What Is a Section 218 Agreement


    If you`re a government employee, you may have heard of a Section 218 agreement. But what exactly is it, and what does it mean for you?

    Section 218 of the Social Security Act allows states and local governments to provide Social Security and Medicare coverage to their employees. However, in order to do so, they must enter into a Section 218 agreement with the Social Security Administration (SSA).

    Essentially, a Section 218 agreement is a contract between a state or local government and the SSA. It outlines the specific terms of coverage, including who is eligible, how much the employer and employee will contribute, and what benefits are provided. Once the agreement is in place, the state or local government can deduct Social Security and Medicare taxes from their employees` paychecks and remit those taxes to the SSA.

    The process of entering into a Section 218 agreement can be a bit complicated. The government entity must first complete an application and submit it to the SSA for review. If approved, the SSA will send a proposed agreement to the government entity for review and negotiation. Once both parties agree to the terms, the agreement is signed and becomes effective.

    So, why is a Section 218 agreement important? First and foremost, it ensures that government employees are covered by Social Security and Medicare, just like any other worker. It also ensures that the employer is contributing to these programs on behalf of their employees. Additionally, if a government employee is also eligible for benefits from a retirement plan offered by their employer, the Section 218 agreement may affect how those benefits are calculated and paid out.

    Overall, a Section 218 agreement is an important tool for government entities to provide Social Security and Medicare coverage to their employees. If you`re a government employee and have questions about your coverage, be sure to talk to your employer or HR representative.