Reminder: What You Need to Know About the Long-Term Services and Supports Trust Program
Enacted in 2019, the Long-Term Services and Supports (LTSS) Trust Program, also known as the WA Cares Fund, was created to provide a maximum lifetime benefit of up to $36,500 for approved long-term care services and supports to those who are eligible and who have been assessed as needing assistance with at least three activities of daily living.
To meet eligibility criteria, the beneficiary must be at least 18 years old and a current resident of Washington. Additionally, to be eligible for the benefit you must have worked and contributed to the fund for:
- At least ten years at any point in your life without a break of five or more years within those ten years, or
- Three of the last six years at the time you apply for the benefit, and
- At least 500 hours per year during those years.
Eligible beneficiaries may apply to receive benefits as of Jan. 1, 2025. Some examples of approved services and support include care in nursing facilities and assisted living facilities, home healthcare, home-delivered meals, training and support for paid and unpaid family members who provide care, and transportation.
LTSS Trust Program Implementation
The LTSS Trust Program is on track for implementation on Jan. 1, 2022 and will be funded by a .58 percent premium assessment on employee wages. Employers are not responsible for paying the premium; the premium assessed on employees is taken out of employee payroll.
As of Jan. 1, 2022, all private and public employers with a Washington employee, except for the federal government and federal tribes, must collect the new tax and begin reporting premiums on employee wages to fund the trust.
Please note: Most individuals who receive a W-2 are subject to the new tax, even some self-employed individuals, such as S Corporation owners.
How Does This Program Impact Me as an Employer?
As an employer, starting Jan. 1, 2022, you will be responsible for withholding a 0.58 percent payroll tax from all employee wages and remitting those payments to the state quarterly. ESD is integrating the LTSS reporting into the Paid Family and Medical Leave reporting system, so you will only need to report once for both programs.
Please note: The premium assessed on employees is taken out of employee payroll; employers are not paying this premium out of pocket.
If one of your employees opts out of the program, they must provide you with a notification of exemption; the only acceptable notification is a copy of the employee’s approved exemption letter from ESD. Once notified, you may no longer deduct premiums from the employee. In addition, you must maintain a copy of the employee’s approved exemption letter. Also, please be aware that you cannot opt-out of the program on behalf of your employee(s), each individual employee must opt-out on their own.
While implementation and logistics of this program are still being worked out, ESD has provided the following information to give employers an idea of when they can expect future communications regarding the program.
- The Department of Social and Health Services (DSHS) and ESD have launched a joint website on the WA Cares Fund. The website will continue to be updated and includes information for employers about employee exemptions, employer reporting requirements, an employer toolkit containing printable resources for employees, and options for those self-employed.
- Beginning soon, employers can expect to receive an e-newsletter, at least once per month, that will give updates for WA Cares and the Paid Leave program.
- In June, employers will begin to receive postal mail from ESD in addition to e-newsletters.
- In September, the ESD will begin offering live webinars and tutorial videos for employers.
How Does This Program Impact Me as an Employee?
As an employee, starting Jan. 1, 2022, a .58 percent payroll tax will be withheld from your paycheck.
Employees and individuals who are at least 18 years of age and receive a W2 income may choose to opt-out. If you wish to opt-out of the LTSS Trust Program, you must purchase long term care insurance before Nov. 1, 2021and will need to apply to ESD for an exemption starting Oct. 1, 2021 through Dec. 31, 2022. If ESD approves your application, you must provide notification of exemption to all current and future employers. With the LTSS Trust Program, you will only have premiums assessed while you are working. This means that when you retire, you will no longer pay a premium but will still be eligible to receive benefits. Many private long term care insurance plans require you to make continuous premium payments regardless of retirement status. This may be something to consider when deciding whether or not to opt-out.
For employees who are veterans, your VA benefits may qualify you for an exemption. To find out if your benefits include long-term care, please go to the U.S. Department of Veterans Affairs and Veterans Homes | WDVA. If you have a disability rating of 70 – 100 percent and long-term care is available to you through the VA, you will qualify for an exemption should you choose to apply for one.
Please note: Exempted employees cannot opt back into the program, even if you change jobs.
How Does This Impact Me as a Self-Employed Individual?
If you are self-employed and wish to participate in the LTSS Trust Program, you must elect to do so by Jan. 1, 2025, or within three years of becoming self-employed for the first time. According to the ESD, self-employed refers to those that are sole proprietors, joint venturers or members of a partnership, members of a LLC, independent contractors, or if you are otherwise in business for yourself. Corporate officers are not considered self-employed.You will be able to opt-in as early as January 2022. Opt-in applications will be available in January. If you do choose to opt-in, you will pay the .58% premium rate on your net earnings and or gross wages, if any, paid to you from your business entity.
Please note: If you are self-employed and receive a W-2, you will be subject to this new payroll tax, even if you have not opted-in to the program. If you wish to opt-out of the LTSS Trust Program, you must purchase long term care insurance before Nov. 1, 2021and will need to apply to ESD for an exemption starting Oct. 1, 2021 through Dec. 31, 2022.
How Do I Know if an Insurance Policy, Contract, or Rider Qualifies as Long-Term Care Insurance?
Please make sure to review the Office of the Insurance Commissioner’s website for more information on what qualifies as long-term care insurance.
Where Can I Get More Information Regarding Long Term Care Coverage Options in Washington State?
If you would like more information regarding long term care coverage that provides you the opportunity to opt out of the LTSS Trust Program tax, visit the Office of Insurance Commissioner's "Long-term care insurance companies approved to sell in Washington state" page.
Learn More
Please make sure to visit www.wacaresfund.wa.gov or register for one of the scheduled live webinars for more program information.
If you have specific LTSS program questions, you can contact WA Care program managers here.
