FYI! In January 2022, Washington announced they would be delaying the Washington Cares Fund tax collections until July 1, 2023, and they would refund any premiums collected before that date.
If you’re an employer with employees in Washington, listen up. Starting in 2023, you need to make an additional deduction from Washington workers’ paychecks for the Washington Cares Fund. But, what is the Washington Cares Fund, and how much do you have to deduct and remit? Get all of the answers about the new program here.
What is the Washington Cares Fund?
The LTSS Trust Act established the Washington Cares Fund in 2019. The Washington Cares Fund, also known as Washington Cares and the WA Cares Fund, is a mandatory long-term care insurance benefit for workers.
Starting in 2023, Washington employees must begin paying premiums for the fund. And in 2025, eligible individuals can begin receiving the program’s benefits.
The fund was designed to give workers peace of mind and lift the financial burden of long-term care costs.
How does it work?
The WA Cares Fund is entirely employee-funded. And, most employees must contribute to it. Under the new law, Washington workers will pay up to $0.58 per $100 of earnings (or 0.0058 X 100).
There is currently no cap for the WA Cares Act. This means that Washington employees will continue contributing to the fund no matter how much they earn each year.
Employers are not responsible for any contributions. However, employers do need to remit employees’ premiums to the Employment Security Department.
Keep in mind that the employee contribution amount of $0.58 per $100 of earnings can change over time.
What are the benefits of WA Cares?
Washington workers eligible for WA Cares benefits can potentially receive a number of services and support, including:
- Professional personal care in your home, an assisted living facility, an adult family home or a nursing home
- Adaptive equipment and technology like hearing devices and medication reminder devices
- Home safety evaluations
- Training and support for paid and unpaid family members who provide care
- Home-delivered meals
- Care transition coordination
- Memory care
- Environmental modifications like wheelchair ramps
- Personal emergency response system
- Respite for family caregivers
- Dementia support
- Education and consultation
Each eligible individual will be able to access services and support costing up to $36,500 when benefits become available. Like with the contribution amount of $0.58, the total value of the benefit ($36,500) can change over time.
Who is eligible to receive benefits?
To receive long-term care benefits, individuals must be at least 18 years old and a current resident of Washington state.
Individuals must also meet WA Cares contribution requirements before they apply. To qualify, employees must have worked and contributed to the fund for:
- At least 10 years at any point in their life without a break of five or more years within those 10 years or three of the last six years at the time they apply for the benefit AND
- At least 500 hours per year during those years
For benefit eligibility, individuals must need assistance with at least three activities of daily living, such as:
- Medication management
- Personal hygiene
- Cognitive functioning
- Transfer assistance
- Body care
What do Washington employers need to know?
Again, employers are not responsible for contributing to the WA Cares Fund. However, they are responsible for:
- Deducting employee premiums from paychecks starting in 2023
- Remitting premiums to the Employment Security Department
- Knowing which employees are exempt
If you already offer employees long-term care insurance, you can continue to do so, and employees can determine whether or not to apply for exemption.
For more information on the program, contact Washington state directly or read up on the new program.
What else do you need to know about the Washington Cares Fund?
Washington Cares Fund example
Now that you have some background information on Washington’s new program, let’s take a look at an example of calculating the WA Cares Fund.
As a reminder, participating employees must pay $0.58 per $100 of earnings, and there is currently no cap.
There are a couple of ways you can calculate how much the employee’s premium is.
Say your employee earns $30,000 per year. To calculate the employee’s annual WA Cares contribution, you can multiply their annual income by 0.0058:
$30,000 X 0.0058 = $174
You can also calculate the annual premium by dividing the employee’s total income by $100 and multiplying it by $0.58:
$30,000 / $100 = 300
300 X $0.58 = $174
An employee with annual earnings of $30,000 owes $174 to the fund. If their wages increase, so would their contribution amount.
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This is not intended as legal advice; for more information, please click here.