All employers that wish to take part in the Wisconsin Retirement System must join and be covered by a Section 218 Agreement. A section 218 agreement is a voluntary agreement between the State and the Social Security Administration (SSA) to provide Social Security coverage for State and local government employees.

Social Security Coverage

Social Security coverage is available to state and local government employees (including employees of counties, cities, villages, towns, schools and other governmental districts) through Section 218 of the Social Security Act.

The Social Security Act and a State’s Section 218 Agreement aim to:
  1. support the material needs of individuals and families;
  2. protect aged and disabled persons against the expenses of illnesses that may otherwise use up their savings;
  3. keep families together; and
  4. give children the chance to grow up healthy and secure.

Joining Wisconsin’s 218 Agreement

For an employer to come under Wisconsin’s 218 Agreement, the employer must be a governmental entity. Governmental entities are states, political subdivisions and instrumentalities of government.

The following factors may help you determine if the entity is a valid governmental entity:

  1. Is the entity used for or does it supply a governmental purpose?
  2. Is the performance of its function on behalf of the state or a political subdivision (e.g., joint sanitary district)?
  3. Is the control and supervision of the organization vested in a public authority?
  4. Does statutory or other authority exist for the creation of the entity?
  5. What is the degree of financial autonomy and the source of its operating expenses?

The state (with the approval of the SSA) determines the legal status of an entity of the state. If an entity or entity type is not defined in statute or legislation, then it’s the state’s responsibility to specify who or what its political subdivisions are.


A modification amends a Section 218 Agreement to do the following:

  • extend Social Security and Medicare coverage to new groups of employees
  • name new political subdivisions joining a public retirement system
  • correct errors in earlier modifications
  • implement changes in federal or state law
  • under limited circumstances, exclude services or positions previously covered

Modification Process

There are a few basic steps to the modification process.  Each of these steps has several subparts; for more details please contact ETF at

Step 1: The Department of Employee Trust Funds, working with the municipality or other public entity, selects the proper modification and discusses the consequences of coming under the state’s 218 Agreement with the entity.

Step 2: ETF completes the modification packet of information and sends it to the SSA.

  • The local entity will often be involved at this stage.  The local entity will help the state in compiling enough evidence of the entity’s governmental status to send to the SSA.

Step 3: The Social Security Regional Office (RO) reviews the modification and approves (or denies) coverage.

  • For Wisconsin, the Regional Office is in Chicago, Illinois

SSA decisions as they relate to modifications are final and not appealable.

Employee Coverage

Under the Social Security Act, certain employee services must be excluded from Social Security coverage under a Section 218 agreement. If requested by the state (or local entity), certain services and positions may be excluded from Social Security coverage under the State’s Section 218 agreement.

Required exclusions include:
  • Services performed by individuals hired to be relieved from unemployment.
  • Services performed by an employee, that they wouldn’t otherwise be required to perform, on a temporary basis in case of fire, storm, snow, earthquake, flood or another similar emergency.
  • Services performed in a hospital, home or other institution by a patient or inmate thereof as an employee of a state or local government employer.

Please note: Wisconsin state law requires WRS employers to cover their WRS-eligible employees for Social Security, apart from certain firefighters. State law also requires that all state employees and teachers be covered under the Section 218 Agreement.

An employer must give any employee taking a job that is not covered the Social Security Statement SSA-1945. The statement explains how not being subject to Social Security may affect future benefits and must be signed by the employee. For WRS purposes, this form applies to most firefighters.

Omnibus Budget Reconciliation Act (OBRA).

OBRA (1990) requires Social Security coverage for employees meeting each of the following three conditions:

The employee is:
  • not covered under a Section 218 Agreement,
  • not covered by an Internal Revenue Code Federal Insurance Contributions Act (FICA) replacement plan, and
  • not excluded under the Section 218 Agreement or the Social Security Act.

According to the SSA, these mandatory Social Security provisions were intended to ensure that all public employees had some type of retirement protection, either from Social Security or through a plan offered by the employer.

Social Security Benefit Reductions

Social Security benefits may be reduced in one of two ways:

  1. Government Pension Offset:  may apply to the spousal or survivor benefit of an individual who receives a pension for work not covered by Social Security. For more information see the Government Pension Offset fact sheet.
  2. Windfall Elimination Provision:  may apply to an individual whose employer does not withhold Social Security taxes from his or her salary. For more information see the Windfall Elimination Provision fact sheet.

Please note:  ETF does not have access to specific individual information, such as information about an employee’s total work history, Social Security work credits or any potential spousal or survivor benefits. For more information, please contact the Social Security Administration at 1-800-772-1213, via email or visit their website at


Employees covered under a Section 218 Agreement are automatically covered for Medicare. Employees excluded from mandatory Medicare coverage include those who have been in continuous employment with their employer since March 31, 1986.