Washington Mandatory Long Term Care

Washington Long Term Care Update: WA Cares Fund Payroll Tax Postponed

On January 27, Governor Inslee signed two bills passed by the legislature to make improvements to the WA Cares Fund. The changes address gaps in the program and delay the implementation of the payroll tax.

  • The payroll tax has been delayed until July 2023
  • Workers near retirement (born beofre 1968) will be able to qualify for partial benefits on a pro-reated basis
  • Employees working in WA, but live outside of the state, military spouses, and certain veterans with disabilities will be able to opt out of the program if they choose

The WA Cares Fund website is being update to reflect the changes; please continue to review the site for updates on WA LTC tax and benefit.

How to Opt Out and Apply for an LTC Tax Exemption

To apply for a permanent exemption from the LTC payroll tax, you must:

  • Have a qualifying private LTC insurance plan before November 1, 2021.
  • Be at least 18 years of age.
  • Submit an exemption application to the Employment Security Department (ESD). Exemption applications will be available starting October 1, 2021, and applications will only be accepted through December 31, 2022.

Information on creating an account and applying for the exemption can be found on the WA Cares Fund website.

The ESD will review your application and notify you if you are eligible for an exemption.

Once you receive a copy of your exemption approval letter, email a copy to the Employee Service Center hrhr@rei.com.

You will be required to present your exemption approval letter to all current and future employers.

Long term care (LTC) coverage provides services that people need as they age or become ill. Services include help with daily tasks, such as getting dressed, bathing, transfer assistance, continence, toileting, eating and more. LTC coverage helps pay for care associated with nursing home, assisted living or home health care. Learn more through Washington State’s Department of Social and Health Services.

Beginning January 2025, Washington State employees who qualify may be entitled to an LTC lifetime benefit of $36,500 to pay for LTC services and support. To receive the benefit, an employee must pay into the program for:

  • Three of the past six years, or
  • A total of 10 years (five of which must be consecutive) and
  • Work at least 500 hours per year during those years.

LTC services can only be provided in Washington and the benefit requires the loss of functional ability in three of 10 daily activity triggers. Under the legislation, daily activity triggers are defined as medication management, personal hygiene, eating, bathing, dressing, transferring (i.e., walking, sitting), toileting, body care, ambulation/mobility and cognitive impairment.

The benefit can be used for a range of services and supports such as:

  • Professional in-home care, nursing home stays and other LTC
  • Adaptive equipment and assistive technology
  • Home accessibility modifications
  • Support for family members who are providing care
  • Home-delivered meals and rides to the doctor

You can find additional information regarding Washington LTC services on the WA Cares Fund website.

You can opt out of the payroll tax only if you purchase a qualifying private LTC Insurance plan before November 1, 2021, and apply for an exemption through the state’s ESD.

Beginning January 2025, Washington State employees who qualify may be entitled to an LTC lifetime benefit of $36,500 to pay for LTC services and support.

No, LTC services can only be provided in Washington and the benefit requires the loss of functional ability for three of 10 daily activities. Daily activities are defined as medication management, personal hygiene, eating, toileting, transferring, body care, bathing, ambulation/mobility, dressing and cognitive impairment.

Yes, you can opt out of the payroll tax only if you purchase a qualifying private LTC Insurance plan before November 1, 2021.

Once a qualifying private LTC Insurance plan is purchased, you will need to apply for an exemption with the state’s ESD. For more information on how to apply for an exemption, please see the WA Cares Fund website.

Employees that receive an exemption from Washington State are permanently ineligible for state LTC coverage and can never become a qualified individual or eligible beneficiary. Your exemption letter will need to be retained indefinitely.

You have from October 1, 2021, through December 31, 2022, to request an exemption. If you have a private LTC plan, you will need to retain the exemption letter from the ESD indefinitely. An exempt employee must provide written notification to all current and future employers of an approved exemption. Please note that retroactive tax adjustments will not be made.

If you receive an exemption from the state, you are permanently ineligible for state LTC coverage and can never become a qualified individual or eligible beneficiary.

a) I live in Washington and work in Oregon.

If you live in Washington and work in Oregon, you will not pay taxes and not be covered under this program.

b) I live in Oregon or Idaho and work in Washington.

If you live in Oregon or Idaho and work in Washington, you will able to opt out of the WA LTC program if you choose. You will need to file an exemption with the Employment Security Department. More information can be found on the WA Cares Fund website.

The following are questions to consider when looking at a private LTC policy:

  • What is the maximum benefit provided?
  • How many Activities of Daily Living (ADLs) need to be met to become eligible for the benefit? Will cognitive impairment alone qualify me for benefits?
  • When will my LTC coverage begin?
  • When will my benefit payments begin?
  • Will I receive benefit payments if my care is provided outside Washington State or the U.S.?
  • Will the cost of coverage change through the life of the contract due to my age or my income? Do I want to purchase inflation coverage?

Due to the sheer volume of applications for new Long Term Care or Life with Long Term Care insurance submitted, as of the first part of September 2021 most LTC and life carriers have temporarily suspended all WA state new business. REI is not aware of any options currently available which would allow you to purchase a private policy in order to opt out of the state plan. Please refer to the state’s website for additional information in relation to private insurance.

No, the LTD plan available to REI benefit-eligible employees is a separate type of insurance that is different from LTC Insurance. For this reason, LTD doesn’t meet the requirements for a premium exemption under the WA Cares Fund.

To apply for a permanent exemption from the LTC payroll tax, you must:

  • Have a qualifying private LTC insurance plan before Nov 1, 2021.
  • Be at least 18 years of age.
  • Submit an exemption application to the Employment Security Department (ESD). Exemption applications will be available starting October 1, 2021, and applications will only be accepted through December 31, 2022.

Information on creating an account and applying for the exemption can be found on the WA Care Fund website.

The ESD will review your application and notify you if you are eligible for an exemption. You will be required to present your exemption approval letter to all current and future employers.

For additional information on the exemption process, click here.