Long-Term Care Act Update
27 Jan 2022
Last night, two key bills surrounding the state’s contentious Long-Term Care program passed the legislature, heading to the Governor’s desk for final approval. House Bill 1732 delays implementation of the Long-Term Services Support Trust Program (WA Cares) for 18 months and House Bill 1733 adds a number of voluntary exemptions for special populations. Governor Inslee is expected to sign both pieces of legislation by the end of the week.
The Long-Term Care Trust Act passed the state legislature in April 2019, establishing the country’s first social insurance program to pay for long-term care. The WA Cares program is funded by a mandatory payroll tax of 58 cents on every $100 of income. After paying into the fund for ten years, Washingtonians are entitled to a lifetime benefit of $36,500 to cover the cost of in-home and nursing home care including bathroom upgrades, accessibility ramps, compensation for family member to provide care, rides to the doctor, professional care, or other services.
The WA Cares payroll tax will have a direct impact on employers attracting and retaining talent in an already tight labor market and challenging housing affordability conditions regionally in addition to other regulatory and tax burdens facing the business community. This mandatory payroll tax adds to the myriad of economic and corporate social responsibility pressures currently facing employers. One specific challenge is the significant administrative workload that comes along with implementing a new social insurance program. Employees could pay into the system for decades with no guarantee of a benefit if they leave the state. Additionally, the workforce required to operate a long-term health care program has not yet been established. Finally, it is important to note that challenges in the current insurance regulatory system have negatively impacted the private long-term care options on the market today.
Workers were allowed to opt out of the program by buying private insurance by November 1st, 2021 and applying for an exemption through the Employment Security Department. In the end, more than 450,000 workers opted out of the program.
There have been multiple efforts to repeal or modify WA Cares. In June 2021, opponents filed Initiative 1436 which would have allowed employees to opt-out at any time. The campaign collected about 200,000 signatures, short of the 325,000 required to make it to the ballot. In November 2021, three employers and six workers filed a lawsuit against Governor Jay Inslee and others.
In December, Governor Inslee announced that the state would not collect the tax until April to allow the legislature the opportunity to convene and make adjustments to WA Cares.
READ ABOUT THE BILLS
- House Bill 1732 delays implementation of the program by 18 months.
- House Bill 1733 provides voluntary exemptions for the program, including certain veterans, military spouses, nonimmigrant temporary workers, and employees who work in WA but live outside of the state.
Please reach out to Misha Lujan, Government Relations Manager, with any questions.