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As we previously reported last year, legislation was passed to delay the implementation of the Washington CARES Long-Term Care Fund (WA CARES). This action postponed the start date for employers to collect WA CARES payroll deductions from Washington-based employees to July 1, 2023 (the date was originally scheduled for January 1, 2023).
Although additional changes to WA CARES may still come before July 1, 2023, employers are advised to begin preparations now for these new payroll deductions. Please review the timeline below and read on for more details.
WA CARES was enacted in 2019 and is the nation’s first mandatory, state-administered long-term care insurance (LTC) program for workers. It is intended to operate similarly to Social Security benefits, where all workers participate in the program funding and earn coverage over the course of their working years.
Employers are required to deduct WA CARES contributions from their employees working in Washington state.
Employers are not required to contribute to the program as WA CARES is solely funded by employee wage deductions. However, employers may choose to contribute to WA CARES on behalf of their employees in Washington.
Under WA CARES, employees are considered employed in Washington if their work is localized in Washington. If an employee’s work is not localized in any state, but performs some services in Washington and the services are directed or controlled from Washington, then the employee is covered under WA CARES.
The following employees are not subject to WA CARES:
Payroll Deductions & Benefits
The WA CARES payroll deduction tax is 0.58% of employee wages, not subject to a cap. Employers are required to withhold these deductions beginning July 1, 2023, and remit them to a state-run trust to fund LTC benefits.
All Washington taxpayers who have contributed to the program for 10 years are eligible to receive the benefit of LTC care services and supports costing up to $36,500 over their lifetime.
As of January 1, 2023, the following workers in Washington are permitted to seek exemptions from WA ESD and the exemption application website can be accessed here:
If approved, these employees must provide written notification to the current and future employers of their WA ESD exemption letter. Their WA CARES contributions will terminate on the first day of the quarter following their exemption approval.
Except for veterans with a 70% service-connected disability (considered a permanent exemption), workers outlined directly above must notify their employer and the WA ESD within 90 days of the expiration of their exemption status. Failure to do so will result in the payment of unpaid WA CARES contributions with interest of 1% per month to the WA ESD.
Employees in Washington born before 1968 and who do not meet the 10-year minimum for WA CARES contributions may receive a prorated 10% benefit available for each full year they contribute.
WA CARES benefits will be available for qualified, eligible individuals on July 1, 2026, rather than the original January 1, 2025 effective date.
The WA ESD created a helpful employer toolkit with WA CARES-related materials that can be accessed here.
As this July 1, 2023 start date for WA CARES payroll deductions approaches, employers are advised to:
Risk Strategies is closely following these developments and will provide updates when available. Reach out to your Risk Strategies representative with questions or contact us at email@example.com.
 WA CARES definition of "employment" mirrors that of the Washington Paid Family and Medical Leave (PFML) program. As a result, employees covered under WA PFML are also covered under WA CARES.