Subd. 1. Definitions.

1. (a) Notwithstanding any provision of section 355.01 to the contrary, the terms used in this section are defined in this subdivision.
2. (b) "Employee" means an active member or participant of a public employee pension plan listed in section 356.30, subdivision 3, clauses (5), (6), (7), (9), (10), (11), and (12), who is not covered by a previous agreement under section 355.02 for that employment and who meets the requirements of United States Code, title 42, section 418(v)(2).
3. (c) "Employment" means service performed for compensation by an employee in the employ of the state or of a political subdivision that constitutes Medicare qualified government employment under the provisions of United States Code, title 42, section 410(p).
4. (d) "Political subdivision" means a public employer under section 355.01, subdivision 10.
5. (e) "Social Security Act" means the act cited in section 355.01, subdivision 8.
6. (f) "State agency" means the commissioner of employee relations or the commissioner's designee.
7. (g) "Wages" means compensation specified in section 355.01, subdivision 2.

Subd. 2. Optional Medicare coverage agreement.

The state agency, with the approval of the governor, may modify its agreement on behalf of the state and its political subdivisions with the Secretary of Health and Human Services to extend the provisions of United States Code, title 42, sections 426, 426-1, and 1395c, to current employees of the state and its political subdivisions who do not have that coverage through coverage by the federal old age, survivors, and disability insurance program for that employment under any previous agreement or modification of the agreement.

Subd. 3. Referendum.

A referendum on the question of extending the provisions of United States Code, title 42, sections 426, 426-1, and 1395c, must be held for each public employee pension plan listed in section 356.30, subdivision 3, except clauses (5) and (6), that has current members or participants who do not have coverage by the federal old age, survivors, and disability insurance program for the employment giving rise to that pension plan membership. The state agency shall supervise the referendum in accordance with United States Code, title 42, section 418, on the date or dates set by the governor for each pension plan. The notice of the referendum provided to each employee must contain a statement sufficient to inform the person of the rights available to the person as an employee in Medicare qualified government employment and the employee contribution rates applicable to the program. The referendum must permit each employee the opportunity to select or reject Medicare coverage. The governor shall certify to the Secretary of Health and Human Services that the conditions specified in United States Code, title 42, section 418(d)(7) have been met. Coverage is effective for members or participants of the plan who select it on the first of the month after the certification.

Subd. 4. Employee and employer contributions.

1. (a) Beginning on the first of the month after the certification by the governor, the employer of each member or participant selecting coverage under the referendum shall deduct from the wages of the employee an amount equal to the tax that would be imposed under United States Code, title 26, section 3101(b), if the services of the employee for which wages were paid constituted employment as defined in United States Code, title 26, section 3121.
2. (b) In addition to the deduction specified in paragraph (a), the employer of each member or participant covered by the referendum shall also pay an amount equal to the tax that would be imposed under United States Code, title 26, section 3111(b), on the same wage base specified in paragraph (a).
3. (c) The amounts under paragraphs (a) and (b) shall be paid by the employer to the Secretary of the Treasury in the manner required by the secretary.