Application for Washington Cares Fund Exemption Available

Now that we are reaching the end of the Open Enrollment period the State established, it is time to encourage employees to access the waiver process by logging into and follow the steps to opt out. The ability to OPT out began October 1st at 9:00am. Those wanting additional information on the exemption can go here: The first step is for eligible employees to create a Secure Access Washington (SAW) account if they don’t already have one.

Several reminders regarding the final few weeks leading up to October 31st:

  • The last day to enroll in a plan to qualify to opt out is October 31 – The policy must be purchased PRIOR TO 11/1 – that means Halloween is the drop-dead date.
  • The ability to secure a waiver through the State’s website ends December 31, 2022.
  • The payroll tax for the WA Cares Fund for those without an approved exemption begins January 1, 2022.
  • Employees are required to present their exemption approval letter to all current and future employers.


There is much speculation that since Medicaid is experiencing double digit utilization (2012 $112 billion, 2014 $134 billion, 2016 $158 billion and 2018 $183 billion), Washington State will pursue enforcement of waivers achieved from the State’s LTC tax. The purpose of the program is to create a financial buffer before Federal dollars are received to administer Medicaid long term care services and demographic trends show increasing pressure on long term needs.

Currently there are nine other states looking to enact similar legislation. It has been widely speculated that Oregon is next. Some experts claim that insurers with a stake in the Washington LTC market are lobbying for enforcement and the removal of the permanent exemption. The logistics to accomplish enforcement is not complex. For example, the state sends an exemption file to all insurance companies.  In return, insurance companies send a canceled policy report.  Once received the state chases down the resident, assesses a fine and re-enrolls the tax payor.  Though not officially confirmed, enforcement strategies are part of actual conversations with senior leadership at the LTC insurer level. On September 22, the American Council of Life Insurers (ACLI) sent a letter to the Washington Long Term Services and Supports Commission, which oversees the implementation of the Washington Cares Fund.  The letter called attention to the demand for LTC in advance of the November 1 deadline to qualify for an exemption from the payroll tax.  The letter suggested that the Commission support repeal of the lifetime exclusion of those who buy a private LTC policy and then drop coverage once they receive the exemption. It pointed out that high wage earners could contribute more in tax than the benefit they could receive and that it would create a financial burden on the Washington Cares Fund and Medicaid, which falls disproportionately on those at lower income levels. Failing to repeal the permanent exemption or failing to verify that residents maintain continual LTC coverage, could result in people gaming the system to avoid the tax, some of whom may become reliant on Medicaid to cover long term support and services.  The letter offered support for changes to the Washington Cares program to allow coordination between public and private coverage.

The Commission recently met on September 23 and will meet again on November 10 to discuss implementation of the program and possible legislative proposals. We believe the industry (through the ACLI) is lobbying for what is deemed “necessary reform.” Insurers are suggesting that if the Commission changes the rules to add a mandate for continuous coverage, they can and should change rules and explore making it more difficult to cancel coverage.

At this time, this is strictly speculation based on industry response to a concerning retention issue. We will continue to update clients as information is received.

We encourage you to visit the State’s website on the WA Cares Fund for updates and further resources as information continues to be updated.