Bruce Beckett | Actuarial studies add uncertainty to Washington’s long-term care program
In 2019, the Legislature passed HB 1087 authorizing a Long-Term Care Program (LTCP) funded by a 0.58% tax (called "premiums") on employee earnings. The payroll tax funds the
Under the original legislation, workers had the ability to opt-out of the program, and payroll tax, at any time. In 2021, however, the law was amended to require all workers to contribute into the program unless they could show proof of private long term care insurance by
The 0.58% payroll tax was scheduled to take effect on
Individual employees and unions raised concerns about the overlap with employer-provided insurance options and the amount of tax being withheld to fund the program. In response, the Legislature swiftly adopted legislation delaying the program, and payroll tax, until
One issue is whether the program will maintain solvency. Under current law, the payroll tax cannot exceed 0.58% and must be set at the "lowest amount necessary to maintain solvency." Recently, the
A state-sponsored study in 2020 estimated that the 0.58% rate "will not be high enough to maintain solvency" and estimated the tax rate would need to be increased to 0.66% to maintain solvency.
With the delay and changes made by the Legislature in 2022, it is now estimated that the payroll tax rate will need to increase by 0.03%-0.06% to maintain solvency. To add more confusion, under current law, if the Legislature determines the payroll tax must be increased, the Legislature must notify taxpayers and describe how premiums will be restored to 0.58%.
If the Legislature fails to modify and reform the program in the 2023 session, then the program, and payroll tax, will take effect "as is" in
Sen. Ron Johnson calls for subjecting Medicare and Social Security to annual budget talks
'True cost of aging' index shows many seniors can't afford basic necessities
Health/Employee Benefits News
Life Insurance News