Regular readers of our newsletter will recall previous articles we’ve featured regarding this new tax. The rollout of the new program begins soon.
A quick review: the Washington Long Term Services and Supports Trust (LTC) Act was passed in 2019. Also known as the CARES Act, implementation was delayed until July 1st, 2023.
Additional Information on the CARES Act:
- This is the nation’s first public-operated long-term care insurance program.
- The insurance will be funded by a mandatory payroll tax for all employees; the beginning tax rate will be 0.0058% and there is no cap.
- The benefits include a maximum rate of $100 per day to a lifetime maximum of $36,500 (adjusted annually for inflation).
- Benefits are earned after contributing at least 10 years without a break of 5 years or 3 of the past 6 years at the time you apply.
- Workers born before 1968 can earn lifetime access to 10% of the full benefits amount for each year they contribute.
- While the payroll contributions begin July 1, 2023, the benefits are not available until July 1, 2026.
- Near-retirees earn partial benefits for each year they work.
- Military spouses, veterans with 70%+ disability, and workers who live out of state can opt-out.
- Employees that plan to retire in the next 10 years will pay premiums but may never qualify for benefits. Additionally, retirees that move out of state will not qualify for benefits.
The time period to apply for the exemption was between October 1st and December 31st, 2022; with proof of an existing long-term care policy. New exemption categories can be applied for on an ongoing basis.
For those of you that filed for exemption in 2022 or fall under the new exemption categories, make sure your employer has a copy of your ESD exemption letter which will avoid having the premium deducted from your payroll. If you cannot locate your exemption letter you can reach ESD’s WA Cares Fund representatives at email@example.com or by calling 833-717-2273.
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