State Puts WA Cares on Hold for Now

The state’s long term care insurance program, referred to as WA Cares, has been paused for 18 months.  Local governments were to begin collection of WA Cares insurance premiums from their employees starting on January 1, 2022, but that process is now delayed until July 1, 2023. In addition, benefits under the program will be available on July 1, 2026, rather than January 1, 2025.

This blog will detail the reason for the pause and the steps local government employers should take at this time.

Background

The first of its kind in the nation, the WA Cares program was adopted during the 2021 legislative session. Its purpose is to provide affordable long-term care insurance for those who require long-term care services and who have paid premiums into the account for a set number of years.

The mandatory program is self-funded entirely by employee contributions collected by the employer. (Note that employees can opt out of the program by purchasing an alternative qualifying plan.) Local government employers were to begin collecting premiums from employees starting January 1, 2022 (in the amount of $0.58 per $100 of earnings). Total program benefits for individuals are capped at $36,500 (adjusted annually for inflation).

Pause in Implementation

On January 27, 2022, Governor Jay Inslee signed into law SHB 1732, which pauses implementation of the  WA Cares program as follows:

• Delay premium assessment from January 1, 2022, to July 1, 2023
• Delay availability of benefits from January 1, 2025, to July 1, 2026

SHB 1732 and SHB 1733 (also signed by the governor on January 27, 2022) modify the WA Cares program to allow additional individuals to opt out, including disabled veterans, military spouses, non-immigrant temporary workers, and those who work in Washington but live in a different state (e.g., Idaho, Oregon).  The law has also been changed to allow those born before 1968 (and who are closer to retirement) to receive partial benefits. These individuals were not previously eligible because they did not have enough working years left to be vested in WA Cares. The pause in the program’s implementation allows sufficient time for the additional individuals to opt out of WA Cares by finding comparable qualifying long-term care plans, and for the state to assess the program’s long-term solvency.  

What Should Local Governments Do?

If a local government employer collected premiums from their employees, that agency must refund these premiums to employees within 120 days of premium collection and stop future collection until July 1, 2023. If employee premiums were already remitted to the Employment Securities Department (ESD), ESD must refund the employer, who must in turn refund their employees.

Under the newly adopted timeline in SHB 1732, employers will not need to begin payroll deductions again until July 2023. Even before then, however, the Washington State Legislature is expected to make other adjustments to the program. We will keep an eye out for additional changes and update this blog accordingly.

Additional Resources

WA Cares Fund has additional information on the program, including an overview of the program’s pause, and information on how employers should proceed at this time.