Washington Long-Term Care Trust Act Still Law
The Washington Long-Term Care Trust Act (otherwise known as WA Cares) is still an active and enforceable law.
WA Cares was first signed into law in 2019 in hopes to stem the rising tide of future long-term care costs in the state of Washington. With Medicaid being the single largest payer of long-term care costs nationwide, and each state administering the Medicaid program, Washington state was the first in the United States to pass legislation to help offset the Medicaid budget.
WA Cares Program Benefits
- $36,500 in long-term care benefits (payable in $100 units), which helps to pay for the cost of assistance
- Provision for inflation protection, to be enacted by the WA Cares Trust committee voting to increase the amount of benefit available through the program
- Benefits are triggered by needing help with at least three (3) activities of daily living such as medication management, personal hygiene, eating, toileting, cognitive functioning, transfer assistance, bed mobility, body care, bathing, ambulation/mobility, or dressing
How is the program funded?
- Payroll deduction of .58% of gross income for all wage earners
- Originally set to begin the payroll deduction on January 1, 2022
- 2022 Washington legislative session voted to delay the collection of the payroll deduction until July 1, 2023
There have been many misunderstandings about the changes made to the Washington Long-Term Care Trust Act in the 2022 legislative session.
Up until the law was changed in March 2022, the only workers in Washington who were exempted from the program were those who owned long-term care insurance with an effective date prior to November 1st, 2021. About 450,000 Washingtonians purchased long-term care insurance before November 1st, 2021, and opted out of the program.
With the update of the Washington Long-Term Care Trust Act, about 250,000 MORE workers are able to opt-out of the program IF they fall under one of these four, new categories:
- Anyone who works in Washington but resides in another state
- Spouses of military personnel stationed in the state of Washington
- Disabled veterans, and
- Anyone working in Washington with a temporary visa
The second major change gives a prorated benefit to people born before 1/1/1968 who pay into the program but retire in the next 10 years. For each year someone pays into the program, they will be able to receive 1/10th of the program’s lifetime benefit ($3,650). For example, someone who pays into the program for six years and then retires would be able to qualify for $21,900 of benefits should they ever need long-term care. ($3,650 x 6 = $21,900)
It took almost three years for the state government to put the systems in place to run this program. They are now modifying their systems to handle these two major changes. The biggest delay will be the roughly 250,000 workers in Washington who can now opt out of the program. Those workers are being notified and given the opportunity to opt-out if they choose to.
The Washington Long-Term Care Act is still the law.
If you purchased a long-term care insurance policy prior to November 1, 2021, then you have the golden ticket to remain exempt from the WA Cares Program. Washington state will begin collecting the payroll deduction on July 1, 2023. Washington state will verify if you still qualify to be exempt from the program.
The state lawmakers expected about 95,000 people to opt out of the program. Over 470,000 people have opted out so far. Many lawmakers suspect that tens of thousands of Washingtonians did not really buy long-term care insurance and only “attested” to owning a policy.
That’s why the Trust Commission is recommending:
a) the ESD be authorized to “withdraw approval of an exemption if an individual fails to re-attest and provide adequate proof of LTC insurance when requested“. (pg. 11 of Trust Commission Report)
b) “The withdrawal of an exemption approval should require an individual to participate in the program as required for any other employee in Washington.” (pg. 12 of Trust Commission Report)
In other words, your current exemption letter will only be valid as long as you are able to continue to provide proof of long-term care insurance in the future. Again, that’s why we say you’ve got a golden ticket.
You can read all 8 recommendations from the Trust Commission Report here:
Many people purchased long-term care insurance in 2021 with no thought to designing the best policy. No one had the time to thoroughly explain all the moving parts of a long-term care insurance policy. Most people simply raced to get something in place that would qualify for the exemption.
We’re here to help. We’re committed to helping people plan for long-term care. Let us review your current long-term care insurance policy, to have peace of mind knowing that your long-term care financial needs will be met, and that your future income and assets are protected from Medicaid spend-down rules.