Section 218
Office of the State Social Security Administrator
Background
When the Social Security Act was enacted in 1935, it did not cover states and their political subdivisions. To change this, Congress created Section 218 of the Social Security Act in 1951 to allow states to enter into voluntary agreements with the Social Security Administration for Social Security coverage for state employees. The original State of Texas Section 218 Agreement was signed on November 30, 1951. When Medicare was created in 1966, Medicare coverage also became available under the Agreement.
Since then, thousands of local political subdivisions (cities, counties, housing authorities, hospital districts, school districts, utility districts etc.) have signed agreements with the Office of the State Social Security Administrator to modify the State of Texas Section 218 Agreement for inclusion, thereby extending Social Security and Medicare coverage to the subdivision’s eligible employees.
The Office of the State Social Security Administrator has been based at ERS, a Texas state agency, since 1975. The designated State Social Security Administrator (“State Administrator”) is a position appointed by the Governor.
Modifying the state’s agreement to include a new group of employees from a local political subdivision involves the subdivision conducting a referendum election among the affected employees, which is overseen by the State Administrator. The cost of staffing and administering this program is partially offset by a $35 annual fee, authorized by the Legislature and paid by subdivisions to ERS. As of June 1, 2024, there were 1,620 modifications to the state’s Section 218 agreement covering approximately 2,600 political subdivisions across the state.
Legal Citations for Section 218 Agreements
- (Federal) Social Security Act § 218 (42 USC 418)
- (Federal) 20 CFR 404.1200 - 404.1219
- (State) Government Code, Chapter 606: Social Security
Other Useful Links
Social Security Administration Resources
- Social Security Administrator Advisory 2016-01 - Statewide Election Worker SS and MC Tax Exclusion (pdf)
- Employer Reporting Instructions & Information
- Election Officials and Election Workers Coverage
- Employment Coverage Thresholds
- Overview of Section 218 Agreements
- State and Local Government Employers - Information
- If you hire new employees not covered by Social Security
Internal Revenue Service
- IRS Federal, State, and Local Governments
- IRS Form W-9
- IRS Videos:
- Payroll Reporting for Election Workers Learn about reporting and withholding requirements that apply to paid election workers.
- Why File Form 1099-MISC Learn about the basic filing requirements for reporting payments on Form 1099-MISC.
- Taxpayer Identification Number (TIN) Matching Program Use TIN Matching to validate whether the TIN and name combinations provided on Forms W-9 match IRS tax filing records prior to submitting related information returns.
- 10 Minutes on Reconciling Forms 941/W-3/W-2 to Gross Payroll Employers who reconcile payroll can avoid discrepancies by ensuring that employees’ wages and taxes reported to the IRS and the Social Security Administration match.
NOTE: ERS makes reasonable efforts to ensure links to other sites are correct and working. However, we’re not always aware when those sites are experiencing issues and are not responsible for the ability access to information on those sites. You can find IRS videos on their YouTube channel.