Glossary of Section 218 Terms

Social Security and Medicare Coverage for Public Employees

Absolute Coverage Group/Non Retirement System Coverage Group – A permanent grouping of employees. For example, all the employees of a city or town. It is a coverage group 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.

Application/Agreement – The contract between the State of Washington and the political subdivision to provide Social Security coverage for state and political subdivision employees under Section 218 of the Social Security Act.

Coverage Groups – Groupings by which employees must be covered under an agreement (absolute coverage group or retirement system coverage group).

Divided-vote Referendum for Medicare-only – Employees hired before 4/1/1986 and continuously employed by the same employer may vote to participate in Medicare. The employees who vote in favor will be covered. The employees who vote against will not be covered.

Employee – For purposes of a federal-state agreement, “employee” is defined in Sections 210(j) and 218(b)(3) of the Social Security Act. It includes elected officials of a state or political subdivision and volunteer fire fighters.

Form 1945 – A statement concerning jobs covered by a retirement system, but not covered by Social Security. State and local government employers are required to provide this form to employees hired on or after January 1, 2005 to advise that the position the employee works in is not covered by Social Security.

Majority-vote Referendum – An election process in which members of a retirement system group vote for or against participating in Social Security. If a majority of the eligible members of the retirement system vote in favor of coverage, the state may then submit a modification to its agreement under Section 218 to extend coverage to that group.

Modification – An amendment to the written agreement between the state and the Social Security Administration to make the original agreement applicable to the services of employees not previously covered by Social Security, or to modify the original agreement in some other respect.

OASI – Old Age and Survivors Insurance. Also known as Social Security and Medicare.

Optional Exclusion – Those services that the federal law gives the state the option to include or exclude from coverage under the agreement. The political subdivision may request exclusion of the following services:

  • All classes of elective positions
  • All classes of part-time positions
  • Positions compensated solely by fees received directly from the public
  • Agricultural labor, to the extent permitted by federal law
  • By a student as permitted by federal law

Qualifying Public Retirement System – A pension annuity, retirement or similar fund or system established by a state or political subdivision that can be considered a replacement for Social Security. Section 31.3121(b)(7)-2 of the Employment Tax Regulations and IRS Revenue Procedure 91-40 explain the requirements for a public retirement system to qualify as a Social Security replacement.

Retirement System – A pension annuity, retirement or similar fund or system established by a state or political subdivision.

Retirement System Coverage Group – A grouping of employees in positions under a retirement system for Section 218 coverage purposes.

Section 218 Agreement – The written agreement between the state and the Social Security Administration to provide Social Security coverage for state and political subdivision employees under Section 218 of the Social Security Act.

For more information about Social Security and Medicare coverage for public employees, contact the State Social Security Administrator at DRS:

Email: OASI@drs.wa.gov
Phone: DRS OASI Program line at (360) 664-7316