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
|
Vertical Divider
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. |
Vertical Divider
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 (or continued the coverage within a year after leaving the 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 full 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.
- Permanent partial vesting: If born prior to 1/1/1968 you will be able to accrue 1/10th of the full benefit for every year that you pay into the WA Cares program for at least 500 hours of work. For example, if you pay in for 2 years and then retire, you would be eligible for 20% of the $36,500 full benefit. This would be $7,300.
- 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?
There are a few categories of Washington workers who can opt out of the WA Cares program, which means you would not need to pay the payroll tax and you would not be eligible for the WA Cares benefits. If you apply to opt out and are approved, the Employment Security Department would send you an approval letter; you need to provide your employer with that letter in order for them to stop any WA Cares payroll tax from being debited from your paychecks.
There are a few categories of Washington workers who can opt out of the WA Cares program, which means you would not need to pay the payroll tax and you would not be eligible for the WA Cares benefits. If you apply to opt out and are approved, the Employment Security Department would send you an approval letter; you need to provide your employer with that letter in order for them to stop any WA Cares payroll tax from being debited from your paychecks.
- If you have qualified long-term care insurance: You need to have purchased qualified long-term coverage by 10/31/2021. Then you need to apply for a waiver by 12/31/2022. There will only be this one opt-out window for those with long-term care insurance.
- If you fall under one of the following categories: You can apply for a WA Cares waiver. The state is working on getting their online system updated to allow you to opt-out, and this will be available starting on 1/1/2023. These categories of exemptions provide a temporary waiver, and you must notify the state within 90 days of no longer qualifying (or you will pay retroactive WA Cares premiums plus interest).
- Washington workers who are not residents of Washington
- Those who are on certain temporary nonresident visas
- Veterans with military disabilities, under certain circumstances
- Spouses and domestic partners of active-duty military
- Washington workers who are not residents of Washington