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August 27, 2019
2019-1532

Washington law to require payroll deduction for state-run long-term care insurance

Recently enacted Washington state legislation (HB 1087) establishes a state-run long-term care insurance program. Employees will pay for the long-term care insurance through payroll deduction. Employees who demonstrate that they have private long-term care insurance are exempt from the requirement. Self-employed individuals may elect to participate.

Beginning January 1, 2022, and through December 31, 2023, employers will withhold and remit to the Washington Employment Security Department premiums equal to 0.58% of employee wages. Effective January 1, 2024, the Department will determine the premium biannually at a rate not greater than 0.58%.

Long-term care insurance benefits

Beginning January 1, 2025, individuals are eligible for the long-term care benefit if they are at least 18 years old and have either (1) paid the premium for at least three years within the last six years or (2) have paid the premium for a total of 10 years, with at least five of those years paid without interruption. Additionally, an individual must have worked at least 500 hours within the eligibility determining year.

Upon becoming eligible, an individual is entitled to up to $100 a day, up to a maximum of 365 days over the course of the individual's lifetime.

For more information on the legislation, see the Governor Inslee's press release.

Ernst & Young LLP insights

Washington is the first state to establish this type of government insurance. However, according to Forbes, Washington may soon be joined by Illinois and Michigan, both of which have been looking at ways to institute a similar program, and California, where the governor has made services for the elderly a top priority. (Forbes article, 5-15-2019.)

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)

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