UPDATE 02/02/2022: WA Long Term Care (LCT) Delay
On January 27, 2022, Governor Inslee signed two bills passed by the Legislature making key improvements to WA Cares Fund. The two bills, House Bill 1732 and 1733, will address coverage gaps and delay program implementation by 18 months.
Workers will begin to contribute to the fund in July of 2023, and employers that collected the premiums are in the process of refunding employees’ premiums. As a reminder, RASI heeded the governor’s directives and did not withhold the tax so there is nothing to do at this time.
In June of 2023, RASI will implement the withholding functionality for the WA Cares Fund premium deductions.
This information can be found @ WA Cares Fund.
RASI Clients
UPDATE FOR RASI CLIENTS 02/02/2022:
RASI has heeded the governor’s directives and did not withhold the tax so there is nothing to do at this time.
In June of 2023, RASI will implement the withholding functionality for the WA Cares Fund premium deductions.
If you have any questions or concerns, please reach out to RASI’s Compliance Department through Support Request or email @ Compliance@rsiaccounting.com.
UPDATE 12/17/2021: WA Long Term Care (LCT) Delay
Washington Cares Fund is Delayed until April of 2022.
The Legislature and Governor Inslee have announced plans to change and improve the WA Cares Fund during the 2022 legislative session, which is scheduled to conclude in March 2022. Per direction from the Governor, ESD will not collect premiums from employers until April 2022 or until further direction is received.
There will not be any Washington Cares Fund withheld until further direction is received. The functionality to mark employees exempt will be available in the future before deductions are to begin.
The LTC delay authorized by Governor Inslee does not apply to employees’ withholding, because the Governor lacks the authority to change the law, and only applies to the collection of fees from employers. More recently provided guidance on the delay of LTC addresses this fact and in that guidance, Governor Inslee has stated that “while legislation is under consideration to pause the withholding of LTC fees, employers will not be subject to penalties and interest for not withholding fees from employees’ wages during this transition.”
Additionally, Senator Andy Billig and Speaker Laurie Jinkins stated that “in addition to delaying the premium assessment, we also support employers pausing premium collections from employees in Washington so lawmakers can take necessary action. While we cannot direct employers not to collect, we strongly encourage them to pause on collecting premiums from employees, giving us time to pass legislation extending implementation dates until next year. We know that this extra time will allow us to find solutions and craft updates to the Fund that allows Washingtonians to age with dignity in their own homes.”
Further information about the guidance can be found @ the WA Office of the Governor News & Media.
RASI Clients
UPDATE FOR RASI CLIENTS 12/17/2021:
RASI will follow the guidance of Governor Inslee, Senator Andy Billing, and Speaker Laurie Jinkins and delay the withholding of LTC until the legislation has the opportunity to make changes to the law. Once the legislation has announced when withholding shall begin, RASI will provide the functionality required for withholding and marking employees exempt.
If you have any questions or concerns, please reach out to RASI’s Compliance Department through Support Request or email @ Compliance@rsiaccounting.com
Original Post 12/13/2021: WA Long Term Care (LCT)
Beginning January 1, 2022 Washington employees are subject to a new payroll tax to fund a state-run long-term care (LTC) program.
What is the WA Cares Fund?
The Washington State Legislature established a long-term care insurance benefit for all eligible workers to address the future long-term care crisis. Under this law, individuals will have access to a lifetime benefit amount that, should they need it, they can use on a wide range of long-term services and supports.
What should employers know about the program?
- Employees that have alternative qualifying LTC coverage in place before November 1, 2021, can opt-out of the program
- This is done by requesting an exemption through the Employment Security Department (ESD)
- An employee that has opted out of LTC coverage may not become a qualified individual or eligible beneficiary in the future
- They are permanently ineligible for coverage under the program
- For an employee to be marked exempt from the LTC withholding, in the employee’s profile, the employee must present their exemption approval letter from the ESD
- If an employee fails to present their approval letter, the premiums withheld are non-refundable
- An employee’s exemption takes place the quarter after the exemption was approved by the ESD
- ***Employers must retain a copy of each employee’s ESD exemption letter
What is the premium rate?
- The premium rate for withholding is 0.58% of all wages paid by employers
- Tips are not qualified wages for purposes of calculating and deducting the premium
- The LTC premiums will be paid through the same portal currently used to pay and report Paid Leave
How is the program funded?
- WA Cares is self-funded entirely by worker contributions
- There are no required employer contributions
What is the program timeline?
- Beginning January 2025, each person who is eligible to receive the benefit can access services and supports costing up to $36,500
- To earn benefits, an employee must contribute at least 10 years (without a break of 5 of more years) or have contributed 3 of the past 6 years at time of application for benefits, and have worked at least 500 hours during each of those years
This information can be found @ WA Cares Fund website.
RASI Clients
RASI is in the process of developing the withholding tables and reports to accommodate the new requirements and make payments on your behalf. This process will be in place well before the beginning of the new year and an alert will be posted to communicate when this is complete. At this time, you will be able to mark employees exempt that have presented an ESD approval letter.
