In 2019 the Washington State Legislature passed the Long-Term Services and Supports Trust Act and Governor Inslee signed the bill into law. The law created the WA Cares Fund, a fund that provides insurance benefits to eligible Washington state residents to help them cover the costs of long-term care. The purpose of the fund is to lessen the financial burden of long-term care.
Starting July 1, 2023, Washington employees will begin contributing to the WA Cares Fund. Employees will pay a premium of 0.58% of their gross wages with no cap on contributions. There is no required employer contribution, though employers have the option of paying the required premium on behalf of their Washington employees.
Beginning July 2026, the WA Cares Fund will start providing benefits to eligible Washington state residents. Eligible employees will have access to a maximum of $36,500 in long-term care insurance benefits over their lifetime, subject to annual inflation adjustments.
Employer Responsibilities
With contributions set to begin July 1, 2023, organizations with Washington state employees would be well served to review their requirements under the law. While employers are not required to make contributions, they are required to withhold employees’ premiums from their pay and must transmit those premiums quarterly.
Employers should also be aware that employees are able to apply for exemptions from the WA Cares Fund. Employees exempt from the WA Cares Fund will not contribute to the fund and employers will not withhold contributions for those individuals. Exempt employees are required to provide their employer with a copy of their exemption approval letter. Employers must retain a copy of that letter and should not withhold WA Cares Fund premiums for exempt employees.
Key Takeaway
Organizations who employ individuals who work in the State of Washington should be prepared to start collecting WA Cares premiums from non-exempt employees on July 1, 2023. Those looking for more information should reference the Washington Cares website which is run by the Washington State Department of Social and Health Services.
The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.
