Published on June 17, 2021; Updated September 24, 2021
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 questions, please contact any member of Ryan Swanson’s Employment Rights, Benefits & Labor group.
