A new State of Washington law is requiring all employers to collect a mandatory payroll deduction from employees. This payroll deduction will fund the WA Cares Fund – a new mandatory long-term care insurance benefit for workers in Washington state.  The WA Cares Fund is administered by the State of Washington and will help pay for eligible long-term care related expenses.

    The mandatory payroll deduction will begin January 1, 2022. Washington workers will initially pay $0.58 per every $100 of income, with no cap limiting the amount employees can pay in deductions and the amount of the deduction may increase over time. Employees who are eligible for the long-term care services can begin applying for benefits on January 1, 2025.

    The Employment Security Department will determine eligibility for the new benefits. To receive the benefits, an individual must reside in Washington, need assistance with three or more activities of daily living (ADL’s), and must have worked and contributed to the fund for:

• At least ten years at any point in their life without a break of five or more years within those ten,

or

• Three of the last six years at the time they apply for the benefit, and
• Worked for at least 500 hours per year during those years.

    Employers may choose to opt-out of this new mandatory deduction by purchasing their own long-term care insurance policy and submitting the policy for approval to the Employment Security Department. Employers who choose to purchase their own long-term care insurance policy must do so before November 1, 2021 and submit the policy for approval between October 1, 2021- December 31, 2022. Exemptions are for life. Once exempted, the employee will never have access to the WA Cares Fund benefit.

    When deciding to purchase a long-term care insurance policy, businesses should consider the state-adopted rules to determine if they qualify for the exemption. Long-term care education is key to helping employees understand their long-term care insurance options. Employers can offer long-term care insurance plans with reduced underwriting and group pricing that employees would not be able to get as an individual. 

    Studies show that the likelihood of needing long-term care is 40% and jumps to 70% after reaching the age of 65. Premiums for long-term care insurance are determined by age and health conditions. As an employee, selecting a long-term care policy through an employer usually offers the best priced coverage on the market and is typically portable coverage. Employees who are considering purchasing long-term care insurance can find a list of insurance companies approved to sell in Washington, along with other resources, on the Washington state Office of the Insurance Commissioner’s web page: https://www.insurance.wa.gov/long-term-care-insurance.

    For questions, contact the Washington State Employment Security Department (ESD) at www.wacaresfund.wa.gov/.