Social Security & Medicare

Interested in learning more about Section 218 coverage, or need assistance understanding the complex Federal Insurance Contribution Act (FICA) tax laws? We provide a variety of events and resources to assist you.

Employer Webinars

Learn more about the Social Security and Medicare program. Payroll officers and human resources professionals are encouraged to register.

Topics include:

• Social Security & Medicare program overview
• Federal Insurance Contributions Act (FICA) tax compliance
• How to contract for a Section 218 Agreement

Register for Social Security & Medicare Webinars online or email us at SSSA@calpers.ca.gov for assistance.

Note: Information is collected in accordance with our Privacy Notice.

CalPERS Benefits Education Events (Members)

Register to attend an upcoming CalPERS Benefits Educational Event (CBEE) in a city near you, to plan for your retirement. Gain a general understanding of the Social Security benefits available to you and your family.

Federal, State & Local Government (FSLG) Self-Assessment

The FSLG Compliance Self-Assessment (PDF) was created by the IRS, in coordination with SSA and the National Conference of State Social Security Administrators (NCSSSA), to allow employers to review major areas of federal tax law and identify areas where compliance issues may exist. This anonymous voluntary self-assessment can help determine the level of compliance with federal tax requirements as it relates to federal income, Social Security and Medicare taxes, and public retirement system obligations.

Note: The self-assessment tool is intended as a general guide for the most common tax issues that public employers may encounter, and to direct those entities to additional information as necessary. It isn't intended to provide legal advice and does not cover every question that may be encountered. The tool is provided for general information only and should not be relied upon as legal advice or a determination by the IRS with respect to a particular tax situation. The sources cited should be reviewed for complete information.

Section 218 Coverage

Public employers have the option to contract for Social Security and/or Medicare through a Section 218 Agreement. Contracting for Social Security and/or Medicare must be initiated by the employer. In California, contracting for coverage is done in conjunction with an already established public retirement system. Employers who don't have an established retirement system are required to withhold Social Security and Medicare based on mandatory Federal Insurance Contribution Act (FICA) requirements outlined by the IRS in the Federal-State Reference Guide – IRS Publication 963 (PDF).

How to Contract for Benefits

The Section 218 Agreement contract process is a six-step process that can take 18-24 months to complete.

Step 1

Resolution Information Packet

Step 2

Procedure Plan

Step 3

Election

Step 4

Application and Agreement Documents

Step 5

SSA Review

Step 6

SSA Decision

Note: Employees, labor groups, unions, and other representatives may not initiate contracts for Section 218 coverage. Section 218 Agreements must be initiated by the employer.

To learn more about the Section 218 program and contracting process, visit Section 218 Agreements, or email us to request an information session.

Form SSA-1945

The Social Security Protection Act of 2004 required state and local government employers to provide Social Security's form, SSA-1945 (PDF), to new employees hired on or after January 1, 2005, in jobs not covered under Social Security. 

What Was the Windfall Elimination Provision?

Prior to January 6, 2025, these members were subject to a federal law that could reduce their Social Security benefits, known as the Windfall Elimination Provision (WEP). The law limited benefits for anyone in a “non-covered” position unless they had 30 or more years of “substantial earnings” from a different job where Social Security taxes had been collected.

No matter your work history, Social Security has no impact on your CalPERS pension.

The WEP was repealed by the Social Security Fairness Act, signed into law by President Biden on January 6, 2025. The new law is retroactive to benefits paid in 2024, but it is currently unclear how long it will take the Social Security Administration to fully implement its provisions.

CalPERS manages neither the changes brought about by the new federal law nor the eventual additional payments. You can contact the Social Security Administration for more information.

What Was the Government Pension Offset?

The Social Security Fairness Act also rescinded a federal law known as the Government Pension Offset (GPO). This law applied to those who receive a government pension that is based on employment not covered by Social Security, and you are eligible for your spouse or your surviving spouse's Social Security benefits.

The GPO provisions did not impact members whose employment has always been covered by Social Security.

As with the repeal of the WEP, some members are likely to see additional benefits paid once the Social Security Administration determines how best to implement the change. CalPERS does not manage these changes. You can contact the Social Security Administration for more information.

Who to Contact

For more information, read the Social Security Administration’s update on the new law. You can also contact the agency directly or search for a local office.

If you believe your Social Security benefits are being reduced incorrectly and you are unable to resolve the issue at the Social Security field office, you may escalate your case through one of the following methods:

• Contact the San Francisco Social Security Administration Public Affairs team or all (800) 772-1213 or for TTY users, (800) 325-0778.
• Contact the California Official State Social Security Administrator (SSSA) office by email at SSSA@calpers.ca.gov or call (916) 795-0810. The SSSA serves as a liaison with the Social Security Administration to address coverage-related issues and questions.
• School members may also contact the California School Employees Association (CSEA) or call (800) 632-2128.

Medicare (Hospital Insurance) coverage was extended to all employees covered by a Section 218 Agreement on July 1, 1966. As of April 1, 1986, Medicare coverage became mandatory for state and local government employees hired (or rehired) after March 31, 1986. However, services performed after this date are exempt from mandatory Medicare coverage (known as the Continued Employment Exception) if the employee is a member of a public retirement system and meets all the following requirements:

• The public employer did not have a valid Section 218 Agreement prior to July 1, 1966.
• The employee was performing regular and substantial services for remuneration for the state or political subdivision employer before April 1, 1986.
• The employee was a bona fide employee of the employer on March 31, 1986.
• The employment relationship with the employer wasn't established for the purpose of avoiding the Medicare tax.
• The employment relationship with the employer has been continuous since March 31, 1986.

For employees hired prior to April 1, 1986, who are currently not paying into Medicare, a Section 218 Agreement to provide Medicare Hospital Insurance only coverage can be elected. If the employer wishes to initiate this type of Section 218 Agreement, the employees once excluded from contributing may begin to contribute.

Email us for more information on how to initiate this process.

For more information, refer to section 13205 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), section 3121(u) of the Internal Revenue Code (Application of Hospital Insurance Tax to Federal, State, and Local Employment), or the official government Medicare website.