Update from the official Washington Cares Fund website:

“On January 27, Governor Inslee signed two bills passed by the Legislature making key improvements to WA Cares Fund. These reforms will address coverage gaps and delay program implementation by 18 months. Changes include:

• Workers near retirement (born before 1968) will be able to qualify for partial benefits on a pro-rated basis.

• Workers who live out of state and work in Washington, military spouses, workers on non-immigrant visas, and certain veterans with disabilities will be able to opt out of the program if they choose.

• Workers will begin contributing to the fund in July 2023. Employers will refund any premiums collected in 2022 so far.”

For more information go to https://wacaresfund.wa.gov.

As of this time, the state has not changed the requirement of owning a qualifying LTC policy with an issue date prior to November 1, 2021. If you have purchased a long-term care insurance policy in connection with this law, and want to remain exempt from paying this tax, we strongly encourage you to keep that policy in-force.

What is the Tax?

There is a new Washington State long-term care tax. The tax is set at 0.58% and will automatically come out of your paycheck at an amount of 58 cents for every $100 of W2 income you earn, and is subject to change beginning in 2024 and every two years thereafter. So, as an example, if you currently earn $100,000 of W2 income, you will be paying $580 of additional taxes each year for this state benefit. Additionally, there is no cap on the earnings that will be taxed, meaning however much income you earn, that amount will be taxed.

What Does the State Long-Term Care Program Offer?

The state pays a set benefit regardless of how much your income is and the amount of taxes you pay into this state account. In other words, whether you have paid $10,000 into this tax fund or $100,000 into this tax fund, the benefits will be the same and are as follows:

• up to a maximum daily benefit of $100 a day
• a lifetime maximum benefit of $36,500
• benefits are subject to change in the future

To qualify to receive these designated benefits in the future, you must be unable to perform 3 activities of daily living (ADLs) on your own, which can include things such as eating, dressing, bathing, transferring, toileting, and cognitive impairment (private policies only require you to be unable to perform 2 ADLs to qualify for your benefits to start paying). You also must have paid this tax for a certain number of years and worked above a specified level of hours during that time. Finally, the benefit will only pay out if you are living in Washington State at the time of a claim.

How Do You Opt-Out of the Tax?

If you are a W2 employee, to opt-out of this tax you must be at least 18 years of age at the time you apply for an exemption and purchase a qualifying long-term care insurance policy, as defined by the state under RCW 48.83.020, by November 1, 2021. Once you opt-out of this tax you cannot choose to re-enroll, meaning you will no longer have access to the state’s long-term care program.