Washington state Governor Jay Inslee signed legislation on January 27, 2022, delaying implementation of the Washington CARES Long-Term Care Fund (WA CARES). Employers in Washington state are now required to postpone collecting WA CARES premiums from employees until July 1, 2023, rather than the original January 1, 2022 date.
Background:
WA CARES was enacted in 2019 and is the nation’s first mandatory, state-administered long-term care insurance program for workers.
WA CARES initially required employers to implement a mandatory 0.58 percent premium deduction on employee wages starting on January 1, 2022. Employers are required to withhold these premium deductions and remit them to a state-run trust to fund long-term care benefits. All state taxpayers who have contributed to the program for 10 years and are eligible to receive the benefit can access long-term care services and supports costing up to $36,500 over their lifetime. Employers are not required to contribute to the program. Further, employees can apply for an exemption to permanently opt-out of the program and are not required to pay WA CARES premiums if they provide proof to the state that they purchased their own long-term care insurance before November 1, 2021.
With the passage of new this legislation by Washington lawmakers on January 27, 2022, the effective date for employers to begin employee premium deductions is now delayed by 18 months to July 1, 2023, along with other program delays and changes outlined below.
Employer Actions:
-
Premium Deductions Delayed: Employers are now required to deduct, remit and report WA CARES employee premiums starting on July 1, 2023. Initially, employers were required to start collecting WA CARES employee premium deductions on January 1, 2022.
-
Refund Premiums: If employers already deducted WA CARES premiums from employees since January 1, 2022, they must provide refunds in full to employees within 120 days.
-
New Exemption Categories: Employers should be aware that the following workers will now be permitted to seek exemptions from the state, starting January 1, 2023:
-
Veterans with a service-connected disability of 70% or higher
-
Spouses or registered domestic partners of an active duty service member: This exemption expires when the active duty service member is discharged from military service or the marriage/registered domestic partnership ends.
-
Non-state residents working in state: This exemption expires upon the non-resident worker establishing a permanent address/primary location within Washington state.
-
Workers with a nonimmigrant, temporary worker visa: This exemption expires upon the temporary worker becoming a permanent resident or citizen.
As a reminder for employers, if an employer receives an exemption letter from an employee for WA CARES, the employer will be required to stop withholding WA CARES premiums for that employee and maintain a record of the exemption letter.
-
Partial Benefits for Certain Workers: The new legislation allows workers born before 1968 and who do not meet the 10-year minimum for paying WA CARES premiums to receive one tenth of the maximum benefit available for each full year that they pay premiums.
-
New Benefit Availability Date: WA CARES benefits will be available on July 1, 2026, rather than the original January 1, 2025 effective date.
Risk Strategies will continue to monitor developments and work diligently to provide our clients with the most up-to-date information.
