Pennsylvania Long Term Care Trust Act

by | Sep 5, 2022

Pennsylvania Long Term Care Trust Act

Otherwise known as HB2779 enacts the “Pennsylvania Long Term Care Trust Act” and establishes the Pennsylvania Long Term Care Trust Program.

This bill will establish the Pennsylvania Long Term Care Trust Program to provide long-term care benefits for eligible residents. Pennsylvania residents who have paid the required payroll tax withholdings and are in need of assistance with at least three activities of daily living (ADLs) as determined by the department of health will be eligible for the program benefit of $36,500.

Why the Pennsylvania Long Term Care Trust Act?

To implement a new way of supporting the costs of long term care by creating a public benefit available to all Pennsylvania workers for long term care services and supports, financed by a small payroll withholding tax.

How much will the tax be?

According to the text of the proposed Pennsylvania Long Term Care Trust Act, “The Department of Revenue shall assess for each individual in employment with an employer a premium based on the amount of the individual’s wages. The initial premium rate shall be 0.58% of the individual’s wages.” Depending on your age and gender, you could purchase a private long term care insurance policy for about what you’d pay for the Pennsylvania state program.

Total Earnings Proposed LTC Payroll Deduction
 $    50,000  $         290
 $    75,000  $         435
 $  100,000  $         580
 $  125,000  $         725
 $  150,000  $         870

When will the tax start?

As of the date of this writing, the bill states that the payroll deduction will begin on January 1, 2023.

When would I be eligible to receive benefits?

Approved services shall be available after January 1, 2026. The bill states, “The Department of Revenue shall deem an individual to be a qualified individual as provided under this act if the individual has paid the long-term services and supports premiums required under section 9 for the equivalent of either:
(1) a total of 10 years without interruption of 5 or more consecutive years; or
(2) three years within the last six years.
(b) Requirements.–When deeming an individual to be a qualified individual, the Department of Revenue shall require that the individual have worked at least 500 hours during each of the 10 years in subsection (a)(1) and each of the 3 years in subsection (a)(2).

How can I be exempt from the Pennsylvania Long Term Care Trust Act?

According to the bill, in order to be exempt from the Pennsylvania Long Term Care Trust Act, “An employee who demonstrates that the employee has long-term care insurance is exempt from the premium assessment under this section.”

The bill summary explains the Pennsylvania Long Term Care Trust Act this way:
The “Long Term Care Trust Act will establish a fund to provide up to $36,500 in lifetime benefits (indexed to inflation) to eligible beneficiaries for long-term care services. That may include respite care, in-home caregiving, time in a nursing home or assisted living facility, home modifications like constructing a wheelchair ramp, and other elderly care expenses.”

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