not covered by a Section 218 Agreement
that provides retirement system coverage to their employees to ensure the
subdivision understands their obligations and responsibility under
mandatory Social Security or mandatory Medicare laws and provisions;
Send periodic letters to State and political subdivision entities asking
if their Social Security coverage and retirement system status has
Provide information (via newsletters, articles and presentations) to the
State’s political subdivisions concerning requirements of Section
Develop email or website material for online client information exchange;
Network with governmental and professional associations, participate in
conference committees, and offer to coordinate conference presentations;
Compile a State-specific coverage and reporting manual for use by the
State’s public employers;
Develop ongoing contact and act as a liaison with the State’s
congressional delegation, legislative, and executive branch officials and
Monitor for State and local proposed legislation that could potentially
affect the Social Security, Medicare, and retirement system coverage of
6. Determine necessary funding
The state administrator is responsible for determining the level of
support needed by its State and covered political subdivisions, pursuant
to existing State statutes, and ascertaining the administrative costs for
operating the Section 218 coverage program. The state administrator should
make recommendations to the appropriate State authorities to ensure
adequate funds are made available to properly administer the state
administrator’s program in that State.
7. Determine necessary staffing
The state administrator is responsible for evaluating and maintaining
staffing levels commensurate with Section 218 program objectives and
activities. The state administrator position, as well as the duties
and responsibilities associated with the position, are a mandatory
responsibility of the State—as specified in SSA Regulations at 20
CFR § 404.1024. In order to determine the adequate staffing level for
the state administrator position, the State should perform an analysis of
the coverage needs of the State and its political subdivisions. Consider
Identify goals and objectives that align with the roles and
responsibilities of the state administrator position;
Identify the State’s political subdivisions (including those that do
not have Section 218 coverage) and begin developing specifications for the
type, numbers and locations of employees;
Assess the current and the projected coverage needs of the State and
political subdivision employees;
Identify the possible methods for meeting the coverage needs of State and
political subdivision employees;
Determine the staffing requirements necessary to implement the ideas
Develop a method or mechanism for rating the effectiveness of staff and
then monitor the effectiveness of current staffing levels; and
Staff the position to meet the Social Security coverage needs of State and
political subdivision employees.
In addition to maintaining effective staffing levels, the state
administrator should implement a comprehensive succession plan. Succession
planning is the mitigating process of preparing for the loss of critical
personnel in an organization. When developing a succession plan,
begin with an assessment. The assessment should identify positions in
which a vacancy would have the highest impact on administering Section 218
coverage for the State and its political subdivisions.
8. Understand legal framework
It is important that state administrators apply Federal or State law when
making a determination on coverage issues. As a rule, Federal law governs
determinations involving coverage of State and local government employees,
while state administrators determine issues involving the interpretation
of functions of the State and its political subdivisions according to
The following chart sets out issues that require determinations based on
Federal and State law.
Does an employer or employee relationship exist?
What is the identity of the employer?
Are earnings reported as Social Security wages?
What are emergency services?
What are student services?
Who is an officer of a State or political subdivision?
Is an entity a political subdivision?
What is the legal status of a new entity?
Is a function governmental or proprietary?
Is a position under a retirement system?
Which employees are eligible for membership in a retirement system?
Who is an employee for purposes of retirement system participation?
What is the definition of a police officer or firefighter position?
If it is unclear whether an issue requires a Federal or State
determination, consider contacting the appropriate Social Security
regional office. If additional guidance is needed, consider obtaining a
legal opinion or other guidance from the State’s Office of the
9. Program strategies
The state administrator should develop a comprehensive program strategy
for addressing the State’s Section 218 program goals. This strategy
Standardize and simplify Section 218 services;
Develop performance standards based on State and local government needs;
Apply technology to aggressively automate routine tasks, data maintenance,
and client interface;
Create a task group to identify the Social Security needs of State and
local government employees;
Develop an outreach strategy for participating in public events, and
provide training and dissemination of Social Security coverage materials
for State and local employers and employees; and
Facilitate support for your Section 218 program from State legislators and
C. Resources for administering Section 218 policies
The primary resource for administering Section 218 policies is the
and Local Coverage Handbook (SLCH). The SLCH is located in the SL part
of the Program Operations Manual System (POMS). In addition to the SLCH,
the State administrator should routinely use the following resources.
1. Agency and organization web sites
SSA, State and
Local Government Employers (SLGE)
This SSA site is specifically for Social Security coverage issues related
to State and local government employers and employees. This site contains
information about how public employees are covered for Social Security and
Medicare, frequently asked questions, laws and regulations, publications,
who to contact in your State, and related web links that can help you
understand the Social Security and Medicare coverage and reporting
requirements for public employees.
National Conference of State
Social Security Administrators
Since its formation in 1952, the NCSSSA has worked closely with SSA and
IRS to address Social Security and Medicare coverage and employment tax
issues raised by State and local government employers and State Social
Security Administrators throughout the United States. The NCSSSA works
with federal officials to ensure legislative and regulatory changes
address State and local concerns, and the NCSSSA provides leadership to
State and local governments.
Federal, State and Local Governments (FSLG)
This IRS site is for Federal, State and Local Governments (FSLG), as a
source of information for ensuring compliance with federal employment tax
laws by governmental entities.
2. Legal citations
State and Local Coverage Handbook (SLCH)
A policy and reference manual developed by SSA for state administrators to
use in administering the Social Security and Medicare provisions under
Sections 210 and 218 of the Act.
Publication 963: Federal-State Reference Guide (Pub. 963)
The IRS Federal-State Reference Guide provides State and local government
employers a comprehensive reference source for guidance on Social Security
and Medicare coverage and FICA tax withholding issues.
A guide developed by the National Conference of State Social Security
Administrators for new state administrators.
4. Fact sheets
SL 10001.140 SSA Program Administration
Several SSA components are responsible for the Section 218 State and local
coverage provisions. The following describe those components and their
A. Regional Office (RO)
The RO provides leadership and technical direction in administering the
State and local coverage program within the region, consistent with
established policy. Within the RO, the Assistant Regional Commissioner
(ARC) has responsibility for State and local coverage activities within
the region. The RO:
Conducts day-to-day negotiations with the State;
Assists the State in drafting Section 218 Agreements and modifications;
Interprets, reviews, processes and executes Section 218 Agreements and
Reviews supporting documentation from States to remove legally dissolved
entities from coverage under Section 218 Agreements;
Makes coverage and wage determinations consistent with established policy;
Provides guidance and advice to States on proposed legislation that may
have impact on the State's Section 218 Agreement;
Interprets and advises States on established SSA policies and procedures;
Refers to Central Office issues for which no policy has been established
or present policy may require a change;
Maintains file of original agreements and modifications;
Responds to inquiries concerning magnetic media reporting, electronic
filing, and paper reporting of wages; and
Advises State Social Security Administrators and the Internal Revenue
Service regarding Social Security and Medicare issues.
May send a letter, at its discretion, to a State Governor advocating for
the State Social Security Administrator position and reinforcing the
resources available to the State Administrators upon Regional
Commissioner’s approval. In determining whether to send the letter,
the RO should consider factors such as:
The State Administrator has requested the letter.
The RO has not heard from a State in several years.
The RO has reason to believe there could be potential coverage issues in
The RO may use the following sample template language for the letter and
may insert information tailored to the State.
If the RO chooses to modify the template language, email a copy of the
letter with the added language to ^OGC OPL Controls for review and
authorization prior to release. The RO should retain a copy of all letters
sent to governors.
B. Regional Chief Counsel
The Regional Chief Counsel’s office reviews Section 218 Agreements,
modifications and legal dissolutions for legal form and substance and
provides legal opinions, advice and legal clearance. This office also
provides legal interpretations on Federal and State laws and advises SSA
when to obtain an Attorney General opinion.
C. SSA Central Office
1. Office of Income Security Programs (OISP)
OISP is responsible for administering the State and local coverage program
under the Act. OISP is overseen by the Deputy Commissioner for Disability
and Income Security Programs. OISP plans, develops, evaluates, and issues
operational policies and procedures concerning coverage and wage questions
related to Sections 210 and 218 of the Social Security Act. As lead
component for the State and local coverage program, OISP: