Long Term Care
The Washington State Long Term Care Trust Act (LTCA), was signed into law in April of this year. Eligible individuals will be able to apply for benefits beginning in January of 2025. This program will be funded by a NEW, EMPLOYEE PAID, payroll tax of 0.58%. The LTCA begins funding activities January 1, 2022, through a NEW 0.58% payroll tax for all W-2 employees in Washington.
Washington Care Fund web address: http://www.wacaresfund.wa.gov/
Individuals DO have the one time ability to Opt-Out of this tax permanently. Any individual who has a long term care insurance policy in place prior to 11/1/2021, may apply for a lifetime exemption from the new payroll tax. The period of time the State will accept applications for exemption will begin October 1, 2021, and will end 15 months later on December 31, 2022. The district cannot opt out for any of its employees. This is an employee's responsibility.
Drawbacks to the LTCA (reasons an individual may want to opt out of the LTCA):
- Benefits are only payable for facilities in Washington State
- $36,500 Lifetime Benefit Cap
- No income cap on the .58% payroll tax
- 10-Year Vesting Schedule
- No future opportunity to opt out of the plan if an individual does not have their own LTC plan prior to 11/1/2021
- No guarantee payroll tax percentage of .58% won’t increase substantially in the future.
Due to any of the drawbacks to the LTCA above, you may want to consider purchasing a private long-term care policy if you don’t already own one. Owning a private Long Term Care policy prior to 11/1/2021 will allow you to be permanently exempt from the state program and from the 0.58% payroll tax.
- November 1, 2021: Date an individual
- November 1, 2021: Date an individual long term care policy must be effective prior to, to be eligible for exemption from the payroll tax.
- October 1, 2021: Eligible individuals may apply for exemption from the payroll tax from the ESD.
- January 1, 2022: Employers must begin collecting premiums from employees’ paychecks. (Excluding those employees who have received an exemption from the ESD.)
- December 31, 2022: Deadline for Eligible individuals to apply for an exemption from the payroll tax from the ESD.
- January 1, 2025: First time individuals may apply for benefits from the LTCA.
For more information on this law, please refer to: RCW 50B.04 AND 48.83.020 AND WAC 192-900-010 and HB 1323
Below is the link to the Office of the Insurance Commissioner, WA State and approved companies that sell LTC in WA State: