Funding the Benefit: Starting January 2022, a .58% payroll tax will be collected from all Washington state employees and placed into the LTSS Trust to fund future benefits. There is no identified salary cap on which the deduction will be taken.
Eligibility for the Benefit: To qualify for this benefit, individuals must have worked and contributed to the Trust for a specific period of time, need assistance with at least three daily living activities, be at least 18, and a resident of the state of Washington.
Alternative Private LTC Coverage: Visit Private LTC Insurance for eligible private LTC providers in Washington.
Exemption from Paying the Deduction: If you have a private LTC policy, you can request an exemption from the LTC deduction. Exercising an exemption will prevent you from being eligible for the state’s LTC benefit. An application for exemption can be submitted October 1, 2021 through December 31, 2022; the alternative coverage must have been in place by November 1, 2021. Those who apply and are approved for the exemption will not be able to opt back into the program at a future time.
If you receive an approved exemption, send your exemption letter to firstname.lastname@example.org.
LTC Benefit: Starting as early as January 2025, a lifetime $36,500 benefit will be available to address a wide range of long-term services and support.
Frequently Asked Questions
If I apply and am approved for the exemption from paying the tax, will I be required to provide ongoing proof of primary LTC coverage?
Unknown at this time, as rules for the program are currently under development. Please revisit this site for updates.
My exemption request was approved. What do I do now?
Send a copy of your exemption approval letter to email@example.com. This will notify Payroll to not collect the LTC tax from your pay.
I live out of the state of Washington. Can I assume that if I have paid into the program as outlined, I will be eligible to apply for a future benefit?
No, the current program requirements state that only those who reside in the state of Washington will be eligible for a benefit.
If I apply for private LTC coverage after November, 2021, will I be able to apply for the exemption?
Alternative LTC coverage must have been in place by November 1, 2021. Coverages with effective dates after October 31, 2021 do not satisfy the exemption requirement.
Do I need to purchase private insurance from one of the listed approved providers? Do you have links for approved providers in states other than Washington?
Unknown at this time, as rules for the program are currently under development. Updates will be posted here as new information is made available. We do not have links for approved providers in other states at this time.
I do not live in Washington State, do I have to pay this tax?
Yes, at this time the legislation and all provided information states that everyone who works in Washington State will pay the tax.
How do I apply for the exemption?
Instructions to submit an exemption can be found on the WA Cares Fund Private Insurance page.
Does WSU have a LTC insurance plan I can purchase?
I have Long Term Disability (LTD) Insurance through WSU, will this coverage allow me to be exempt from the LTC tax?
No. LTD is a wage insurance plan that will ensure a certain level of monthly income if you are on an approved LTD claim due to being medically unable to work. LTC provides a benefit to cover services and assistance to address various activities of daily living.
I will be retiring or moving out of Washington prior to meeting the 3 or 10 year period required to pay into the plan before benefits may be received. Do I have to pay into the program?
Yes, at this time there is no provision to be exempted from paying the tax due to a known short-term employment period.
Will first time employees hired in the state of Washington after November 1, 2021 be offered the option to apply for an exemption?
New employees in the state of Washington will be automatically enrolled into the WA Cares Fund. The exemption in statue is not a permanent right to opt out, it is a one-time grandfathering of coverage in place prior to implementation. The WA Cares Fund is designed to have universal participation going forward.
Many of the companies listed on the Insurance Commissioner’s site are stating they will not be able to guarantee they can meet the October 31 deadline to have a private LTC policy in place. Will there be special consideration or extensions granted to employees who attempted to secure alternative coverage but are unable to do so by October 31 due to demand?
The deadline to have alternative coverage in place is October 31, 2021. This is in alignment with the statue which does not allow for an extension.
Will I pay taxes on future LTC benefit payouts?
No, future LTC benefit payouts will be non-taxable. LTC premiums are collected from your pay post-tax, so taxes will not be collected from future payouts.
What recourse do out-of-state employees who will not be eligible for future benefits have? Is WSU communicating to the state on behalf of out-of-state employees?
Employees are encouraged to voice their concerns with the WA Cares Fund. WSU has communicated to the overseeing commission that we have numerous employees who reside in border states who, as the current legislation states, will be required to pay the tax but will not be eligible to receive future benefits.
How are the years of service calculated for future benefit eligibility?
- If an employee has at least ten years of paying the tax starting January 1, 2022, with no more than a five year break in Washington state employment, they will be considered to be permanently vested/eligible for future benefits.
- If at the time of applying for a benefit an employee has paid in for at least three of the previous six years, they will meet the temporary vesting/eligibility criteria and be eligible for a benefit.
I already know I won’t have ten years of paying the tax to be permanently eligible for a future benefit. Is there anything I can do to help ensure I will be able to draw a benefit in the future?
If you work at least 500 hours in a calendar year for a Washington state employer, you will earn one eligible year. This equates to as little as about 10 hours per week for a full calendar year, or 40 hours per week for just under three months. You do not need to work a full time schedule for a full year to earn one year of eligibility.
Is my spouse eligible for this benefit if they do not work in the state of Washington?
At this time the benefit appears to only be available to individuals who have paid the tax for the allotted period of time to establish eligibility.
Questions? Contact WA Cares Fund