Mandatory Social Security and Medicare Coverage

Beginning July 2, 1991, Social Security and Medicare Hospital Insurance (HI) coverage is mandatory for State and local government employees unless they are members of a public retirement system or covered by a Section 218 Agreement.

Mandatory Social Security coverage ceases if an employee later becomes a member of a public retirement system. Mandatory Medicare coverage continues for employees hired after March 31, 1986.

If an employee becomes a member of a public retirement system that is covered for Social Security under a Section 218 Agreement, the employee is covered for Social Security and Medicare.

Although certain services are excluded from mandatory Social Security coverage by Federal law, some services may be covered under a Section 218 Agreement. This includes election workers and students working at the school where they are enrolled and regularly attending classes.

Specific questions about what constitutes a "retirement system" and whether an employee is a "member" of a retirement system under the mandatory Social Security coverage provisions, should be directed to the Internal Revenue Service.

References:

• Section 210(a)(7)(F) of the Social Security Act
• Social Security Regulations 20 CFR 404.1020(a)(3)
• Social Security Regulations 20 CFR 404.1200(b)
• Section 3121(b)(7)(F) of the Internal Revenue Code
• IRS Regulations 26 CFR 31.3121(b)(7)-2
• IRS Revenue Procedure 91-40