Brace yourself. Your paycheck in July will probably be a little smaller.
That’s when the state will begin collecting premium payments for its long-term care insurance program, called WA Cares. Employers and employees might be feeling déjà vu. In January 2022, the payroll tax briefly went into effect before it was paused for 18 months so legislators could make changes to the new program.
While the delay was welcome, we urged legislative leaders to use the time to address the program’s many flaws. Unfortunately, the Legislature adjourned this session without addressing major issues with WA Cares. Now, most employees in Washington will need to begin paying the tax, which is 0.58% of wages, starting July 1.
This session, AWB and a wide coalition of employers, associations, and unions made fixing WA Cares a priority — again. We sent a letter signed by more than 200 organizations to legislative leaders and Gov. Jay Inslee urging action: either fix the program or delay the payroll tax a second time. Lawmakers didn’t do either.
AWB and many employers remain concerned about a long list of issues: lack of portability of benefits, no wage cap for premium payments, and the inability for people to opt in or out of the program (more on the issues below).
The Legislature established the Long-Term Services and Supports Trust Program, named WA Cares, in 2019. It was meant to address the growing need for long-term care and the reality that not enough people have long-term care insurance.
But legislators made some critical changes to the program in 2021 that made it problematic. For example, the original idea was to let people opt out of the state program as they acquired private insurance. That option was taken away. Now people are stuck paying into the state system even if they wish to purchase a more robust plan on the private market (WA Cares provides only a lifetime benefit up to $36,500). As it stands, the program is unclear, insolvent and fails to meet the long-term care needs of Washingtonians.
We recognize it’s difficult to roll out a new program, especially a first-in-the-nation experiment. A 20-member commission has been helping navigate these challenges. The Long-Term Services and Supports Trust Commission issued a series of recommendations this winter to improve the program.
The group suggested changes to allow people who work in Washington and move out of state to take their benefits with them. They also proposed clarifications to how long someone has to work to qualify for benefits and a pilot project for implementation. And the group recommended new options for private insurance to supplement WA Cares.
But lawmakers in Olympia ignored the group’s recommendations. No long-term care bill even received a hearing. It’s clear legislators had other priorities, but that doesn’t mean long-term care isn’t important. It’s not fair to ask Washington employees to pay into a poorly designed and flawed program they may never see benefits from. Come July, there will be an unwelcome surprise when paychecks shrink.
We hope the Legislature will take up the issue next session and finally address the many challenges of WA Cares. Washington’s long-term care program needs some long-term repairs.
Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.