On Dec. 23, Gov. Jay Inslee announced that the Long-term care tax would be put on hold past the Jan. 1, 2022 due date. Now both House Democrats and House Republicans are introducing substitute bills that hope to mend holes within the original bill.
The Long-term care tax, or what is commonly dubbed the Care tax, is a bill meant to provide long-term care and services to those who do not currently have a private long-term insurance plan.
Benefits include covering home-delivered meals and reimbursing unpaid family caregivers. The benefits are capped at $36,500, with an annual increase that is determined by future inflation.
Employers would take a 0.58% tax out of every worker's paycheck. After 10 years, employees can start drawing funds from their individual account, or within 3 years if they experience a disabling/traumatic event.
The Care tax was signed into law back in April of 2019, however many workers and those who would be most affected by the bill did not hear about the Care tax until nearly before or after the Nov. 1 deadline to opt-out.
The drawbacks to this bill include lack of coverage for those nearing retirement in less than 10 years, no income cap for those who make a higher income, and permanent restriction to the accrued Care act funds once a resident moves out of state.
Employees wanting to opt-out are required to include proof of a separate private long-term care insurance plan. In addition, employees would be permanently exempt from the CARE Act Fund once they opt-out.
On Nov. 9, a class action lawsuit was filed against the Long-term care act, claiming that the program is invalid due to it being preempted by the Employee Retirement Income Security Act of 1974 (ERISA), while also violating multiple state and federal laws.
During the 60-day legislative period of 2022, the House Democrats introduced two bills. On Jan. 21, legislators officially passed the first bill: an 18-month extension given to fix program which will give them time to edit the bill. The second bill proposed additional exemptions to the tax, specifically to “enable military spouses, disabled veterans, border state residents, and non-immigrant visa holders to voluntarily exempt themselves from premiums for the WA Cares program.” Decision on that will be officially brought to the Senate's public hearing on Jan. 24.
House Republicans also introduced two bills, one which would fully repeal the program with no other service taking its place. The second bill would also include repealing the program, but by replacing it with an "affordable and optional long-term care insurance coverage."
As of now, both bills introduced by House Republicans have been referred to the appropriations committee.
Any funds taken out of an employee's paycheck meant for the WA Cares Act would need to be returned until further notice.
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