Questions about an Invoice

A Section 218 Agreement is a voluntary agreement between the state and the Social Security Administration (SSA) to provide Social Security and Medicare Hospital Insurance (HI) or Medicare HI-only coverage for employees of the state and participating local governmental entities. These agreements are called "Section 218" Agreements because they are authorized by Section 218 of the Social Security Act.

Agreements between the State of Texas and local political subdivisions to add new positions to Social Security and Medicare coverages are actually modifications to the state’s single Section 218 Agreement with the federal government. Even though modifications are often referred to as 218’s, or 218 Agreements, each state has only one original Section 218 Agreement. The State of Texas Section 218 Agreement was signed back in 1951, and involved coverage for 20 counties and nine cities. Any entity subsequently covered after the effective date of the original agreement is covered by a uniquely numbered modification to that Agreement.

No. The employing local political divisions must have a Section 218 Agreement that covers the employee’s services for the services must otherwise be covered under mandatory coverage rules.

No. Beginning April 20, 1983, Section 218 Agreements are permanent and cannot be terminated.  If a local political subdivision covered by a modification is dissolved, merged, or no longer has employees, its agreement under a modification with the State of Texas can be transitioned to inactive status, which suspends the annual $35 administrative fee billing cycle for the State of Texas. Please contact the State Social Security Administrator James E. Sawyer, MPA, CEBS at TXSSP@ers.texas.gov or 512-867-7373.

The Texas Legislature authorized ERS to assess a fee to pay the state’s administrative expenses for the program in 1993 (Government Code Section 606.028). The fee has been $35 since 2004, and is mandatory for all active local political subdivisions with modifications to the State of Texas Section 218 agreement.

Each annual administrative fee, if left unpaid, accrues a 20% late fee for every year that it remains unpaid.

For example, non-payment of the administrative fee for two years in a row would result in late fees accruing for both years:

Please request copies of modifications from the State Social Security Administrator James E. Sawyer, MPA, CEBS at TXSSP@ers.texas.gov or 512-867-7373.