Washington’s New LTC Plan Begins In January — Here’s What To Know

A mandatory payroll tax to fund Washington state's new long-term-care program will start coming out of most workers' paychecks across the state in January.

The insurance benefit, dubbed the WA Cares Fund, is a first-in-nation public insurance program aimed at helping older residents age in their own homes.

The plan, signed into law in 2019 through the Long Term Care Trust Act, will use a 0.58% payroll tax to pay up to a $36,500 benefit for individuals to pay for home health care and an array of services related to long-term health care including equipment, transportation and meal assistance.

The plan is expected to save $3.9 billion in state Medicaid costs by 2052 and eligible beneficiaries will be able to begin collecting benefits starting in 2025.

The program has drawn both ire and praise from advocacy groups and politicians. Advocates cite a rapidly aging population and high premiums on the current private long-term-care market, while critics have lambasted the plan as expensive, unnecessary and inflexible in terms of eligibility and payout.

Here's what to know about WA Cares.

When will the deduction begin?

The new deduction begins on Jan. 1, 2022 and will appear on the first paycheck received in 2022. Workers will initially pay 58 cents for every $100 earned.

The benefit won't become available for eligible qualified people until Jan. 1, 2025.

Is this mandatory for everyone?

The fund applies to anyone who works for a business in Washington, with some exemptions, like federal workers. Those who are self-employed won't be automatically enrolled, but can opt in to have funds withdrawn for a long-term-care account.

People can apply for an exemption if they can demonstrate they have other long-term care insurance purchased by Nov. 1. The window to apply is Oct. 1 through Dec. 31.

To apply, visit: www.wacaresfund.wa.gov/apply-for-an-exemption/

For now, there is no other opportunity to opt out of the program. Once someone opts out, they are permanently excluded from coverage and benefits even if the private insurance carrier cancels their policy.

Who will be eligible for benefits?

To earn benefits, an individual must have worked and contributed to the fund for at least 10 years, without a break of five or more years, or three years in the past six years at the time they apply for benefits with at least 500 hours worked annually during those years.

People who meet those criteria may access benefits starting in 2025 if the Department of Social and Health Services determines they require assistance for at least three activities of daily living.

The Washington Department of Social and Health Services estimates 15,000 people will seek the benefit in 2025, growing to 97,000 by 2050.

The fund will not be available for federal government employees including active-duty military personnel unless that military department is considered a Washington state employer.

What can the fund be used for?

The list of approved services and supports is broad ranging and includes:

* Adult day services

* In-home care

* Assisted living and nursing home services

* Care transition coordination

* Dementia care

* Adaptive equipment

* Home safety evaluations

* Transportation

* Home-delivered meals

* Education

* Respite for family caregivers

These services must be approved and registered through the Department of Social and Health Services. Family members who provide care do not need to become certified as a home care aide but must receive 15 hours of basic training and six hours of training based on the person's needs.

There is no option to cash out the contributions made if benefits are not used.

What if I move or am retiring soon?

Currently, the funds can only be used in Washington. People who move out of state can't take the benefit with them, and those who currently live out of state but work for companies in the state won't get the benefit.

People who retire before they meet the required number of years contributing to the fund won't receive the benefit.

These points have been raised by critics of the program, some who have also said the $36,500 lifetime limit may not be enough.

Last month, a group of 23 Washington senators — all but two being Republicans — penned a letter to Gov. Jay Inslee, urging him to use his emergency powers to suspend the law.

How and why did this plan come about?

In 2015, state lawmakers set out to study whether it would be possible to make long-term care more affordable either through a public program funded through a payroll deduction or through shoring up the private long-term care insurance market.

The number of people 65 and older in the U.S. is projected to nearly double by 2050, with at least half requiring some form of long-term assistance with every day activities like bathing, eating or moving around.

Seven of 10 Washington resident over the age of 65 is expected to need long-term care, according to the Washington Cares Fund. However, advocates of the plan say there are few affordable options when it comes to home and community-based care.

Medicare does not cover long-term care and the average premium for private long-term-care insurance can be as much as $3,000 a year. Medicaid can cover some home and community-based care though the program has strict eligibility requirements and a long waiting list for at-home services.

Got questions about the WA Cares Fund? Contact reporter Amanda Zhou at [email protected].

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