In 2019 Washington residents voted for the nation’s first bill to offset the cost of long term care services. The program is currently set to start in January 2022, however, opposition to the bill is growing. Lawmakers have 3 primary concerns: who pays the tax, who benefits from the tax, and what can be done with funds once people are eligible.

One of the primary concerns is who has to pay the tax of 0.58%, or $0.58 for every $100. Currently anyone working 500 hours per year or more in the state of Washington will have the tax automatically deducted by their employer. This means bordering states’ residents, and even Canadians, who work in Washington have to pay, even though they are not eligible currently to receive any of the benefits.

What about out of state workers? New workers? People on the verge of retirement?

In order to receive benefits from the tax Washington residents would be required to pay into the trust for 10 years, without a break of five or more years, or for three of the last six years. This means older residents would have to pay for the remainder of their career, but wouldn’t be eligible if they didn’t meet the duration requirement. Anyone who left the state and came back may also lose their eligibility.

If residents do meet all requirements, and then decide to retire in another state, they are unable to move funds to their new state. Only those continuously residing in Washington will be able to benefit. 

“An ongoing opt-out would give insurers less pressure as well, as the tight deadline caused a surge of business, and many insurance carriers pulled their products from the state temporarily.”

The Washington State Senate is asking for a delay until January of 2023 in order to work out the details. Governor Jay Inslee says it may be possible to do a special session with legislators and pause the tax until April 2022. Nothing is finalized at this time of publication.

Residents were given a one-time opt-out if they had proof of a private long term care insurance policy by November 1, 2021. Lawmakers would like to see the opt-out extended or continued for new workers or people who move to the state. This would give insurers less pressure as well, as the tight deadline caused a surge of business, and many insurance carriers pulled their products from the state temporarily.

While many are waiting to see what happens, some states are beginning to talk about programs of their own. There’s even talk of a Federal Long Term Care Insurance at some point. In the meantime, if you or your family have assets to protect or would like to be able to remove yourself from future taxes, consider a private long term care insurance policy of your own. Talk to one of our specialists who will run quotes, discuss our many products, and find a fit that’s perfect for your budget and needs.