"So the question is, why don’t they know? Why hasn’t the state notified all employers that coming January 2022, they are going to be mandated to withhold and send that tax into the state’s WA Care Trust account? I haven’t received any clear answers on this."
That's financial adviser Val Mikesell, owner and president of The Mikesell Group in Gig Harbor, writing in an industry newsletter, InsuranceNewsNet, about Washington's new long-term care law and the payroll tax that's coming workers' way in January. Like many people in the financial advising, long-term planning and insurance industries, rules for the law aren't yet fully formed, creating confusion, indecision, a bit of anger and a lot of annoyance.
Mikesell writes: "(T)hey are basically building a plane while it is flying and have failed to notify its passengers that they are on that ride. Nearly no one knows about this coming mandate."
The law was passed in 2019 and tweaked this legislative session. But only now are Washingtonians — workers and employers — learning about the plan, and usually not from the state. That's irresponsible and feels intentional.
State residents, and some non-state residents, are going to be deprived of long-term options that fit their individual situations. And many will be deprived even of time to plan for this impact to their household budgets. A website, WACaresFund.wa.gov, was recently created and gives some basic information. It used to provide a contact form for individual questions, but I see that has been taken away and an email is now provided instead.
Planning only appears to matter sometimes, it seems: One of the main reasons some lawmakers wanted this law was because they said Washingtonians weren't planning properly for long-term care. That costs the state a lot of Medicaid dollars. To stop the bleed, the Legislature passed a law to take 58 cents of every $100 a person makes and send it to a long-term care account that can be used by people who pay in and meet qualifications should they ever need long-term care (there are several points of qualification and disqualification — check them out here).
The now-named WA Cares Fund is a socialized system that a lot of people with their own long-term care funding plans, whether that is to use private insurance, assets or family resources, aren't thrilled about. No matter how much you pay in over your working years, you are eligible for the same insufficient $36,500 lifetime benefit, should you need long-term care, the fund stays solvent and you meet various parameters.
Learn more. Fast. A way to opt out of the state payroll tax exists, IF you have your own long-term care insurance purchased before Nov. 1.
