Changes to Long-Term Services and Supports Trust Program
Washington state has recently amended its Long-Term Services and Supports Trust Program, which is designed to help Washington residents pay for long-term care and other services, including assisted living. The program will be funded through payroll taxes paid by employees, not employers. Washington residents can start receiving benefits under this program on January 1, 2025. This certainly will open up additional funds to cover assisted living services. The Program is also expected to incentivize the purchase of private long-term care insurance, which may offer more benefits than the public option and enable employees to opt out of the state program.
RALNA members in Washington will want to understand the potential benefits provided to existing and prospective residents, as well as the payroll taxes employees will pay to fund the Program.
Under the Act, eligible residents are entitled to a benefit of up to $100 per day, with a maximum lifetime limit of $36,500 (adjusted for inflation). This benefit can be used to pay for assisted living and nursing home services, as well adult day services and memory care. Benefits can also be used for in-home care, home-delivered meals, transportation, adaptive equipment, and other support.
The program is funded through a premium assessment (i.e. tax) on employee wages beginning on January 1, 2022. Currently, the tax is set at 0.58% of compensation (includes wages and other remuneration including bonuses, paid time off, and housing). This means that for every $100 an employee makes in 2022, they will pay $0.58.
Benefits will be available to qualified individuals starting January 1, 2025. To qualify for benefits, one must meet the following criteria:
- Washington resident over the age of 18
- Need assistance with at least three activities of daily living (such as medication management, personal hygiene, eating, toileting, cognitive functioning, body care, bathing, mobility, dressing, etc.)
- Have paid premiums
- for a total of 10 years, without interruption for 5 or more consecutive years AND worked at least 500 hours during each of the 10 years; or
- for 3 years within the last 6 years from the date of application of benefits AND worked at least 500 hours during each of the 3 years
- Not be an exempt employee
Employees can apply for an exemption if the employee has long-term care insurance purchased before November 1, 2021. Once an employee receives an exemption, they can never become a qualified individual or an eligible beneficiary and they will be permanently ineligible for coverage under the Program. Exemption applications must be submitted to the Employment Security Department (ESD) from October 1, 2021, through December 31, 2022.
Figure 1: Timeline from the Washington Employment Security Department (ESD).
What you need to know as an employer
This program is funded solely by employees. There is no employer contribution. However, beginning January 1, 2022, the employer will collect the premiums from employees and remit the payments to the Employment Security Department. The first remittance is due on April 30, 2022.
If an employee decides to opt out of the program, they must notify the employer and provide a copy of their exemption approval letter. Once notified, the employer must not deduct premiums for the exempted employee.
If an employer already provides long-term care insurance for employees, the employer may still continue to do so. It will be the employee’s responsibility to decide whether to apply for an exemption. An employer cannot apply for an exemption on behalf of an employee. It is important to note that:
- If an exempted employee does not notify their employer of the exemption and the employer continues to take payroll deductions, the employee will not be entitled to any refund of payroll deductions taken before the employer is notified.
- If an employer takes payroll deductions after being notified, employers are solely responsible for refunding those amounts to the exempted employee and will not be entitled to a refund from ESD.
Currently, there is no requirement to inform employees about the Program. However, employers may want to do so and the state provides resources to help (see below). Guidelines are also changing, so notice may be required in the future.
More information can be found on the WA Cares Program website, including