UPDATE – 12/21/2021
Just over a week ago we sent you an update regarding the Washington Long-Term Care Tax, also called the Washington Cares Fund (the “Fund”), which was set to go into effect on January 1st. The Fund is a program that provides long-term care benefits to eligible employees from a trust fund into which employees pay. Well, on Friday, Governor Inslee and legislative leaders decided to delay implementation of the law so that the legislature could make some refinements during the next legislative session. The legislature is, consequently, delaying the premium assessment and is encouraging employers to delay premium collections from employees, thereby giving the legislature time to pass refinements that will extend the implementation dates into sometime later in 2022. Stay tuned for more information on specifics as they become available.
As you are likely aware, the Washington Long-Term Care Tax, also called the Washington Cares Fund (the “Fund”), is set to go into effect on January 1st. The Fund is a program that provides long-term care benefits to eligible employees from a trust fund that employees pay into. This email will provide you with some helpful information regarding the Fund.
First, the Fund imposes a payroll tax on workers of $0.58 for every $100 of their gross wages. Employers are then required to withhold the tax and contribute the money to a trust to fund the long-term care benefits. That payroll tax commences on January 1, 2022. Then, eligible Washington residents who require long-term care will be able to receive up to $100 per day (with a $36,500 maximum lifetime benefit) to pay for certain items. To be eligible, a worker must pay into the trust for either at least 10 years (with no more than a five-year interruption) or for three of the last six years before they can apply for benefits.
But, workers can obtain an exemption from the tax under certain circumstances. If a worker already has long-term care coverage, either through their own individual policy or a group policy, and they obtained that coverage before November 1, 2021, then they can apply for an exemption. The deadline to apply for an exemption is December 31, 2022.
If you qualify and are interested in applying for an exemption, you can apply for an exemption on the Employment Security Department’s (“ESD”) website (https://wacaresfund.wa.gov/wp-content/uploads/2021/10/Instructions-Apply-for-an-Exemption.pdf). ESD will review your application and notify you via letter if you’re eligible. You should then provide that letter to your supervisor, who will then provide the letter to your company’s RMI payroll manager for processing.