on Social Security and Medicare coverage for State employees in Louisiana Advisory Committee, August 2009 Presentation Linda Yelverton, Social Security Program Director Angie Dowdy, Social Security Program Analyst Employed by: Louisiana Department of the Treasury/Division of Social Security John Kennedy, State Treasurer/State Social Security Administrator

State Social Security Administrator Each state designates, by statute, an official to act for the state in negotiations with the Social Security Administration (SSA). Revised Statutes: 42: State Administrator maintains the Section 218 Agreement that governs voluntary Social Security and Medicare coverage by state and local government employers. Conduct referenda for Social Security and/or Medicare coverage for services performed by employees in positions under a public retirement system.

Section 218 of Social Security Act Under Section 218 the State agreed to pay Social Security on employees not covered by a retirement system and employees who are ineligible for retirement systems. The majority of State employees DO NOT pay Social Security, exceptions are: part time, seasonal and temporary employees AND employees who have an option to join LASERS.

State employees contributing to Social Security  Employees in positions ineligible for membership in a state retirement system  Employees who are personally ineligible for membership in a state retirement system  Employees with optional membership in the retirement system

Mandatory Social Security 1990 Congress mandated Social Security withholding for services after July 1, 1991 All employees not participating in a public retirement system which meets certain minimum benefit requirements established by the IRS and not covered under Section 218.

Mandatory Medicare 1986 Congress mandated Medicare tax be withheld for employees hired, re-hired or elected after March 31, 1986.

Majority of State employees DO pay Medicare only, exceptions are … employees hired prior to April 1, 1986 who did not vote YES in the Medicare Only referendum. NOTE: State Medicare Only Referendum was effective October 1, State employees eligible to vote 10,634 with 1,852 YES Votes and 8,782 NO Votes

Medicare eligibility State employees are eligible for Medicare at age 65 with Part A, premium free if they qualify on their record or the record of a spouse, ex-spouse or deceased spouse. 99% of individuals across the nation do not pay a premium for Part A coverage. However,1% of individuals 65 or older do not meet the requirements for premium-free hospital insurance. Some state employees will be in this category and will have the option of purchasing (Part A) by paying a monthly premium.

2009 Monthly Premiums… (These figures apply to "timely" enrollments.) Individual IndividualIndividual has has at leasthas less than 40 credits credits30 credits Part A$ -0- $ $ Part B TOTALS$ 96.40$ $

WEP & GPO These two provisions of the Social Security law affect people with pensions from work not covered by Social Security.

Windfall Elimination Provision (WEP) Provides a reduced Social Security benefit for workers when any part of their government pension is based on work not covered by Social Security. Does NOT affect retirees first eligible for a government pension before 1986 or who have 30 years of substantial earnings under Social Security.

Government Pension Offset (GPO) If a state employee receives a government pension based on work not covered by Social Security, their Social Security spouse’s or widow(er)’s benefits will be reduced or offset by two-thirds of the amount of the non-covered government pension.

Who can get Social Security Disability? Worker must have paid into Social Security five of the last 10 years. Spouse at age 62, at any age if caring for a child under 16 or disabled. Divorced spouses may qualify.

Social Security Retirement Age Year of BirthFull Retirement Age 1937 or earlier and 2 months and 4 months and 6 months and 8 months and 10 months and 2 months and 4 months and 6 months and 8 months and 10 months 1960 and later67

…Resources Louisiana State Treasurer’s Office Linda Yelverton (225) Angie Dowdy (225) Social Security Administration (800) Internal Revenue Service/ Federal State & Local Government (FLG) IRS Publication