Preparing for the Washington Cares Fund rollout in Washington FAQS AND ANSWERS
As of June 17th, 2021

Washington Cares Fund general questions

Q: How much is the tax withholding amount?

A: 0.58% ($0.58 on every $100). Someone earning $37,000 per year would pay-in about $18 per month. Someone earning $100,000 per year would pay-in about $48 per month.

Q: Can the withholding amount change in the future?

A: There is no guarantee that the withholding amount won’t change in the future. Beginning on 1/1/2024, and biennially thereafter, the withholding amount can be adjusted by the pension funding council.

Q: On what portion of salary is the 0.58% tax calculated?

A: The tax is on all wages paid to an employee, including salary, bonuses, commissions, cash value of stocks (at time of transfer) if part of comp package, gifts and prizes, cash value of goods or services given in place of money, holiday pay, PTO, including vacation leave/sick leave, separation pay, severance, wages in lieu of notice.

Q: How much does one get in benefits?

A: $36,500 payable in $100 benefit units. Benefits will be adjusted/increased based on annual inflation and are projected to increase over time.

Q: Where can one go for official information on the Washington Cares Fund program?

A:The WA state Long-Term Care Services and Support website: https://www.dshs.wa.gov/altsa/stakeholders/long-term-services-and-supports-ltss

The official Washington Cares fund consumer site:

http://wacaresfund.wa.gov

Q: How long does one have to pay the tax to be eligible to trigger benefits?

A: Participant must work and pay the payroll tax for ten years without interruption of 5 or more consecutive years or 3 years within the last 6 years from the date of application to be eligible for benefits.

Q: How does one trigger their benefits with the Washington Cares Fund?

A: An inability to do 3 of 10 activities of daily living (ADLs) is the benefit trigger.

Q: What are the 10 ADLS for the Washington Cares Fund?

A: Bathing, Eating, Dressing, Toileting, Transfer assistance, Personal Hygiene, Body care, Medication management, Ambulation/mobility, Cognitive impairment.

Q: Are benefits portable to other states?

A: No. Participant residents who move out of the state for 5 or more years forfeit both benefits and premiums.

Q: How are 1099 employees treated?

A: 1099 employees can opt-in to the Washington Cares Fund if they wish, including after Nov 1, 2021.

Q: Do all W2 employees pay tax regardless of age? For example, if a 72 year-old is still working and receiving a W-2 does he or she still pay the tax?
A: Yes. If one is generating qualifying income the tax will be withheld regardless of age unless they are exempt or they are self-employed and do not opt-in to the fund.

Q: How is the WA Cares Fund treated in relationship to ERISA?

A: We assume that ERISA does not apply to the WA Cares Fund.

Q: Are retired military now working in the private sector exposed to the tax?

A: We believe they would meet the definition of “Employee” and be subject to the tax as a private sector employee.

Q: Are employees and employers who are parties to a collective bargaining agreement (unions, teachers unions) required to participate in the WA Cares Fund?

A: No, but they may be able to opt-in. The right to opt-in or out appears to belong to the individual rather than the employer/union. Employers with certain collective bargaining agreements in existence since October 19th, 2017 are exempt until their existing collective bargaining agreement expires or is renegotiated. Many union-represented employees won’t start paying WA Cares Fund taxes until their collective bargaining agreements update.

Q: How is the tax handled when one lives in a neighboring state, but works in Washington?

A: People who live in another state but work for a Washington employer will be subject to the WA Cares Fund withholding, but they will not be eligible for benefits unless they are willing to relocate their residency to Washington if they have a long term care need in the future.

Existing LTC policy holder exemption questions

Q: What’s the deadline for consumers to purchase long-term care insurance that can qualify them to apply for the exemption?
A: Qualifying long term care insurance policies purchased before November 1, 2021 create eligibility for one to file for the exemption. An application deadline date for WA LTCi applications for New York Life will be established and communicated later this summer.

Q: After an exemption is granted will policy holders have to prove that they still have a qualifying in-force policy in the future?
A: The WA Employee Security Department recently noted that audit functions related to existing policy holder exemptions are to be “further addressed in future rulemaking.” This suggests that consumers may have to prove policies used to qualify for the exemption are still in-force in the future. As always, applications should only be taken by clients who plan to hold policies for their intended lifespan.

Q: Besides existing LTC policyholders, are there any other groups of employees in WA eligible for exemption?
A: For the most part, No. Union members will be able to opt-in, but not required. Employers with certain collective bargaining agreements in existence since October 19th, 2017 are exempt until their existing collective bargaining agreement expires or is renegotiated. Many union- represented employees won’t start paying WA Cares Fund taxes until their collective bargaining agreements update.

Federal employees appear to be exempt and Federally recognized tribes may elect to participate or opt-out.

Q: Is an approved exemption request permanent? Can someone opt-out and then drop their policy and ask to start paying the tax and enter the Washington Cares Fund?
A: No, an exempt employee cannot subsequently become a qualified individual or eligible beneficiary.

Q: What are the requirements to qualify for the existing policyholder exemption?

A: Be 18 years or older and attest that one has a private long-term care insurance policy as defined in RCW 48.83.020

Q: What New York Life insurance products qualify one to apply for the existing policyholder exemption?
A: Traditional long-term care insurance products like NYL Secure Care and NYL My Care and linked-benefit solutions like Asset Flex qualify. Chronic care riders do not qualify.

Q: Is there a minimum long-term care coverage amount a policy must have to qualify?

A: The policy simply must meet the definition in RCW 48.83.020 of being a qualified long-term care insurance product. All Asset Flex, NYL Secure Care and NYL My Care plans available in WA state qualify.

Q: Do private policies have to include inflation protection to qualify one to apply for the exemption?
A: No

Q: If an application and an initial premium is submitted before the deadline, but the policy is approved after the deadline, will the policy be considered "purchased" before the deadline? 

A: The WA Employee Security Department recently clarified that “employees must have purchased long-term care insurance before November 1, 2021” to apply for the exemption. Agents should allow for sufficient time for policies to be underwritten, delivered and in-force prior to the November 1, 2021 deadline.

Q: Do group long-term care insurance policies qualify one to apply for the Washington Cares Fund exemption?
A: Group long-term care insurance policies are not excluded and qualify one to apply for the exemption, if desired.

Q: How does a policyholder apply for exemption from the tax?

A: Opt-out requests will be processed by the Employee Security Department. Once approved, qualified employees will have to inform their employer (and future employers) that they are exempt for the withholding. Additional details on the coverage exemption request process are expected to emerge from program administrators before the opt-out window opens in October 2021.

Q: Where does a policyholder get the form/website to apply for the exemption?

A: Additional details on the existing coverage exemption request process are expected to emerge from program administrators at the Washington Employee Security Department before the opt-out window opens in October 2021.

Q: What happens when a Washington Cares Fund tax exempt employee changes jobs?

A: Once an exemption application is approved, Washington Cares Fund tax exempt employees need to inform future employers of their Washington Cares Fund tax exempt status.

Q: Once an employee has opted out and been approved by the state what is preventing them from canceling their policies?
A: The WA Employee Security Department recently noted that audit functions related to existing policy holder exemptions are to be “further addressed in future rulemaking.” This suggests that consumers may have to prove policies used to qualify for the exemption are still in-force in the future. Only clients with a legitimate need for long-term care coverage and who intend to keep their policies should apply for private LTC coverage, or the Washington Cares Fund exemption.

Q: If one applies for and is approved for exemption in late 2022, months after the tax starts to be withheld do, they get reimbursed for the months that they were exposed to the tax?
A: No.

Q: Will there be another opt-out request window in the future after the window for exemption requests closes on November 1, 2021?
A: Based on the legislation enacted this is the only exemption window opportunity.

Q: How will the program’s administrator’s audit exemption applications and verify that coverage is qualifying coverage?
A: We expect additional guidance from the program administrators we get closer to October, 2021 on this question.