TN 7 (01-18)
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:
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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.
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Act – Social Security Act
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Coverage groups – employee groupings by which employees are covered under a Section 218 Agreement.
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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.
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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
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HI – Hospital Insurance (Medicare Part A)
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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
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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.
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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.
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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.
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NCSSSA – National Conference of State Social Security Administrators
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Nonproprietary functions – governmental function of a State or political subdivision, i.e., maintaining order
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OASDHI – Old-Age, Survivors, Disability and Hospital Insurance
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Optional exclusions – services the Act permits a State to include or exclude from coverage under a Section
218 Agreement
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Optionals - employees who are in positions that make them eligible to join the retirement system
but have not exercised their option to do so
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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.
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Proprietary function – a function of a governmental entity that is other than governmental in nature
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Required exclusions – services that are excluded from Social Security and Medicare coverage under Sections
218 and 210 of the Act
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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.
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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).
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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.
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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.
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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.