One of the general beliefs about the U.S. agreements is that they allow dual-coverage workers or their employers to choose the system to which they will contribute. That is not the case. The agreements also do not change the basic rules for covering the social security legislation of the participating countries, such as those that define covered income or work. They simply free workers from coverage under the system of either country if, if not, their work falls into both regimes. If you live abroad, you may have heard of agreements between the United States and your country, which are known as totalization agreements. You may also have heard that they are referred to as social security agreements. For American expats who live and work abroad, it is very important to know if the U.S. has a totalization agreement with your host country and the details of such an agreement. Under certain conditions, a worker may be exempt from coverage in a contracting country, even if he or she has not been transferred directly from the United States. For example, if a U.S. company sends an employee to its New York office to work for 4 years in its Hong Kong office, and then re-opens the employee for an additional 4 years in its London office, the employee may be a member of Social Security under the U.S.U.K. agreement.
The rule for the self-employed applies in cases such as this, provided the worker has been seconded from the United States and is under U.S. Social Security for the entire period prior to the transfer to the contracting country. The two objectives of the totalization agreements are achieved in different ways in different agreements and make it essential to understand the concept and specifications of each home host alliance. Many totalization agreements follow the same general pattern of contribution and time. Below is a description of the types of agreements reached by some countries. Applications should include the name and address of the employer in the United States and the other country, the full name, place and date of birth of the worker, nationality, U.S. and foreign Social Security numbers, location and date of employment, and the start and end date of the assignment abroad. (If the employee works for a foreign subsidiary of the U.S. company, the application should also indicate whether U.S. Social Security Insurance has been agreed upon for employees of the related company pursuant to Section 3121 (l) of the internal income code.) Self-employed workers should indicate their country of residence and the nature of their self-employment. When applying for certificates under the agreements with France and Japan, the employer (or non-employee) must also indicate whether the worker and accompanying family members are covered by health insurance.