SL 10001.130: State Social Security Administrator Responsibilities
Effective Dates: 11/25/2016 - Present TN 2 (03-11)
- SL 10001.130 State Social Security Administrator Responsibilities
- SSA regulation 20 C.F.R. §404.1204 requires each State to designate at least one State official to act for the State in administering that State's Section 218 agreement. This official, the State Social Security Administrator, acts for the State with respect to its responsibilities for maintaining and administering the provisions of the agreement and the proper application of Social Security and Medicare. Therefore, it is important for state administrators to understand how the Social Security and Medicare coverage provisions interrelate.
- A. Introduction to State Social Security Administrators
- When the Social Security Act (the Act) was enacted in 1935, Social Security coverage was limited to private sector employees. States, their political subdivisions, and interstate instrumentalities, were not originally included in this legislation. However, with the Social Security Amendments of 1950, Congress created Section 218 of the Act (codified at 42 U.S.C. §418). Effective January 1, 1951, Social Security coverage became available to State and local government employees through a unique Federal-State agreement authorized by Section 218. These agreements, referred to as Section 218 Agreements, represent a mutual commitment to assure that participation in the Social Security program is a viable part of employee benefit programs available to public employees. Today, every State, Puerto Rico, the Virgin Islands, as well as numerous interstate instrumentalities, have a Section 218 Agreement with SSA. This is equivalent to providing Social Security and Medicare or Medicare-only coverage to approximately 22 million employees.
In order to effectively implement coverage at the State level, SSA, through regulation 20 C.F.R. §404.1204 , requires that each State designate a State Social Security Administrator to act on the State’s behalf with respect to its responsibilities for maintaining and administering the provisions of the Agreement. The role of a state administrator is challenging, but through a cooperative relationship with SSA, the Internal Revenue Service (IRS), and the National Conference of State Social Security Administrators (NCSSSA)—every state administrator, both experienced and inexperienced, is guaranteed access to a network of knowledge and resources.
- B. Responsibilities of State Social Security Administrators
- SSA regulations require that each State designate a state administrator, to act on the State’s behalf with respect to its responsibilities for maintaining and administering the provisions of the Section 218 Agreement.
- 1. Administer Section 218 coverage
- The state administrator is responsible for administering all aspects of Section 218 coverage, including interpreting its provisions, and insuring proper application of Social Security coverage to all State and political subdivision employees. The basic responsibilities of the state administrator are to:
- * Permanently maintain physical custody of the following original documents:
- * Section 218 Agreements,
- * modifications,
- * dissolutions,
- * intrastate agreements,
- * ballots from referenda and,
* prior letters and other forms of correspondence between the entities and the State, SSA, and IRS, which could affect future coverage;
- * Determine which State and political subdivision employees’ positions are covered by approved Section 218 Agreements and modifications;
- * Work with employers to guarantee proper Social Security and Medicare withholding and reporting;
- * Take appropriate steps with respect to the execution of modifications to the original agreement to include additional coverage groups, correct errors in coverage, or identify additional political subdivisions that join a covered retirement system;
- * Conduct referenda on the coverage of services of individuals in positions under a retirement system;
- * Identify new, inactive, merged or dissolved political subdivisions, and take the appropriate coverage related action;
- * Provide SSA with notice and evidence of the legal dissolution of covered State or political subdivision entities;
- * Provide guidance to government employers on issues related to Section 218 coverage;
- * Work with SSA and the IRS to address coverage and taxation questions related to the Agreement and any modifications; and
- * Serve as an intermediary for federal, State and local agencies, and educate public employers on coverage and benefit issues.
- 2. Notify SSA about any state administrator changes
- SSA regulations require each State to inform SSA of the name, title, and address of the designated official(s) and the extent of each official’s authority. When there are changes in designated officials or changes in their authority, the State should inform SSA timely. States should send a notice to the following SSA offices:
- * SSA regional office serving the state
* SSA parallel Social Security office (generally located in the State’s capitol city) * Office of Income Security Programs Office of Earnings, Enumeration and Medicare Policy 2-P-19, #213 2400 Robert M. Ball Building 6401 Security Boulevard Baltimore, MD 21235-6401
- 3. Communicate with SSA, IRS, employers, and stakeholders
Communication is essential to performing the roles and responsibilities of the state administrator. However, to be effective, communication must flow clearly and consistently with all involved parties. This requires that communication and interaction exist between the state administrator and every entity—from SSA, to the IRS, to every reporting official for the State and its political subdivisions. Consider the following points for developing and maintaining an effective communications plan. State administrators should contact:
- * Other State Social Security Administrators through the NCSSSA as needed and annually at the NCSSSA conference;
* SSA parallel Social Security offices as needed, but at least quarterly to foster open dialogue; * SSA regional and national offices as needed, but at least quarterly to foster open dialogue; * IRS Federal, State and Local Governments as needed, but at least quarterly to foster open dialogue; * State’s respective political subdivisions (including those that do not have Section 218 coverage agreements) at least once annually to secure current contact and mailing information including: current legal status, possible subdivision name changes, address changes, telephone and fax numbers, email address, and EIN(s);
- * State government legislators and policy makers;
- * Public retirement systems; and
- * Oversight agencies, public employer associations, and other professional governmental associations as needed.
- 4. Maintain Section 218 related records
- It is the responsibility of the state administrator to maintain Section 218 records permanently and securely. Destruction of original records is not authorized. In order to meet the records retention requirements, the state administrator shall:
- * Maintain the State's original hardcopy file of all Section 218 related coverage information, including the State’s Section 218 Agreement, modifications, dissolutions, intrastate agreements, and all associated correspondence in a secure environment that should be both waterproof and fireproof;
- * Consider implementing a redundant system to backup hardcopy files (example, an electronic database of scanned files);
- * Routinely back up electronic files, and the backup files should be stored in a separate and secure location away from the originals; and
- * Routinely evaluate electronic and hardcopy files to insure the integrity of the documents.
- 5. Perform education and outreach
The state administrator is responsible for providing regular education and outreach to State and political subdivision employers and employees. A successful education and outreach program implements all, or a combination of the following strategies:
- * Identify State and political subdivision employers, and create employer profiles that can be easily accessed as a source of information;
- * Organize, conduct or participate in joint educational outreach with SSA and IRS for the State’s governmental employers and employees;
- * Identify political subdivisions not covered by a Section 218 Agreement that provides retirement system coverage to their employees to ensure the subdivision understands their obligations and responsibility under mandatory Social Security or mandatory Medicare laws and provisions;
- * Send periodic letters to State and political subdivision entities asking if their Social Security coverage and retirement system status has changed;
- * Provide information (via newsletters, articles and presentations) to the State’s political subdivisions concerning requirements of Section 218;
* Develop email or website material for on-line client information exchange;
- * Network with governmental and professional associations, participate in conference committees, and offer to coordinate conference presentations;
- * Compile a State-specific coverage and reporting manual for use by the State’s public employers;
- * Develop ongoing contact and act as a liaison with the State’s congressional delegation, legislative, and executive branch officials and staff; and
- * Monitor for State and local proposed legislation that could potentially affect the Social Security, Medicare, and retirement system coverage of government employees.
- 6. Determine necessary funding
- The state administrator is responsible for determining the level of support needed by its State and covered political subdivisions, pursuant to existing State statutes, and ascertaining the administrative costs for operating the Section 218 coverage program. The state administrator should make recommendations to the appropriate State authorities to ensure adequate funds are made available to properly administer the state administrator’s program in that State.
- 7. Determine necessary staffing
The state administrator is responsible for evaluating and maintaining staffing levels commensurate with Section 218 program objectives and activities. Remember, the state administrator position, as well as the duties and responsibilities associated with the position, are a mandatory responsibility of the State—as specified in SSA Regulations at 20 CFR § 404.1024. In order to determine the adequate staffing level for the state administrator position, the State should perform an analysis of the coverage needs of the State and its political subdivisions. Consider the following:
- * Identify goals and objectives that align with the roles and responsibilities of the state administrator position;
- * Identify the State’s political subdivisions (including those that do not have Section 218 coverage) and begin developing specifications for the type, numbers and locations of employees;
- * Assess the current and the projected coverage needs of the State and political subdivision employees;
- * Identify the possible methods for meeting the coverage needs of State and political subdivision employees;
- * Determine the staffing requirements necessary to implement the ideas identified;
- * Develop a method or mechanism for rating the effectiveness of staff and then monitor the effectiveness of current staffing levels; and
* Staff the position to effectively and efficiently meet the Social Security coverage needs of State and political subdivision employees. In addition to effectively maintaining current staffing levels, the state administrator should implement a comprehensive succession plan. Succession planning is the mitigating process of preparing for the loss of critical personnel in an organization. When initiating development of a succession plan, begin with basics, and know the risks. We suggest performing an assessment and identifying and logging what positions have the highest potential risks for a vacancy—and the impact that it could have on administering Section 218 coverage for the State and its political subdivisions.
- 8. Understand legal framework
It is important that state administrators know how to apply Federal or State law when making a determination on coverage issues. As a rule, Federal law governs determinations involving coverage of State and local government employees, while state administrators determine issues involving the interpretation of functions of the State and its political subdivisions according to State law. The following chart identifies issues that require determinations on the basis of Federal and State law.
- Federal Law
- Does an employer or employee relationship exist?
- What is the identity of the employer?
- Are earnings reported as Social Security wages?
- What are emergency services?
- What are student services?
- State Law
- Who is an officer of a State or political subdivision?
- Is an entity a political subdivision?
- What is the legal status of a new entity?
- Is a function governmental or proprietary?
- Is a position under a retirement system?
- Which employees are eligible for membership in a retirement system?
- Who is an employee for purposes of retirement system participation?
- What is the definition of a police officer or firefighter position?
If it is unclear whether an issue requires a Federal or State determination, consider contacting the State’s PSSO, or the appropriate Social Security regional office. If additional guidance is needed, consider obtaining the necessary legal opinions and guidance from the State’s Office of the Attorney General.
- 9. Program strategies
The state administrator should develop a comprehensive program strategy for addressing the State’s Section 218 program goals. Consider the following points for implementing a strategy:
- * Standardize and simplify Section 218 services;
- * Develop performance standards based on State and local government needs;
- * Apply technology to aggressively automate routine tasks, data maintenance, and client interface;
- * Create a task group to identify the Social Security needs of State and local government employees;
- * Develop an outreach strategy for participating in public events, and provide training and dissemination of Social Security coverage materials for State and local employers and employees; and
- * Facilitate support for your Section 218 program from State legislators and executives.
- C. Resources for administering Section 218 policies
- The primary resource for administering Section 218 policies is the State and Local Coverage Handbook (SLCH). The SLCH is located in the SL part of the Program Operations Manual System (POMS). In addition to the SLCH, the State administrator should routinely use the following resources.
- 1. Agency and organization web sites
- SSA, State and Local Government Employers (SLGE)
This SSA site is specifically for Social Security coverage issues related to State and local government employers and employees. You can find information about how public employees are covered for Social Security and Medicare, frequently asked questions, laws and regulations, publications, who to contact in your State, and related web links that can help you understand the Social Security and Medicare coverage and reporting requirements for public employees.
- National Conference of State Social Security Administrators
- Since its formation in 1952, the NCSSSA has worked closely with SSA and IRS to address Social Security and Medicare coverage and employment tax issues raised by State and local government employers and State Social Security Administrators throughout the United States. The NCSSSA works with federal officials to ensure legislative and regulatory changes address State and local concerns, and the NCSSSA provides leadership to State and local governments.
- IRS, Federal, State and Local Governments (FSLG)
- This IRS site is for Federal, State and Local Governments (FSLG), as a source of information for ensuring compliance with federal employment tax laws by governmental entities.
- 2. Legal citations
- Section 218 of the Social Security Act
- The portion of the Act that explains that the Commissioner of Social Security shall, at the request of any State, enter into an agreement with such State for the purpose of extending the insurance system established by this title to services performed by individuals as employees of such State or any political subdivision thereof.
- Section 210 of the Social Security Act
- The portion of the Act that defines employment.
- Section 3101 of the Internal Revenue Code
- The portion of the IRC that relates to the way that employment taxes are imposed.
- Section 3121 of the Internal Revenue Code
- The portion of the IRC that relates to what types of remuneration constitute wages.
- 3. Publications
- SSA, State and Local Coverage Handbook (SLCH)
- A policy and reference manual developed by SSA for state administrators to use in administering the Social Security and Medicare provisions under Sections 210 and 218 of the Act.
- IRS, Publication 963: Federal-State Reference Guide (Pub. 963)
- The IRS Federal-State Reference Guide provides State and local government employers a comprehensive reference source for guidance on Social Security and Medicare coverage and FICA tax withholding issues.
- NCSSSA Handbook
- A guide developed by the National Conference of State Social Security Administrators for new state administrators.
- 4. Fact sheets
- SSA Publication No. 05-10007
- Government Pension Offset (GPO)
- SSA Publication No. 05-10045
- Windfall Elimination Provision (WEP)
- SSA Publication No. 05-10051
- How State and local government employees are covered by Social Security and Medicare
- 5. Miscellaneous
- SSA, News and Announcements
- An electronic bulletin board of Social Security related news, events, and announcements.
- IRS, Federal, State, and Local Government Newsletter
- A semiannual IRS publication about current developments and upcoming events of interest for government entities.
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