​Section 218 Social Security Coverage

Idaho's Official State Social Security Administrator

The State of Idaho Controller's Office is the official State Social Security Administrator (SSSA) for the State of Idaho's Section 218 Agreement.  We act as liaison between the Social Security Administration and the Internal Revenue Service to address Section 218 coverage-related issues and questions.

The Social Security Administration's regulation 20 CFR 404.1204 requires that each state designate at least one official to act on behalf of the state in administering the Section 218 Agreement. This official, the State Social Security Administrator, is responsible for maintaining and administering the provisions of the Original Agreement and Modifications for coverage.

Each state has a unique Agreement with Social Security Administration. Social Security coverage depends on the history and, therefore, caution is advised when comparing coverage with another state and local government employer.


 

 

Referendums and Social Security for Public Employees

When the Federal Social Security Act began in 1935, public employees were not eligible for Social Security benefits.

In 1951, Section 218 of the Act authorized states to voluntarily elect Social Security coverage for public employees. These Federal-State Agreements, often referred to as Section 218 Agreements, were entered into with the Social Security Administration. The governor of each state assigns an agency to administer its Section 218 Agreement.

Today, most public employees who are members of a qualifying retirement system cannot participate in Social Security through their public employment unless their retirement system group is covered by a Section 218 Agreement.  This is known as Voluntary coverage (pursuant to Section 218 of the Social Security Act).

If your agency is interesting in participating in Social Security, please contact us for more information on coverage and the referendum process.

Social Security Offsets and Public Employees

Is your agency not coordinated with Social Security and therefore not withholding FICA taxes? There are steps that must be taken to ensure your employees are informed.
In 2004 new legislation required state and local government employers to provide Social Security's form SSA-1945 (PDF) to new employees hired on or after January 1, 2005 in jobs not covered under Social Security.

For this form, we recommend Employers ensure the following steps are taken:
• Provide the form to the employee prior to start of employment
• Obtain the employee's signature on the form
• Maintain original forms in employee files
• Submit a copy of the signed form to the agency's pension agency
For more information, visit the Social Security Administration State and Local Government Employers page.

  
 
 

There are two provisions in the Social Security law for workers who also receive a pension based on their work in a job not covered by Social Security.

Windfall Elimination Provision (WEP)

WEP impacts the amount of an employee's Social Secuirty retirement or disability benefit. In 1983, Congress passed the WEP to prevent employees who received non-covered (no Social Security taxes paid) pensions from the "windfall" of receiving the higher Social Secuirty benefit calculation typically used for longtime, low-wage earners.

The WEP may reduce Social Security benefits for those who receive any portion of their pension not covered by Social Security, and who also qualify for benefits based on other Social Security-covered earnings.

  • Members of a retirement system should check their warrant or pay stub or review their earnings statement through their my Social Security Account to see if Social Security taxes have been withheld.
  • The WEP may not apply if there are 30 or more years of substantial earnings in employment where Social Security taxes were paid.

If between 20-30 years of substantial earnings were covered by Social Security, the WEP may still apply, but at a lesser impact.

For more information about WEP and a list of exceptions, review the Windfall Elimination Provision (PDF) and use the WEP Calculator. Encourage employees to obtain a copy of their earnings record and utilize these tools to see how their Social Security benefit may be affected.

Government Pension Offset (GPO)

GPO impacts Social Security benefits received as a spouse or an ex-spouse. The GPO applies when a government pension based on employment not covered by Social Security is received and there is eligibility for a spouse or surviving spouse's Social Security benefit.
The GPO provisions do not apply if employment has always been covered by Social Security.
For more information about GPO, review Government Pension Offset (PDF) and use the GPO Calculator, using the spouse's earnings record, to determine possible impact.

Mandatory Medicare

For employees hired prior to April 1, 1986, who are currently not paying into Medicare, a Section 218 Agreement to provide Medicare Hospital Insurance (HI) only coverage can be elected. If the employer wishes to initiate this type of Section 218 Agreement the employees once excluded from contributing, may begin to contribute.

Contact us for more information on how to initiate the process.

 Additional Resources and Information

Contact

If you have questions regarding the social security coverage for your agency or need a copy of the existing Modification extending coverage, please contact our office at IDSSA218@sco.idaho.gov

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