Long Term Care Coverage and the Coming WA State Plan

Owned by Micah Schaafsma
Last updated: Feb 01, 2022 by Alvis, MattVersion comment
5 min read

2022 UPDATE - WA Cares Fund Long Term Care Plan Put on Hold Until 7-1-23

Legislation has now been signed that will delay the implementation of the new state-sponsored Long Term Care plan that was planned to take effect January 1st. Currently, the WA state legislature is considering many proposals to amend this program. Per Governor Inslee's advice, SPU did not withhold the planned taxes from employee paychecks in 2022, anticipating this delay. The University continues to await the final form the program will take; but in any case, it is now fully on hold until July of 2023 while changes are considered.

According to the WA Cares Fund website:

On January 27, Governor Inslee signed two bills passed by the Legislature making key improvements to WA Cares Fund. These reforms will address coverage gaps and delay program implementation by 18 months. Changes include:

• Workers near retirement (born before 1968) will be able to qualify for partial benefits on a pro-rated basis.

• Workers who live out of state and work in Washington, military spouses, workers on non-immigrant visas, and certain veterans with disabilities will be able to opt out of the program if they choose.

• Workers will begin contributing to the fund in July 2023. Employers will refund any premiums collected in 2022 so far.

The WA Cares Fund website is being updated to reflect these changes and you can join our mailing list to get notifications as more information becomes available. For details on the changes, you can read House Bill 1732 and House Bill 1733.

ESD has updated instructions for employers and will be providing additional information and guidance in February. Sign up for ESD’s employer newsletter to receive updates.


The information in sections below is from prior to the update detailed above and explains how the plan will work once implemented.


New Long Term Care Plan Coming for All WA Employees - One-time Opt-out Allowed...

In May 2019, Washington State enacted the Washington Long Term Care Services and Support Trust Act (LTSS) which requires employees in Washington State to pay a 0.58% tax into a Washington State Trust starting in 2022. The tax is paid entirely by employees through payroll deduction. For example, an employee making $50,000 in annual income would pay $290 toward this fund.

Long Term Care (LTC) Insurance is designed to pay for long-term care services received at home, in an assisted living facility or nursing home if you are unable to perform defined “Activities of Daily Living” or suffer from severe cognitive impairment.

The WA LTSS is a state operated program designed to provide up to $36,500 of LTC benefits per person that qualifies. The LTSS also requires care to be provided in WA and only for WA residents. In order to file a claim under the LTSS, employees must have contributed to the fund for 10 years with no more than a 5 year interruption or 3 out of the last 6 years (at the time of filing a claim).

It is clear by this definition that many employees who are close to retirement may be required to contribute taxes to this fund without ever being able to use the benefits. A one-time exemption from the LTSS may be applied for by employees who hold qualifying, private LTC insurance purchased before November 1, 2021. This exemption is a permanent exemption and is only being offered this one time.

The Washington Employment Security Department (ESD) determines the rates, definitions, and benefits for the LTC plan design going forward. So it is the ESD that will decide whether a policy will qualify or not for the payroll tax exemption. Because application for a LTC policy can take weeks or months, anyone looking to enact a private LTC plan should begin the application process immediately.

Here is the timeline of the implementation of the LTSS plan for SPU employees:

  • June 10, 2021: LTC/LTSS Introduction Webinar (CLICK HERE to view)

  • Summer 2021: SPU LTC education campaign (webinar, emails, resources, links, etc.)

  • October 1, 2021 to December 31, 2022: employees can apply for a permanent exemption to the LTSS, but only if they have private LTC insurance plan that has been purchased sometime before November 1, 2021

  • January 1, 2022 all Washington State W-2 employees age 18+ will have a payroll tax deduction of 0.58%

  • October 1, 2021 – December 31, 2022 apply for a permanent exemption of the payroll tax and eligibility for future benefits if you have purchased LTC Insurance before November 1, 2021

    • You must also present your ESD approval letter to Human Resources in order for us not to withhold the WA LTC taxes from your paychecks in 2022. To do this, please drop off your form in-person at HR (we will make a copy and have you keep the original) or use our secure HR Digital Drop Box to submit an electronic copy of your approval letter.

The University has worked with LTC Solutions, Inc. for many years to provide a private LTC plan insured by Unum. This plan is available to all University benefit-eligible employees and their family members. For more information, please see the links provided below. Health underwriting is required for all applicants other than new hires in their first 30 days of employment.


How to Opt-out of the WA LTC/LTSS Program

WA Cares Fund Page for LTC Exemption Applications Now Available

If you have private Long Term Care (LTC) insurance (such as the Unum policy available through SPU benefits) and are planning to apply for an exemption to the coming WA Long Term Care plan, please know that the exemption application process is now open.

Apply to the ESD for a WA LTC Cares Fund exemption

Please REVIEW THIS PAGE CAREFULLY(!) to determine if an exemption really is the right thing for you. As a reminder, a qualifying private LTC plan must be purchased before November 1, 2021 and the exemption must be approved by December 1, 2022 for this permanent exemption. Once an exemption request is approved, you cannot later join the WA LTC plan in any circumstances. Exemptions will ‘take effect’ the quarter after your application is approved by the ESD. So it may be that taxes will be taken from 2022 paychecks if this application/approval is not approved right away. SPU has no control over the ESD approval process.

In order to avoid the WA LTC program and its accompanying payroll tax, you must also present your ESD approval letter to Human Resources. To do this, please drop off your form in-person at HR (we will make a copy and have you keep the original) or

Submit your exemption letter to the HR Digital Drop Box

Please contact Human Resources with any questions.


Looking into a Private LTC Plan or Have Questions?

If you would like to review the details of the private LTC plan offering sponsored by the University or have questions that are not addressed above, please reach out to LTC Solutions directly or SPU Human Resources for help. Human Resources is generally available from 8am to 5pm M-F at (206) 281-2908 or by email at hr@spu.edu.