Read More

Washington Delays Implementation of Long-Term Care Act to 2023

On January 27, 2022, Washington Governor Jay Inslee signed two separate bills delaying the implementation of the Washington Cares Fund, intended to provide a long-term care benefit for Washington workers.

Initially set to begin on January 1, 2022, the fund would require employers with Washington employees to collect a payroll deduction of 0.58 percent. Those funds would then help fund long-term care costs beginning in 2025.

The bills delayed the start of the payroll tax to July 1, 2023. Because of the delay, participants will not be able to receive any benefits until July 1, 2026. If any employers began collecting premiums, they need to be refunded to the employee within 120 days of the day the premiums were collected.

The bills 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 can still receive some benefits. Benefit eligibility requires that the employee pay premiums for at least one year. They will then be eligible to receive benefits based on the number of years they paid into the fund.

Additionally, new exemptions were created, 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; or
  • 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. Both new bills do not allow for an extension.

While changes have been made, the law still faces legal challenges. In November, a class action lawsuit was filed against the Act; challenging the Act is unenforceable on the grounds it violates ERISA and federal and state laws governing employee benefit plans. See Pacific Bells LLC et al v. Inslee et al, No 2:21-cv-01515, (W. Dist. WA). Nov. 9, 2021. The class action lawsuit is expected to continue despite the delay in enforcement.

Employers are still encouraged to continue to prepare for implementation. If you have questions, contact your OneDigital consultant.

Never miss an update – bookmark OneDigital’s Compliance Confidence blog for the latest developments on employer compliance. For more information, please reach out to your OneDigital consultant.