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Compliance Reminder: Payroll Contributions for Washington Long-Term Care Act Begin on July 1, 2023

Employers with Washington-based employees will need to start collecting payroll contributions for the Washington Cares Fund on July 1, 2023.

As a reminder, on January 27, 2022, Washington Governor Jay Inslee signed two separate bills delaying the implementation of the fund, which is intended to provide a long-term care benefit for Washington workers.

The fund requires employers with Washington employees to collect a payroll deduction of 0.58 percent. These collections will help fund long-term care costs for participants.

Under the original bill, participants would have been able to begin receiving benefits from the fund beginning in 2025; however, because of the delay, participants will not be able to receive any benefits until July 1, 2026.

The bills signed by Governor Inslee in January of last year also adjusted the vesting requirements for older workers and added new exemptions. Previously, there was a ten-year vesting requirement in order for participants to receive benefits.

Now, workers born before January 1, 1968 that have not met the vesting period may still be eligible for a reduced benefit. Benefit eligibility requires that the employee pay premiums for at least one year. The employee will then be eligible to receive benefits based on the number of years they paid into the fund.

Additionally, the bills created new exemptions to the collections, but potentially exempt employees will still be required to apply for an exemption. The new exemptions are for:

  • United States military veterans rated by the Department of Veteran Affairs as having a service-connected disability of at least 70 percent;
  • Spouses or registered domestic partners of United States armed forces active-duty service members;
  • Workers working under a non-immigrant visa for temporary workers; and
  • Workers that are employed by a Washington employer but have a permanent address and primary residence out of state.

The only previous opt-out for employees required them to obtain a qualified long-term care policy before November 1, 2021, and then apply for an exemption. Neither of the new bills allow for an extension on this deadline.

Washington employers are encouraged to start preparing now for the implementation of this law. If you have questions about how this could impact your organization, contact your OneDigital consultant or learn about our compliance consulting practice here.

The long-term care of dependents is becoming an increasingly important issue for employers and employees alike. For more about this topic, check out this blog: Revolt of the Caregivers - Why So Many Parents Have Quit Their Jobs and How To Win Them Back.