TN 26 (11-16)

Citations: Soc. Sec. Act, Sec. 218 (a)

A. Policy for preparing, routing and executing agreements and modifications

The state is responsible for preparing a Section 218 Agreement or modification to include additional coverage groups, correcting errors in other modifications, identifying additional political subdivisions that join a covered retirement system, and obtaining Medicare coverage for public employees whose employment relationship with a public employer has been continuous since March 31, 1986. These processes may include conducting referenda for Social Security and Medicare coverage for services performed by employees in positions under a public retirement system. These processes should be in accordance with the appropriate sections of the state and Local Coverage Handbook (SL section in POMS).

B. Procedure for preparing, routing and executing agreements and modifications

1. The Parallel Social Security Office (PSSO)

Reviews the modification and determines whether:

• the state official has signature authority,

• the modification number is in sequential order,

• the entity is not already covered under Section 218, and

• the supporting documentation is appropriate.

After review:

• sends the modification and documentation to the RO for technical review, legal clearance, and execution on behalf of the Commissioner of Social Security, and

• maintains a photocopy for the pending file.

2. The Regional Office (RO)

Reviews the modification and approves or denies coverage.

Step 1: The RO reviews the modification and verifies that the modification number has not been used before.

Step 2: The RO reviews their collection of modifications, the summaries of agreements and the state’s agreement, and verifies that the coverage group represented in the modification does not conflict with existing coverage.

Step 3: The RO reviews the modification packet for completeness, clarity, and accuracy.

Consider the following:

• Are there at least two copies, both with original signatures by the authorized state official?

• Is the envelope in which the modification was mailed to the PSSO, from the state, included? If the postmarked envelope is not included, contact the PSSO to obtain a statement verifying the receipt date.

• If the modification is for a retirement system coverage group, does it include the certification of referendum (signed by the Governor or authorized official)?

• Does the modification follow the models /exhibits in the handbook? (see, Agreement and Modification Exhibits SL 40001.490)

• Is the modification number correct, having never been used before?

• Is the entity clearly named?

• Is the named entity a legal entity (This determination is becoming increasingly more important to the review process, especially as government agencies privatize, and as new entities form, that possess both government and private business characteristics, i.e., charter schools)?

• Is the date, in reference to the state’s original agreement, correct?

• Is the EIN documented?

• Are the number of employees to be covered documented?

• If the modification excludes services, are they in accordance with the optional exclusions, as specified in the Handbook? (see, Optional Exclusions SL 30001.357)

• Does the date controlling who is covered, also referred to as the Section 218(e)(2) date, conform to Federal law. This date cannot be earlier than the date of the postmark on the envelope from the state to the PSSO or the receipt date in the PSSO. Does the effective date conform to Federal and state law? Normally, coverage cannot begin earlier than the last day of the sixth calendar year preceding the year in which the modification is received by SSA.

• Is the modification signed by the designated state official?

• If minor changes are needed, obtain a letter from the state administrator authorizing the changes. On all copies of the modification, make the correction as, “Per the State’s letter on (date)…” and initial.

• If major changes are needed, ask the state to submit a new modification.

Step 4: The RO photocopies all modification material, including the envelope.

Step 5: The RO requests an Office of the General Council (OGC) legal review of the modification, and follows-up with OGC in 30 days if a response has not been received.

Step 6: Upon OGC approval, the RO prepares a notification of approval letter and hand delivers the entire modification packet to the Regional Commissioner, or designated official. The RO will verify with the Regional Commissioner whether modification approval has been delegated to designated official. The Regional Commissioner or authorized delegate must sign the approval letter and all original copies of the modification. Important: SSA decisions are FINAL. A modification must meet the requirements of Federal and state laws. If it does not, the state must either withdraw the modification or the Commissioner will disapprove the modification and all copies will be returned to the state with an explanation for the disapproval.

Step 7: After final approval by the Regional Commissioner or authorized delegate:

• date the approval letters and make copies;

• file an ORIGINAL signed modification packet in a locked fire-proof file cabinet, and

• send complete packets to:

  1. The state administrator (the state receives the other signed ORIGINAL)

  2. PSSO (receives photocopied packet)

  3. Internal Revenue Service: IRS: Fax a copy of the modification packet to the Internal Revenue Service at 855-243-4014.