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Washington Long-Term Care Insurance Tax

February 4, 2022

Overview

On January 27, 2022, Governor Jay Inslee signed two bills that delay implementation of the Washington Cares Act to July 1, 2023, including the 0.58% payroll tax, and provide additional exemptions from the program. The Act provides a long-term care benefit for Washington residents who pay into a long-term care fund as employees in the state via the payroll tax. Since passage of the Act, numerous issues and concerns related to the Act’s provisions and long-term viability have been raised, including the voluntary exemption for employees who were covered by a private long-term care insurance policy prior to November 1, 2021, that led to over 450,000 people applying to opt out of the program. 

The recently signed legislation directs employers who have already collected the payroll tax to refund it to their employees within 120 days. It also addresses some of the concerns by creating voluntary exemptions for individuals who are unlikely to receive benefits from the program to opt out permanently, including employees who reside in another state and military spouses. Legislative leaders have stated the purpose of the delay in implementation is to allow the Long Term Care Commission, previously appointed by the Legislature, to study the concerns and make recommendations to the Legislature on how the Act should be amended. The Legislature would then look to pass new legislation during its 2023 session to address the concerns.

This article summarizes aspects of the law and does not constitute legal advice. For legal advice for your situation, you should contact an attorney.

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