TN 24 (11-09)

Citations: Soc. Sec. Act, Sec. 218 (c) (7)

Once coverage is provided for state and local government employees, it generally continues unless an event occurs which results in a cessation of coverage. Consider the following rules:

1. Absolute coverage group

If services performed in a position are covered as part of an absolute coverage group, coverage continues if the position subsequently comes under a retirement system. This includes police and firefighter positions which, after coverage is obtained with an absolute coverage group, come under a retirement system.

2. Majority vote retirement system

Services in all positions under a retirement system, including positions brought under the system in the future, are compulsorily covered under the state's agreement (except for excluded positions and services), if the system is the entire system (i.e., one referendum was conducted to cover the entire system), rather than deemed separate retirement systems for coverage purposes. Coverage will continue even though the positions are later removed from under the retirement system, the system is abolished, or the positions are placed under an additional retirement system.

3. Divided vote retirement system

The continuation of coverage rules for the majority-vote retirement system applies, except only new members of the system are automatically covered. In addition, a position which is occupied by a member who chooses coverage ceases to be covered if it becomes occupied by a member of the group who voted “No” to coverage. Thus, where a member of the retirement system in the "No" group transfers to a position formerly occupied by a member who voted “Yes” to coverage, the member carries his "No" vote with him. Similarly, if a member of the "Yes" group transfers to a position formerly occupied by a member of the "No" group, his coverage continues.

If the retirement system is later abolished or positions are removed from coverage under it, the "Yes" group continues to be covered but new employees occupying positions which were formerly under the system would not be covered because they would not be new members of the system.

4. Applying the continuing employment exception and continuation of coverage provisions – Medicare only divided referendum scenarios

The proper application of the continuing employment exception and the continuation of coverage rules can cause some confusion when dealing with the Medicare (HI-only) divided referendum vote of a state employee who transfers between agencies and entities within the state government system. The same holds true for the divided Medicare (HI-only) referendum vote of a political subdivision employee who transfers between agencies and entities of the same political subdivision.

See Details

• SL 30001.380, Continuation of Coverage Rules