WA Cares Long Term Care Tax on Hold

On January 27, Washington Gov. Jay Inslee signed two bills passed by the state Legislature that have put the brakes on the WA Cares Fund, which Business Health Trust first addressed in July in our article “Are You Prepared for the WA Long-Term Care Act?

As originally written, the law would have mandated public long-term care (LTC) benefits for Washington residents that would be funded by Washington wage earners via a 0.58% tax on employee wages. Washington state residents contributing to the program would have become eligible to a lifetime benefit of $36,500 to pay for long-term services and support (in Washington state). Please watch our short video below video to learn more:

According to the WA Cares Fund website, the new bills 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 details on the changes, you can read House Bill 1732 and House Bill 1733.

For now, employers should:

  • Stop withholding WA Cares premiums from employee earnings.
  • Reimburse employees for WA Cares premiums within 120 days of the date premiums were collected.
  • Continue to maintain copies of exemption approval letters for workers who’ve provided them.

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