Washington is the first state in the nation to create a publicly funded, long-term-care insurance program for workers. The WA Cares Fund will be funded by employees, who will pay taxes through payroll deductions. The model is similar to the Family Leave and Medical Leave plans enacted in 2018. Beginning Jan. 1, 2022, employers are required to implement payroll deductions.
Here are a few things employers should know:
- All W-2 employees 18 years and older in the state will have a new payroll tax assessed on gross wages beginning Jan. 1, 2022. This tax is intended to provide Long Term Care coverage at a rate of $100 a day for one year of coverage. The maximum is $36,500.
- Washington workers will begin earning coverage in January 2022 by paying .58% of their total wages per paycheck into the WA Cares Fund.
- Individuals who would like to opt out of the state-managed program must have a private long-term care insurance plan in place before Nov. 1. They will then need to apply for an exemption to avoid having the automatic deduction from their paychecks starting in January 2022.
- People have until Dec. 31, 2022, to apply for an exemption. That means they would pay a year of the premium unless they opt out before the payroll deduction starts. Once you opt out of the state program, you can’t get back in.
- Through the state plan, long-term care can only be received in Washington State.
- Options for private plans are limited. Employers should encourage employees to look for a plan now to meet the Nov. 1 deadline.
- Not happy with the legislation? Contact your legislator and make your concerns known.
Deadlines are looming and questions are plentiful. Fortunately, resources are available. Here are a few:
- The WA Cares Fund website provides detailed information and an employer toolkit, featuring key messages, printable materials and more.
- Business Health Trust, an Association Health Plan (AHP) that helps small businesses navigate the complex world of health insurance and employee benefits, offers valuable insight and information about the WA Care Act, including useful resources for sorting through what it means for employers and employees.
- The July 21 installment of the South Sound Business Information Series (previously the COVID-19 Business Information Series) featured an informative panel discussion dedicated to the WA Cares Fund. Panelists included: Donna Losch, SVP Senior Benefits Consultant, Brown & Brown of WA, Inc.; Amy K. Anderson, Government Affairs Director, Health Care & Federal Issues, Association of Washington Business; and Nathan Edmondson, VP-Sales Manager, Advanced Professionals Insurance and Benefit Solutions. You can listen to a recording of the webinar here.
- For answers to your questions, check out a recorded WA Cares Fund webinar offered by Parker, Smith & Feek and Pillar International Insurance.
- On Aug. 12, BECU Investment Services will offer a free webinar that explains what you need to know now. Register here.
- The Washington Long Term Care website offers information and tools, including a long-term care tax calculator, alternatives to the State’s LTC insurance, and workshop opportunities.