Tax News Update    Email this document    Print this document  

Legislation was enacted under HB 1732 and HB 1733 that modifies the Washington long-term care insurance program (WA Cares Fund) by delaying collection of employee premiums from January 1, 2022 to July 1, 2023 and the receipt of benefits from January 1, 2025 to July 1, 2026. (Senate Bill Report for SHB 1732.)

Employers must refund to employees any premiums within 120 days of the premium collection. If the employer remitted the premiums to the Washington Employment Security Department (ESD) then the employer must issue employee refunds once ESD remits refunds to the employer.

On December 17, 2021, Washington Governor Jay Inslee announced plans to change and improve the WA Cares Fund during the 2022 legislative session and, accordingly, the ESD was instructed to not collect premiums from employers until April 2022 or until the state legislature gave further direction.

HB 1732/177 also make other changes, including:

• Self-employed individuals must elect coverage before July 1, 2026, rather than January 1, 2025.
• The ESD will again be accepting applications for voluntary exemptions from the program on January 1, 2023.
• The first biennial actuarial audit and valuation of the Long-Term Services and Supports (LTSS) Trust Program is due July 1, 2025, rather than January 1, 2024.
• The employer outreach program that ESD and Department of Social and Health Services (DSHS) are required to conduct is updated to account for the delayed premium assessments.
• The first biennial actuarial audit and valuation of the LTSS Trust Program is due July 1, 2025 rather than January 1, 2024.
• The reporting requirement for the LTSS Trust Commission to recommend a methodology for calculating future administrative expenses is delayed from November 15, 2025 to November 15, 2027.
• The requirement for the LTSS Trust Commission to begin reporting on certain aspects of program participation is delayed from December 1, 2026 to December 1, 2028.

The WA Cares Fund website is being updated to reflect these changes. Employers can join the WA Cares Fund mailing list to receive notifications as more information becomes available.

Background

Washington state legislation (HB 1087) established the state-run long-term care insurance program under the WA Cares Fund. Under the program, employees pay a premium of not greater than 0.58% through payroll deduction; there is no employer contribution. Self-employed individuals may also elect to participate.

Employees who attested to having purchased long-term care insurance before November 1, 2021, could apply to the ESD by December 31, 2022, to be exempt from the program. An employee who received an exemption was permanently ineligible from participating. Under HB 1733, the ESD will begin accepting and approving applications for exemption starting January 1, 2023.

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. (See EY Tax Alert 2019-1532.)

———————————————

———————————————
ATTACHMENT

EY Payroll News Flash