The Long Term Care Trust Act

Thursday, August 19, 2021
April Amundson

April Amundson

Manager
ESD

Kelly Lindseth

Kelly Lindseth

Manager
ESD

Ben Veghte

Ben Veghte

Director
DSHS

Commissioner Cami Feek, April Amundson and Kelly Lindseth of Washington State's Employment Security Department, and Benjamin Veghte, Ph. D. from the Department of Social and Health Service, joined CEOtoCEO to provide an update on the State's Long Term Care Trust Act scheduled to begin impacting employee paychecks in January 2022.

The Long Term Care Trust Act (H.B. 1087) was signed by Governor Inslee on May 13, 2019. The legislation has been moving forward to implementation mainly unnoticed, lost in the challenges of the day-to-day dealing with the pandemic and recovery for most employers. Today's presentation was an opportunity for viewers to get an update on this new State program, and learn how it will impact their business and employees in the months to come.

The State of Washington refers to the LTC program as the "WA Cares Fund." During the presentation, representatives from ESD and DSHS detailed the thought behind the new approach to Long-Term Care. They discussed what the WA Cares Fund is, why they think it's good for Washington, how it will support Washington families, how the program will work, and who has administration and oversight of the program.

The WA Cares Fund is an earned benefit, only available to those who contribute. It is self-funded from worker contributions, and was enacted as a way to reduce the potential need to raise taxes to pay for Medicaid LTSS costs associated with the coming age wave of seniors. Contributions through payroll deductions begin January 1, 2022, however, benefits begin January 1, 2025. The rate of the tax will be 0.58% of employee compensation. Speakers estimated the average worker will pay $24/month over their career. However, the rate will depend on an employee's income, and there is no income cap. This has prompted high income earners to seek out private long-term care coverage to opt-out of the WA Cares program.

In addition to the programmatic information that was shared, representatives from DSHS and ESD discussed the process to "Opt-Out" of the payroll tax contributions, and the timeline to do so. Once opted-out, individuals will be permanently withdrawn from the program.

The viewing audience had numerous questions pertaining to the opt-out process, employees working out of state, and how the premium contributions apply to business owners.

All of the questions that were addressed during the Live Stream, and written responses, including links to important online resources, will be available to Premium Subscribers, in addition to the presentation slides. This information will be a valuable asset to business owners and executives moving forward.

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