Washington’s Long-Term Care Act

At a glance:  

Starting January 1, 2022, a new payroll tax to fund the Washington State Long-Term Care Trust goes into effect.   It creates a long term care insurance benefit for certain qualified individuals.

How much does it cost?

The tax is $.58/$100 of wages, which employers are required to collect through payroll deductions.  For example, an employee with $75,000 in annual wages would pay $435 to fund the program.

What benefits does it provide?

Employees paying into the fund will be eligible to access $100 per day, to a maximum of $36,500 (adjusted for inflation) to pay for Long-Term care assistance beginning in 2025.

The fund can be used to pay for expenses associated with needing assistance with activities of daily living (“ADLs”).

Who receives the benefit?  

A qualified individual must:

• Reside in Washington when they need to use the benefit.
• Be unable to do 3 of 10 ADLs. Examples of ADLs are dressing, bathing, cognitive impairment, and other basic functions of an individual’s daily routine.
• Work & pay into the fund for 10 years, or 3 of the last 6 years AND have worked at least 500 hours each year
• Be at least 18 years old

Exemption option:

There is a one-time option for employees who have other Long-Term Care insurance, that is equal to or better than the state plan to opt out. In order to opt out employees must have a qualified Long-Term Care plan in place by November 1, 2021.

For more information please visit Washington State’s Department of Social and Health Services website.

For questions, please contact any member of Ryan Swanson’s Employment Rights, Benefits & Labor group.

AUTHOR
Hana A. Kern
Of Counsel