INSIGHTS

Washington State Long-Term Care: Info for Employees

September 22, 2021                                                                              

Starting January 2022, working Washingtonians who are 18 or older will begin to pay taxes for a program designed to provide Long-Term Care. The WA Cares Fund is the nation's first public state-operated long-term care insurance program.

Apply for Permanent Exemption on October 1
ESD will begin accepting exemption applications from individuals on October 1, 2021. If you have purchased a private long-term care plan and plan to apply for exemption from the WA Cares Fund, we strongly encourage you to apply through the ESD as soon as applications become available and are being accepted.

Following are the steps to apply for permanent exemption:

  1. Visit the ESD website to submit your application for exemption. Please note that application forms will likely not be available until October 1.
  2. If your application is approved by ESD, you will receive an exemption approval letter that you must provide to your employer.
It could take many months for the State to process applications and exemptions won’t take effect until the quarter after your application is approved.

For example, if you receive an approved letter from ESD on January 20, 2022, your employer is still required to withhold WA Cares Fund taxes from your paycheck until the quarter ends on March 31, 2022. There is no reimbursement option to collect this tax back, even if your exemption was approved earlier in the quarter.

How to Opt Out of the WA Cares Fund
You can permanently opt out of this program if you:

  • Purchase a qualifying private long-term care insurance plan before November 1, 2021.
  • Are at least 18 years of age.
  • Submit an exemption application to the Employment Security Department (ESD). Exemption applications will be available starting October 1, 2021 and will only be accepted through December 31, 2022.
Keep in mind, if you apply and are approved for an exemption, you’ll be permanently disqualified from WA Cares and you may never re-enroll or receive any WA Cares benefits.

As a reminder, here are some key facts about the WA Cares Fund program:

  • The tax is .58% of payroll, or 58 cents per $100 of income. Therefore, if you earned $100,000 per year, you would pay $580 per year in taxes.
  • The amounts withdrawn from your paycheck will be remitted to the Washington Employment Security Department.
  • If you pay into the system for 10 years and remain in Washington, you can receive up to $100 per day, up to $36,500 lifetime, in long-term care benefits.
  • The coverage is triggered by needing support prescribed by a physician for activities such as bathing, dressing, eating, taking medication, etc. The intent of this coverage is to help with in-home or assisted living expenses associated with being unable to take care of oneself without help.
  • While the payroll tax is effective as of January 1, 2022, no benefits are payable until 2025.

If you have questions about the WA Cares Fund, please reach out to us.

 

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