From Business Health Trust association partner Archbright

In 2020, Washington state passed the nation’s first long-term care insurance program, the Washington Cares Fund, paid for by a mandatory payroll tax. The program was initially scheduled to commence on January 1, 2022; however, at the 11th hour, Gov. Jay Inslee signed legislation delaying the implementation to July 1, 2023. The 18-month extension was intended to allow the Legislature to make critical improvements to the law, including expanding the reasons for exemption.

As the new implementation date rapidly approaches, most anticipate it will likely not be delayed further. Employers should prepare to withhold the tax from participating employees’ wages in the amount of .58%, or 58 cents per $100 of income. Employers may elect to pay this tax on the employee’s behalf, but the employer is not obligated to pay any amount.

Employees with a private long-term care insurance plan on or before November 1, 2021, were able to apply for an exemption before December 31, 2022. That opt-out provision is no longer available. Employees who opted out of the state program at that time will never be able to opt back in. The Employment Security Department (ESD) has stated that employees can terminate their private insurance plan if their insurance carrier allows it; however, they still cannot opt back into the program.

Starting in 2023, there are new exemption types that eligible employees can apply for, including those who:

  • Live outside of Washington state
  • Temporarily work in Washington with a nonimmigrant visa
  • Are a spouse or registered domestic partner of an active-duty military member
  • Are a veteran with a 70% or greater service-connected disability

Employees may file for the exemption on the Washington Cares Fund website and show any resulting approval letter to their employer to ensure they do not withhold the premium. Employees who no longer qualify for one of these exemptions must notify the ESD and their employer within 90 days. At that point, the employer should reinstate premium deductions, and the employee will be enrolled in the program. The only exception to this is the private long-term care insurance and service-connected disability exemptions, which are permanent.

Quarterly reporting and premium submittal are the same as for Washington Paid Family and Medical Leave — ESD is updating the Paid Leave reporting system so employers can report for both programs simultaneously. While premiums must be collected starting July 1, the first reporting period for Washington Cares Fund begins October 2023.

The long-term care insurance benefits will be available to participants starting July 1, 2026.

For more information, including sample employee communication, Business Health Trust members may utilize their complimentary Archbright access to reference the mozzo Resource Library for Washington Cares Fund Keynote or the HR Hotline. Additionally, the Washington Cares Fund employer website contains a comprehensive library of information, including an Employer Toolkit, Employer FAQs, recorded webinars, sample posters, and more.