Washington Long Term Care

Washington has established a state-operated public insurance program to pay for long-term care services through House Bill 1087 and Companion Bill SB 5331, The Long Term Care (LTC) Act. This email provides further information on the upcoming Act, payroll requirements, and benefit & qualification information. Employers should watch for further guidance on the payroll tax requirement from Washington’s Employment Security Department. This benefit will be funded through a monthly payroll deduction of 0.58%. Self-Employees individuals would need to opt into the benefit contribution.

In the Know:

• All Washington W-2 workers will contribute to this benefit through payroll. Self-employed workers may opt-in.
• Starting January 1, 2022 there will be a required contribution of 0.58% (58 cents per $100 of income).
• Benefits begin January 1, 2025.
• Anyone 18+ years of age who is vested who then requires assistance with at least three activities of daily living access this lifetime benefit coverage of $36,500/person (as adjusted for inflation).
• The vesting period is 10 years without a break of 5+ years.
• Anyone who moves out of Washington for 5 years forfeits the premiums and the benefit.
• An opt-out procedure for those who have private LTC insurance will be available, however, currently once you opt-out you can’t opt back in at a later date. Under an upcoming bill that is waiting to pass in the state legislature, there would be a limited individual exemption for employees who have long term care insurance as of July of 2021 and apply for an exemption during the specified period.

What Benefit Does the Long-Term Care Trust Act Create?

• The Long-Term Care Trust Act sets up a new benefit that allows people to contribute a little bit over the course of decades to gain relief from expensive bills at the moment they need care.
• The benefit could be utilized in part or as a whole covering long term care needs over months or years.
• The Long-Term Care Trust Act is projected to save Washington taxpayers $19 million in the first year of operation by helping people pay for care before they impoverish themselves to receive Medicaid.
• The lifetime benefit maximum is $36,500 ($100/day), indexed to inflation, which will make a significant difference in helping people preserve their savings, while paying for essential long-term care services.
• Families would be able to decide how to spend the benefit, which could pay for in-home care, nursing home care, and other approved long-term care services and supports like respite, a wheelchair ramp, meals on wheels or rides to the doctor.
• Workers would pay into the fund for a minimum of ten years. There is also a safeguard for unexpected crises, allowing people to use the benefit if they have paid in three of the previous six years.