On July 1, 2023, after a long delay, mandatory withholdings for the WA Cares Fund finally took effect. The WA Cares Fund is a state-run, long-term-care insurance program requiring employers to pay premiums through a mandatory payroll deduction from all employees who have not provided proof of an exemption.
Governor Jay Inslee signed the Long-Term Services and Supports (LTSS) Trust Act on April 21, 2021, creating this program. On January 27, 2022, Governor Inslee signed House Bills 1732 and 1733, delaying and amending the WA Cares Fund withholding until July 1, 2023. Now that the program has taken effect, all employees must contribute to the fund unless they qualify for an exemption. The premium equates to $0.58 per $100 of earnings, subject to reassessment every other year. The lifetime benefit available to individuals is $36,500, which will be indexed for inflation.
The benefits provided by the WA Cares Fund can be used for long-term care services at home, through a licensed residential facility, or a nursing facility. To be eligible for benefits, individuals must be:
- A Washington resident; and
- In need of assistance with at least three activities of daily living; and
- Be receiving care in Washington.
Employers are not required to contribute to employee premiums or to the WA Cares Fund but are tasked with withholding and remitting the full amount of premiums when due. An employer that fails to withhold premiums from employee wages may not deduct premiums retroactively and must pay the missed premiums during regular quarterly reporting. The first reporting quarter will begin on October 1, 2023.
Employees are still permitted to submit applications for exemptions to the Employment Security Department (ESD). According to the ESD, exemption applications submitted before June 1, 2023, have been processed and, if granted, the premium was not assessed on July 1, 2023. Any exemption application received and approved after July 1, 2023 will not take effect until October 1, 2023. According to the ESD, once an employer receives an approved exemption application from an employee, the employer must stop withholding premiums and is encouraged to return the employee's deductions at their earliest convenience.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
