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WA Cares Act - The Future of Washington Long Term Care

WA Cares Act - The Future of Washington Long Term Care

The Washington Cares Fund is the latest state insurance program intended to provide long-term health care benefits. The WA Cares Act aims to create affordable, long-term care insurance benefits, for those who are eligible to use the program. For employers, however, this means additional Washington payroll taxes and deductions.

WA Cares Act - What Businesses Need to Know 

While the Washington Cares Fund has been in the works for a while, and it will be even longer still before Washington employees can take advantage of the benefits, premium collections are set to begin in July of 2023. 

UPDATE 07.07.23: Premium collections for Washington Cares have begun. If you or your employer is having issues with these premiums and the new tax, or other responsibilities regarding Washington Cares, we urge you to reach out to a Washington State Payroll company for help.

But what is the Washington Cares Act? What does the future of Washington's long-term health care look like?

What is Washington Cares?

The Washington Cares Act is a state fund that eligible employees will be able to draw from in order to access healthcare services and support costing up to $36,500 over their lifetime. Adjustments will be made annually to account for inflation. 

Eligible employees will be able to start accessing the following things starting July of 2026:

  • Professional personal care in your home, an assisted living facility, an adult family home, or a nursing home
  • Healthcare equipment such as hearing devices and medication reminder devices
  • Home safety evaluations
  • Training and support for family members that are also care providers (paid or unpaid)
  • Home-delivered meals
  • Care transition coordination
  • Memory care
  • Environmental modifications like wheelchair ramps
  • Personal emergency response system
  • Respite for family caregivers
  • Transportation
  • Dementia supports
  • Education and consultation

Of course, the benefits of Washington Cares are not just open to anyone. 

Who Can Benefit from Washington Cares? 

Generally, working residents in the state must have worked for at least 500 hours per year in order to qualify at all. That is about 10 hours per week. Workers must also need help with at least three of the described activities of daily living under the Washington Cares Act.

However, outside of the above general requirements, there are three types of qualifications for Washington Cares, and each one grants the worker specific benefits. 

Here is a rundown of Washington Cares Eligibility:

Full Benefit, Early Access

In order to gain Full Benefit, Early Access coverage, employees must have contributed to the fund (via premiums / payroll deductions) for at least three out of the last six years. This is in addition to the general requirements above. 

Full Benefit, Early Access grants employees temporary coverage giving employees access to the full benefit amount if they need care while working or soon after they stop working.

Full Benefit, Lifetime Access

In order to gain Full Benefit, Lifetime Access coverage, employees must have contributed to the fund for 10 years at any point during their life so long as there isn't a break of five or more years. A break from work of five or more years will result in the employee starting over from scratch. This is in addition to the general requirements above.

Once employees earn Full Benefit, Lifetime Access they may access the full benefit amount at any point when they need care.

Partial Benefit, Lifetime Access

For employees who are already close to retiring, which is considered to be those born before 1968 under the WA Cares Act, it is possible to earn a partial benefit for each year worked while contributing to the fund. 

For each year worked (out of the 10 required for Full Benefit) employees will earn 10% of the fund. 

This is in addition to the general requirements above.

What if I Don't Want Washington Cares Coverage?

It might be possible that you don't want or need Washington Cares coverage, or don't want to have to contribute to the fund. 

To qualify for a Washington Cares exemption, workers must:

  • Live outside of Washington
  • Be the spouse or registered domestic partner of an active-duty service member of the United States armed forces
  • Have non-immigrant work visas, or;
  • Are veterans with a 70% service-connected disability rating or higher

There are also certain workers who are automatically exempt from Washington Cares, these include: 

  • Federal employees who work in Washington
  • Employees of tribal businesses in which the tribe has not opted in
  • People who are self-employed who have not opted in
  • Retired and non-working Washingtonians

What Businesses and Employees Should Know Regarding Washington Cares Premiums

Under Washington Cares, employees must begin contributing up to $0.58 for every $100 earned (0.58% of gross earnings). This money is considered a Washington payroll, tax deduction premium, and is withheld by employers. The state’s Employment Security Department (ESD) then collects the premiums from employers and adds them to the fund. 

Updates to Washington Cares Act

Since the original development of Washington Cares, several legislative acts have delayed the onset of premium collections. 

Now, employees will not need to begin contributing to Washington Cares until July of 2023. 

Employers who have collected premiums in 2022 as a precaution, must refund their employees the money in order to avoid any non-compliance. Businesses worried about future updates can join the Washington Cares Fund mailing list

Employers will need to collect premiums the same way they do for paid leave using the Paid Leave reporting system. Employers can report for both programs at the same time. 

Important to note is that employers will not pay for any share of the premiums for their employees. There is also no maximum limit on premiums for Washington Cares, in contrast to other types of payroll deductions.

Other Employer Responsibilities

Employers will also need to keep track of employees who are exempt from the program. 

Once an employee notifies the employer (with an approval letter) the employer will need to ensure they don't deduct any more premiums from the worker. It is important to also keep a copy of the letter on file as it will include the effective date of the employee’s exemption.

Get Help with Washington Cares Act

With numerous changes to the legislation, it is possible that you may be left a bit confused about what your responsibilities are under the new program. 

Employers looking for help with the Washington Cares Act should contact us today, as well as ensure that they have the proper payroll solution in place to account for the payroll deduction. 

In addition to Washington Cares, payroll software can help with all kinds of Washington payroll laws and compliance, such as Washington Minimum Wage Law.

Watch our payroll demo video below to learn more about how our software can help manage your premium collections and payroll deductions.

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