Washington’s new long-term care insurance program has seen its first set of implementation rules adopted and a new website launched for the program.

AWC has been keeping members apprised of the upcoming implementation of the Long-Term Services and Supports program (LTSS). The program has been rebranded the WA Cares Fund and now has a new central website. New rules for exemptions from the WA Cares Fund payroll tax have made their way through the rulemaking process, with more premiums rules on the way.

As an overview, the WA Cares Fund was passed in 2019 to create a first-in-the-nation public long-term care benefit for Washington workers. Benefits are intended to be used to help cover costs of daily living activities for people needing long-term care, such as adult day services, in-home personal care, and family caregiver respite. The benefit is funded by a 0.58% employee-paid payroll tax. Employers are not taxed, though they are responsible for collecting and remitting the premiums to the state. There is no salary cap on the LTSS payroll tax. By way of comparison, the Paid Family & Medical Leave payroll tax is 0.4%, shared by employees (0.264%) and employers (0.136%) and is limited to wages under the Social Security cap ($142,800 in 2021). To qualify for LTSS benefits, employees must pay premiums for at least three of the most recent six years, or at least ten years total (including at least five consecutive years). There is also a $36,500 lifetime benefit cap.

Employers will need to begin withholding the payroll tax from employee paychecks starting January 1, 2022, unless an individual employee has applied for an exemption from the program. Program benefits for eligible beneficiaries will not become available until January 1, 2025.

ESD launches new program website

In early May, the three agencies that jointly operate the long term care program (Employment Securities Department, Department of Social & Health Services, and Health Care Authority) launched a new website and rebranded the program the WA Cares Fund. The website includes an employer toolkit that gives a timeline for the program’s employer outreach and implementation plan, information for employers to share with employees about the program, and the opportunity for users to sign up to receive program updates through GovDelivery. ESD anticipates doing direct outreach to employers in the spring and summer of 2021 and will ramp up outreach and education efforts in the fall and winter for employees and the general public.

ESD continues working on implementation rules for WA Cares Fund

During the 2021 legislative session, a new bill was passed (HB 1323) to modify the existing statutory framework for employees wishing to be exempted from the WA Cares Fund payroll tax. AWC wrote about the bill in our Legislative Bulletin in April here and here. Thanks to the bill, employees that want to apply for an exemption from the payroll tax will need to obtain alternative long-term care insurance coverage by November 1 of this year. This new requirement will be folded into ESD’s Phase 1 rules which were completed in May and are effective this month.

To apply for a permanent exemption from the WA Cares Fund payroll tax and program, an employee will need to:

• Be at least 18 years old;
• Obtain alternative long-term care insurance by November 1, 2021; and
• Apply to ESD for an exemption between October 1, 2021 to December 31, 2022.

Approved employees will be sent an approval letter, which they will need to keep and present to their employers, informing them of the employee’s permanent exemption from the WA Cares Fund program.

ESD is now working on Phase 2 rules, which deal with premium collection, collective bargaining agreement exemptions, election of coverage, refunds, reporting and payments, and appeals. The draft rules are available here. No stakeholder meetings are currently scheduled, though they are expected to be. ESD hopes to have its Phase 2 rules ready by September 2021. Phase 3 rules, dealing with determining “qualified individual” status, audit functions, and designated representatives, are expected by April 2022.

AWC Trust to offer alternative long-term care coverage

AWC Employee Benefit Trust members have the option to make available a new Long-term Care group coverage plan to their employees. An email of interest was sent this week to Trust insured employers. While this plan is not available to non-Trust members, staff is looking to make available a self-service individual LTC option where employees can obtain personal LTC proposals.  These coverages will qualify as opt-out coverage. For more information, contact Trust staff at benefitinfo@awcnet.org.