BASIC (12-03)

Beginning July 2, 1991, Social Security and Medicare coverage is mandatory for State and local government employees who are not members of a public retirement system and who are not covered under a Section 218 Agreement, unless specifically excluded by law. The mandatory Social Security provisions also apply to those State and political subdivision employees who have the option to become members of the retirement system but have chosen not to do so (optionals) as well as those employees who are personally ineligible for membership in the retirement system (ineligibles).

Mandatory Social Security coverage ceases when a State or local government employee becomes a member of a public retirement system.

• If an employee was hired after April 1, 1986, and is not a member of public retirement system, the employee is covered for Social Security and Medicare. If the employee subsequently becomes a member of a retirement system, the employee ceases to be covered for Social Security (but not Medicare because the employee was hired after April 1, 1986). Employees hired or rehired after March 31, 1986, remain covered for Medicare regardless of their membership in a retirement system.

• If an employee was hired prior to April 1, 1986, and was not a member of public retirement system, the employee is covered for Social Security and Medicare. If the employee subsequently becomes a member of a retirement system, the employee ceases to be covered for Social Security and Medicare.

NOTE: If mandatory Social Security coverage applies, an employer can provide an alternative plan to Social Security if it meets the minimum benefit requirements in the IRC Section 3121(b)(7)(F).