ABOUT THE STATE’S LONG-TERM CARE PROGRAM
Washington is the first State in the Nation to legislate Long-Term Care benefits paid for by employees through a payroll tax, with benefits that will be administered by the State. Most individuals do not understand that Medicare pays for very little long-term care, while Medicaid requires a person to spend down their life savings before providing these benefits. The State’s new Long-Term Care Trust aims to fill the gap.
What is long-term care?
It is estimated that at some point, 70% of us will need long-term care. This could be care in a facility (such as a nursing home, assisted living, or adult family home) or care at home. Home care services include:
It is estimated that at some point, 70% of us will need long-term care. This could be care in a facility (such as a nursing home, assisted living, or adult family home) or care at home. Home care services include:
- home therapy
- adult daycare
- home modifications, such as widening doors for a wheelchair
- assistive technology, like pill-dispensing machines or blood pressure monitors
- meal delivery services
- transportation to doctor visits
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What is the payroll tax?
The tax is 0.58% of payroll. For every $10,000 in wages you earn, you will pay $58 to the state annually toward this program. The tax will apply to your base salary as well as other earnings such as commissions, bonuses, and overtime. Tips will not be taxed. |
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What are the benefits?
Once you qualify for benefits, you would be eligible for up to $36,500 per lifetime in covered long-term care services. At today’s cost of care, this would cover an average of 1 ½ years of home care, or about ½ year of in-facility care. |
How will I qualify?
When you need to use these long-term care services, you must be a resident of Washington State, you’ll need to be “vested” in the program, and you’ll need to have a loss of three of ten listed “activities of daily living”. Activities of daily living are skills required to manage your basic physical needs, including personal hygiene, dressing, bathing, etc. |
When will I be “vested” in the program?
There are two vesting schedules, providing two different ways you can qualify for benefits. You will need to work at least 500 hours in a year for that year to count toward your benefits “vesting”.
There are two vesting schedules, providing two different ways you can qualify for benefits. You will need to work at least 500 hours in a year for that year to count toward your benefits “vesting”.
- Permanent vesting: Once you have paid into the program for at least 10 years, without more than a 5-year consecutive break in paying into the program, you would be permanently “vested”. Note that even when you become permanently vested, you will continue to pay the program's payroll tax until you are no longer earning W-2 wages.
- Temporary vesting: If you need benefits before becoming permanently vested, the state will look back 6 years from the date you apply for benefits. If you have paid in for at least 3 of those 6 years, you would be eligible for benefits.
How can I opt out of this state program?
To opt out, you need to purchase qualified long-term coverage by 10/31/2021 (if you do not already have qualified long-term care coverage). Then you will need to apply for a waiver by 12/31/2022. There will only be this one opt-out window.
To opt out, you need to purchase qualified long-term coverage by 10/31/2021 (if you do not already have qualified long-term care coverage). Then you will need to apply for a waiver by 12/31/2022. There will only be this one opt-out window.