A rehired annuitant is a retiree who is hired by his or her former employer, or by another employer that participates in the same retirement system as the former employer. This includes a former participant in a state retirement system who has previously retired and who is either (1) currently receiving retirement benefits or (2) has reached normal retirement age. A rehired annuitant either draws a retirement benefit from that retirement system, or has reached retirement age under the retirement system. Rehired annuitants not in positions covered by a Section 218 Agreement are excluded from mandatory social security coverage under FICA. However, all retirees hired after March 31, 1986, are covered for Medicare. The regulations provide that a rehired annuitant is deemed to be a qualified participant in the retirement system, regardless of whether he or she continues to accrue a benefit or whether benefits continue during the employment period. Contributions are not required to be made to the state retirement system on the retired annuitant's behalf. Employees Covered by a Section 218 Agreement An individual in a position covered by a section 218 agreement providing for full coverage is subject to social security tax under the terms of the 218 agreement. The 218 agreement takes precedence over the state retirement system rules that would exclude the position from social security. Example. A teacher who was covered under a state retirement system retired and was rehired as a bus driver, a position covered by a 218 agreement. The individual is subject to social security tax under the terms of the 218 agreement. Example. A teacher who is not of retirement age retires from service due to a permanent disability. She was a member of the state teachers' retirement system and begins receiving annuity payments from the system. In 2007 she returns to work for the same school district as a part-time tutor. The school district has no 218 agreement, and the position is not covered by a state retirement plan. The teacher is a rehired annuitant and is not subject to social security tax. Because she was rehired after March 31, 1986, her wages are subject to Medicare tax. Mandatory Social Security An employee in a public retirement system and not covered by social security, who retires and then is employed by a different entity subject to mandatory social security, is subject to the mandatory coverage. Example. An employee of a school district was covered under the state employees' retirement system, but not social security. He retired in 2007, began receiving a pension and was subsequently hired by a school district covered by mandatory social security. The employee is not a rehired annuitant, and is subject to social security and Medicare tax.