In 2019, Democrats in Olympia passed a hefty new payroll tax that will hit paychecks starting in January. They reluctantly allowed a single opt-out choice that expires Nov. 1. The regressive tax is 58 cents per $100 earned, with no income limit. 

The new tax is for a mandatory, long-term-care program called the WA Cares Fund. One man I spoke with recently called it, “The Washington doesn’t care fund,” as the program is designed to deny benefits to many of the people who are forced to pay in.  See my description of the program in The Seattle Times. 

The one way to opt out is for people who have a private, long-term-care insurance policy. The deadline to have one, as mentioned, is before Nov. 1, and state Department of Social and Health Services officials tell me an exemption form will be posted online as early as midnight Oct. 1 or as late as 9 a.m. that day.  

Here are the steps, for those who will attempt the opt-out process. (Note that applications for exemption will be accepted between Oct. 1 and the end of 2022. Filing early, however, sets you up better to avoid the payroll tax entirely. Reimbursements for any funds taken out of paychecks before you get official exemption will not be given.)

• Go to a link on the “exemptions” page of the WA Cares Fund website. 

• Be prepared to set up a Secure Access Washington (SAW) account.

• Provide name, address and other personal information, along with an attestation that you have a qualified, private long-term-care insurance policy.

• Wait for state officials to approve your application (which won’t likely be that day). The state might get back to you for more information.

• Eventually, if your application is approved, you will be provided a letter to give your employer that exempts you from this tax.

The new state program disrupted the private insurance market, so the Legislature’s action made finding an affordable private plan even more difficult. Still, this program is proving to be so unpopular that I expect the state to receive far more opt-out applications than lawmakers expected.  

Sen. Curtis King, R-Yakima, asked in a recent Long-Term Services and Supports commission meeting, “What happens if four or five times [the number expected] opt out?” One agency official answered that this could increase the payroll tax in future years. 

For months, I’ve noted that this program being sold by state agencies and some lawmakers as a “safety net” — one that is supposed to give people peace of mind — is no such thing. The paltry lifetime benefit of $36,500 will provide little help for most people needing long-term care. False security is dangerous.

Instead of the state trying to become a long-term-care insurer, the Legislature should be encouraging people to plan for long-term care and not be dependent on Medicaid. It should also be working to roll back many taxes and regulations that make health-care coverage so expensive. 

On a recent episode of Inside Olympia on TVW, House Republican Leader Rep. J.T. Wilcox, R-Yelm, rightly said, “This isn't the state creating a safety net. This is a state collecting money from people that is supposed to go back to them but in many cases won't. That seems like a pretty leaky safety net to me." Wilcox added, "I think it's going to be really difficult to fix this,” and, "There are a number of things that we can do that would address the affordability of health care. However, over the last 10 years, we’ve mostly done things that make health care an awful lot more expensive."

This is the kind of constructive public discussion we need, not a mandatory long-term-care program that forces people to pay for something many don’t want or need — and that some won't even benefit from. The first step is to repeal this unpopular law, then lawmakers should enact reforms that make long-term-care insurance more accessible for everyone.