Funded by workers’ contributions into a trust fund, Washington state’s WA Cares Fund is the first of its kind in the nation to provide a public long-term care policy for state residents, to protect them against the financial and social risks of needing LTC care and to protect the state against the economic risks of the LTC challenge. Here’s what employers should know.
The WA Cares Fund Timeline
Facing an economic and social challenge of an aging population, in 2019, the governor of Washington signed the Long-Term Services and Supports Trust Act (LTSS), known as the “WA Cares Fund,” into law. LTSS works like Social Security, requiring workers to pay into the trust through their paychecks. The money accumulated into the trust can only be used for LTC benefits, and Washingtonians will receive the benefits when they need them.
July 28, 2019: LTSS Trust Act is signed into law
January 1, 2022: Employee premiums begin
- Washingtonians begin to pay 0.58 percent of wages into the trust through paycheck deductions. For example, for someone making $65,640 (the state’s average salary in 2018), their total yearly contribution to the trust would be $380.71, or $31.73 per month. Employers do not contribute.
- Employers will remit premiums to the Employment Security Department. Look out for video tutorials issued by the state to prepare for reporting. These videos are expected to be released in September 2021.
January 1, 2025: Benefits begin — The first claims for benefits can begin. Eligible Washingtonians will be entitled to up to $36,500 in lifetime LTC benefits, paid in $100 a day.
Who participates?
- All W-2 employees in Washington state must pay into the trust.
- Self-employed independent contractors may opt-in.
- Those under 18 years of age may not participate.
- Individuals who are retired may not pay premiums or receive benefits.
- Providers of this benefit must be on the list of approved providers by the Department of Social and Health Services.
- Individuals who own a private LTC insurance policy may opt out of the program and not pay the premiums. These individuals must apply for an exemption between October 1, 2021 and December 31, 2022. Once opted out, they may never opt back in, even if they change employers.
Who is eligible for the WA Cares Fund?
To qualify, beneficiaries must be residents of Washington state, and either:
- Have worked a minimum of 500 hours per year, paid premiums for at least 10 years, and not have moved out of the state for five or more years, or
- Have paid premiums for three out of six years
What are the WA Cares Fund benefits?
Beneficiaries will need assistance with a minimum of 3 out of 10 activities of daily living (consisting of medication management, personal hygiene, eating, toileting, transferring, body care, bathing, ambulation/mobility, dressing, and cognitive impairment).
Benefits can be used for a wide range of services, including:
- Professional in-home care
- Nursing home stays and other long-term care
- Adaptive equipment and assistive technology
- Home accessibility modifications
- Support for family members who are providing care
- Home-delivered meals
- Rides to the doctor
Benefits are not portable or payable if the individual resides outside of the state when the person needs benefits.
Next steps for employers
Weighing the private vs. public LTC options for employees
If an employee opts out because they have their own LTC policy (whether individually or through a group plan), it’s the employee’s responsibility to inform the employer. Employers must not deduct wages from these employees.
If you already provide a private LTC benefit that is equal to or greater than the WA Cares Fund, you can continue to do so. And it may be more beneficial for your employees if you do so. Here’s why.
Group LTC plans:
- Can provide higher benefits at a lower employee contribution
- Have less stringent eligibility requirements.
- Are portable.
Keep in mind, not all of your employees may be eligible for the public LTC benefits, whether because they don’t meet the contribution requirements or if they plan on retiring outside of Washington state. For those employees, it may be more beneficial for them to opt-out of the Washington Cares Fund and choose a more desirable plan that you can offer.
If you offer a private LTC plan to your employees, help them understand their options so they can make the best choice for them. Remember, they have from October 1, 2021 and December 31, 2022 to decide. If you plan on providing a private LTC option, make sure you optimize it by September 2021 so that you can give your employees an accurate comparison and enough time to make their decision.
Background
Look twenty years into Washington’s future, and you will see a 176 percent growth of individuals needing long-term care compared to 2019. In fact, by 2040, seven out of ten Washingtonians will need long-term care, but only about 14 percent of the population will be in its caregiving years to potentially provide that care. Additionally, only about fifty percent of those needing LTC will have a retirement or pension to be able to help pay for it.
With a shortage of family caregivers and a lack of personal savings, the state created this trust to help shoulder the economic and social challenge of taking care of its aging population. Facing this challenge, in 2019, the governor of Washington signed the Long-Term Services and Supports Trust Act (LTSS) into law.
The law is estimated to save taxpayers about $3.7 billion by 2052.
More Information
Resources for Employers:
Washington Care Fund’s Employer Toolkit
More Information: