Toolkit — Lawmakers propose delaying WA Cares payroll tax until 2023

Toolkit — Lawmakers propose delaying WA Cares payroll tax until 2023 https://wahospitality.org/wp-content/uploads/2021/07/LTC_website800x500.jpg

UPDATE: January 10, 2022

The Legislature introduced HB 1732, which would delay the implementation of WA Cares until July 2023. The bill must get through several legislative steps before becoming law. However, all signs indicate the Legislature will approve the bill and send it to Gov. Inslee for signature as quickly as possible.

To Deduct or Not to Deduct: The Washington Cares Act Dilemma Will Require Employers to Make a Choice this January


UPDATE: January 4, 2022

Seattle Times: Washington state Democrats propose delaying WA Cares payroll tax until 2023

OLYMPIA — State Democratic lawmakers have filed bills to delay the payroll tax that funds WA Cares until July 2023, and allow more people to opt-out of Washington’s first-of-its-kind long-term care program.

The legislation comes after months of critiques by opponents and questions from state residents over the new program, which is styled as a social insurance program and is funded by a .58% payroll tax on workers.

That payroll tax was set to begin Jan. 1 of this year, just days before lawmakers begin their regularly scheduled legislative session this coming Monday.

But last month, Gov. Jay Inslee announced that in light of concerns — including over people who will pay the tax but never receive benefits — the state wouldn’t collect the assessment from employers before April.

Read more…


UPDATE: January 3, 2022
Legislative leaders announced on Dec. 17 they intend to make changes to the state’s new long-term care program (WA Cares) during the 2022 legislative session. Governor Jay Inslee has ordered the state Employment Security Department not to collect WA Cares premiums from employers before they come due in April.

However, the governor issued a clarifying statement on Dec. 23 saying in part:

As an employer, the state of Washington is following the law and will have to begin collecting money from state employee paychecks as of January 1st. We know that many other private employers are doing the same, and others are hoping that the Legislature will change the law. However, if the Legislature fails to do so, employers will still be legally obligated to pay the full amount owed to state ESD to begin the long-term care program.

Here’s the dilemma:

  • If employers decide to not collect employee premiums, and the Legislature does not change the law, employers will be on the hook for paying the entire premium themselves.
  • On the other hand, if employers do collect employee premiums as required by current law, and the
    Legislature changes the law this session, employers need to be prepared to return those premiums back to employees right away.

In other words, the current status of WA Cares is up in the air. Each employer will need to decide if they are going to collect WA Cares premiums from their employees. Employment law attorney Catharine Morisset shared this post from Fisher Phillips, which explains the legal risks for collecting and not collecting premiums. Association members should consult with their legal counsel to determine the best course of action for their business.

January 3, 2022: Fisher Phillips – To Deduct or Not to Deduct: The Washington Cares Act Dilemma Will Require Employers to Make a Choice this January


Original post: July 21, 2021

Starting in January 2022, employers must collect funds from their employees for long-term care. 

WA Cares was enacted by the state Legislature in 2019 so employees could contribute funds to services they may need in the future. Each employee will contribute $0.58 for every $100 they earn to this fund in 2022. This amount is subject to change. Employees can start drawing on this fund starting January 2025. 

What this means for employers 

As an employer in Washington, you are required to report your employees’ hours and wages every quarter and pay the premiums, the same way you do for Paid Family & Medical Leave. The premiums come from your employees and employers do not pay any share of this contribution. You can learn more about your responsibilities as an employer here. 

Employers do not start collecting these premiums until January 2022 and you can expect to see more news about WA Cares from the Washington Hospitality Association in the coming months. 

Recipients of this benefit can access benefits of up to $36,500 (lifetime maximum) including, but not limited to: 

  • Professional and personal services in their home, an assisted living facility, adult family home or nursing home 
  • Adaptive equipment and technology such as hearing devices and medication reminder devices 
  • Home safety consultations 

Employees qualify to receive this benefit if they have worked and contributed to the fund for: 

  • At least 10 years at any point in their life without a break of five or more years  

— OR — 

  • Three of the last six years at the time they apply for benefits  

 — AND — 

  • work at least 500 hours a year. 

Read more about eligibility here. 

Other options

Employees can apply for a permanent exemption to this fund. Read more about exemptions here. 

Your employees have a choice if they act soon to purchase their own private long-term care insurance policy that may qualify them to opt out of the payroll tax. Their policy must have been purchased before Nov. 1.

BuddyIns

BuddyIns offers options to purchase long-term care insurance policies. The company held a webinar for those with questions: Watch the replay here.

Association Resources Contact Information

LTC Specialist, Planning and Insurance: BuddyIns, Inc Marc Glickman C: 818-264-5464  marc@buddyins.com

Group or Individual Plans:

HIHIT: CLG Employer Resources Holly Hahn C: 425-941-7603 hollyh@clger.com

The Partners Group Todd Miller- tmiller@tpgrp.com

Individual Plans:

Nicholson & Associates Insurance Drake Nicholson P: (360) 352-8444 E drake@nichinsure.com

New York Life: Jeanette Fiore P: (509) 528-7097 jfiore@ft.newyorklife.com

Villano Insurance & Financial Services:  Vince Villano  P: (253) 503-3573  vvillano@farmersagent.com

Anyone who is self-employed can opt in to the program. Click here to read more.