In response to an outcry from Washington companies and workers, the governor postponed implementation of the WA Cares Fund until July 1, 2023, to give the legislature time to address some of its apparent shortcomings. The legislature passed House Bill 1733 to address some of these issues, and the governor signed the bills into law on January 27, 2022.
There are two main concerns. First, people who lived outside the state of Washington but worked inside the state must pay the tax. However, they would not receive any of their benefits. People can only use the benefits while living in Washington state. The other concern is that the funds are unavailable until 2025 and only for those who worked over 500 hours per year for at least three of the previous six years or at least ten years without a break of five or more years. Those who plan to retire before 2025 would pay into the plan but not be eligible to receive any benefits.
The new rules include the following key aspects:
- New Deadline for Covered Employees to Apply for Exemption: WA Cares exempts employees who purchased other long-term care insurance before November 1, 2021. The new rules reflect the extended deadline (now December 31, 2022) to apply for a permanent exemption.
- Exemption for Disabled Veterans: The rules address the exemption for U.S. military veterans with a service-connected disability rating of at least 70 percent. The ESD will begin accepting applications from qualifying disabled veterans on January 1, 2023.
- Conditional Exemptions: Certain exemptions under WA Cares are conditional or non-permanent. The conditional exemptions include those for military spouses, workers with non-immigrant visas, and Washington workers who maintain a permanent residence outside of the state. The new rules require those who qualify for these conditional exemptions to notify the Employment Security Department (ESD) and their employer within 90 days of the date when they no longer qualify for the exemption. Once the employer has been notified, the employer must begin withholding the required WA Cares premiums on the first day of the next quarter. Employees who fail to provide the required notice will owe the required premiums to ESD, and those premiums will be subject to a monthly interest charge of 1 percent until they are fully paid.
Employees who already have a qualifying Long-Term Care Insurance plan purchased before November 1st, 2021, must still submit an exemption request to the Employment Security Department through SecureAccess.wa.gov. In addition, the Employment Security Department may require the employee to create an active SAW account.
Once the employee has a SAW account, select the ‘Add A New Service’ button on the left-hand side of the screen. Next, select the ‘I would like to browse a list of services’ button on the right-hand side. Scroll through the list to Employment Security Department. Click it and select ‘Paid Family and Medical Leave’ from the drop-down menu. After the confirmation screen displays, the service is added to the employee’s Secure Access page. Under Paid Family and Medical Leave, hit the Access Now button. This site asks for a copy of identification documents like a driver’s license or passport. Submit a copy of the ID. That is all that is necessary.
The Employment Security Department will verify that the employee has an active LTC plan based on the ID submitted. Once verified, the Employment Security Department sends an exemption letter to the employee. The employee must give a copy of the letter to the employer. The employer keeps the exemption letter as proof they do not have to collect the payroll tax from the employee. In addition, during the New Hire process of future employees, employers should ask if the new employee has an exemption letter, so the payroll tax is not collected or paid by the employer.
*This document simplifies complex information as it is understood by Time Equipment Company. It is not to be taken as legal advice. The guidelines are consistently changing. For further information, please visit the WA Cares Fund site.