Starting July 1, employers will begin deducting premiums from Washington workers’ paychecks for the WA Cares Fund, the state’s new long-term care insurance program.
Through paycheck deductions, Washington workers will contribute 0.58% of each paycheck (from gross wages with no Social Security cap) during their working years to be able to access a $36,500 lifetime benefit (adjusted annually for inflation) to help pay for long-term care services when needed.
Employers won’t pay any share of premiums for their employees and can’t retroactively deduct WA Cares premiums. If employers don’t deduct premiums from contributing employees, employers will have to pay the premiums themselves during quarterly reporting.
What employers need to know
While employers don’t pay into WA Cares, they are responsible for reporting premiums and tracking exemptions. Employers must:
- Deduct premiums from employees who aren’t exempt. Employers will need to deduct WA Cares premiums from any paychecks paid on or after July 1, 2023, to employees whose work is localized in Washington (unless the employee has provided an approved exemption letter). Because both programs use the same localization definition, any worker who contributes to the state’s Paid Family and Medical Leave program will also participate in WA Cares. Employers should not collect premiums from workers with an approved exemption on file. These workers must have an approved exemption from ESD and have submitted a copy of the exemption letter to their employer.
- Track employee exemptions. Some groups of workers are eligible to apply for an exemption from the WA Cares Fund. It is the worker’s responsibility to provide a copy of their exemption approval letter to their employer, which states the date that worker’s exemption takes effect.
- Report employees’ wages and pay premiums. In October, employers will file their first quarterly reports and pay WA Cares premiums to the Employment Security Department (ESD). Employers will report for WA Cares at the same time as Paid Family and Medical Leave through an integrated employer account. However, they will need to submit a separate payment. Employer calculators to estimate WA Cares or Paid Leave premiums are available with other reporting information on Paid Leave’s website. Additional employer resources are available at wacaresfund.wa.gov/employers.
To help employers answer worker questions and communicate about the program, the WA Cares team has created an employer and community toolkit. Employers with questions about the program can also contact the ESD customer care team.
What workers need to know
WA Cares is designed to help workers live independently in their homes as long as possible. By contributing a small amount of each paycheck while working – less than a dollar a day for the typical worker – they’ll be able to access services like professional in-home care, making a loved one a paid caregiver, home safety modifications, meal delivery, transportation and more.
“Most of us will need some form of long-term care but don’t have a way to pay for it. As our population ages, this need is growing rapidly,” said WA Cares Fund Director Ben Veghte, Ph.D. “WA Cares will make a modest but critical amount of long-term care coverage affordable for all Washington workers for the first time. This program is an important step forward to help Washingtonians care for our families and age with dignity and independence.”
To prepare for the program’s launch, workers can:
- Learn program basics and calculate their contribution. Find more details on how the program works, including a worker contribution calculator with new features, on the recently updated WA Cares Fund website.
- Get up to speed on the program updates like benefits for near-retirees. Last year, the program added a new pathway for people who are near retirement to earn partial benefits for each year they contribute to the program.
- Research exemptions — and if they qualify and want an exemption, they need to apply and provide their approval letter to their employer. Exemptions for workers who have private insurance policies are no longer available, but four new types of exemptions are available on an ongoing basis. These new exemptions include conditional exemptions for workers who are a spouse/registered domestic partner of an active-duty U.S. armed forces member, work in Washington but live out of state, or have a temporary non-immigrant visa (including H-2A and H-1B visas). These exemptions are only valid as long as workers continue to meet the exemption criteria, and if they no longer qualify they must notify their employer and ESD within 90 days. There is also a new permanent exemption for veterans with a 70% or higher service-connected disability. They must apply to the Employment Security Department (ESD) to get an exemption and provide their approval letter to their current and future employers. If they haven’t applied yet, they should do so as soon as possible to ensure their exemption takes effect July 1. Refunds will not be available for those who don’t apply for an exemption or provide their letter to their employer in time.
- Get answers to questions and program news. Find webinar dates and recordings on the website. Those who still have questions can contact WA Cares. To stay up to date on news and events, subscribe to the program’s mailing list.