Two bills that aim to fix issues that have arisen with the state’s new long-term care program, WA Cares, are expected to receive hearings and possible committee votes in the first week of session. Several other bills addressing issues with the program have also been introduced, though many of them are not expected to move.

HB 1732, sponsored by Rep. Pat Sullivan (D–Covington), delays the implementation of the WA Cares Fund payroll tax and benefits program by 18 months. Under the bill, the payroll tax would retroactively not go into effect until July 1, 2023, and benefits under the program would not be issued until July 1, 2026. The bill also requires the refund of any premiums that were collected prior to the new 2023 implementation date.

The bill also addresses one of the issues highlighted by the Long-Term Services & Supports Commission regarding “near-retirees.” It allows people who are nearing retirement age (those born before January 1, 1968) to become eligible for long term care benefits if they paid premiums for at least one year before retiring. This favorable treatment in the bill is because under current law, near-retirees will still be required to pay premiums but are unlikely to remain in the workforce long enough to pay the 10 years’ worth of premiums needed to permanently vest in the program. One of the key issues in the recent class action lawsuit filed against the WA Cares Fund program is that some employees are required to pay premiums into the program but are never eligible for benefits.

Rep. Sullivan is the House Majority Leader, which adds important leadership weight to the bill.

HB 1733, sponsored by Rep. Dave Paul (D–Oak Harbor), creates new categories of voluntary exemptions from the WA Cares Fund payroll tax and program, including:

• US military veterans with a 70% or greater service-connected disability;
• Spouses or domestic partners of active duty military service members;
• Workers with a non-immigrant visa for temporary workers; and
• Out-of-state residents that work in Washington.

The bill contains provisions for ending the above exemptions and bringing the exempted employees back in the WA Cares Fund program if the military spouse separates from their military member spouse, their military member spouse leaves the military, an employee with a non-immigrant visa becomes a permanent US resident or US citizen, or an out-of-state resident working in Washington establishes residency in Washington.

Neither HB 1732 nor HB 1733 addresses Washington employees that pay premiums, vest in the program, and then live out-of-state at the time they need to access long-term care benefits, which was one of the issues recommended to be addressed by the LTSS Commission.

Both bills are being fast-tracked with both public hearings and committee votes scheduled for the first week of session.

Other WA Cares Fund bills

Though the above two bills may be the primary vehicles for changes to the WA Cares Fund program, several other bills have been introduced. At the moment, it is unclear how likely it is for these bills to see legislative action. Here is a quick rundown of other long-term care program bills:

Rep. Peter Abbarno (R–Centralia) has introduced several bills related to the WA Cares Fund:

• HB 1594 would outright repeal the new long-term care program.
• HB 1596 requires that long-term care benefits be paid to eligible beneficiaries that live outside Washington at the time they apply for benefits and sets guidelines for using benefits to compensate out-of-state service providers.
• HB 1599 allows recent graduates from high school or two-year and four-year post-secondary programs to apply for a permanent exemption from the WA Cares Fund program if they obtain alternative long-term care insurance and apply to ESD for an exemption within 36 months of their graduation.
• HB 1598 creates a property interest in a qualified individual’s remaining balance of long-term care benefits, the cash value of which can be transferred to a named beneficiary if the qualified individual dies.
• HB 1597 allows employees in a household at or less than 300% of the federal poverty level to apply for a temporary exemption from the long-term care payroll tax. It also allows a person with a hardship exemption to cancel their exemption and resume premiums to continue towards qualified individual status.

HB 1742, sponsored by Rep. Joe Schmick (R–Colfax), is another bill that would allow qualified individuals living outside of Washington to access WA Cares Fund benefits. It would require DSHS to disburse payments directly to eligible out-of-state beneficiaries who could then use the benefits to pay for their approved out-of-state services. The bill would automatically exempt out-of-state residents that work in Washington from the payroll tax and cap the taxable wages to the social security cap. It would also allow additional exemptions from the payroll tax through 2026 and require exempted employees to periodically re-certify that they have maintained alternative coverage, otherwise they are pulled back into the WA Cares Fund tax and program.

SB 5611, sponsored by Sen. Mark Mullet (D–Issaquah), would allow retired veterans who qualify for federal veterans benefits or veterans disability benefits to apply for an exemption from the WA Cares Fund payroll tax and program.

SB 5672, sponsored by Sen. John Braun (R–Centralia), requires the state to refund the premiums of a deceased qualified individual to their estate if the qualified individual had a dependent with a developmental disability. The refund is contingent on the deceased person never having been determined an eligible beneficiary.

SB 5737, sponsored by Sen. Lynda Wilson (R–Vancouver), requires that ESD exclude any employees with pending (but unprocessed) exemption applications as of January 1, 2022 from their premium calculations. It also requires that employers not withhold the payroll tax from employees with unprocessed exemption applications as of January 1, 2022 and refund any payroll taxes that were assessed to such employees.

Dates to remember

HB 1732 and HB 1733 are both scheduled for public hearing in the House Appropriations Committee on Tuesday, January 11 at 3:30 pm. Both bills are also scheduled for a vote in the House Appropriations Committee on Thursday, January 13 at 3:30 pm.