In January, Understanding How Misguided, Badly Written, Oversold Taxpayers Feel About State Long-Term Care straight is – and after a federal class action lawsuit court case had been filed and a cease and desist letter had arrived from Idaho – the Washington State Legislature added more exemption categories of the fund that the law created and the accompanying payroll tax of 58 cents for every $100 earned. This was in addition to an 18 month delay.
Updates on the WA Cares Fund The website explains that workers “living out of state, military spouses, workers on nonimmigrant visas, and veterans with a service-connected disability of 70% or greater” can exclude themselves, under a “deliberate” the exemption they will have to apply for later. These groups of people do not expect to benefit from the WA Cares Fund, even after paying into it, which was the reason for the new allocation. People who end up leaving the state during their retirement years and those who don’t contribute for 10 years should also be prepared to donate their money to this program. There is no “get out of jail free” card for them.
Prior to this change in law, only people who had a private long-term care insurance plan purchased before November 1, 2021 could apply to opt out. And by mid-April, more than 477,000 people had them.
If you fall into one of the new exemption categories, pay particular attention to words like “may,” “willing,” and “is capable.” Exemption is not automatic, as the word “exempt” implies. So instead of breathing a sigh of relief that the state is going to allow you to keep more of your income, write it down on your calendar to apply for an exemption from the Long Term Care Act on January 1, 2023. That’s when the state says you’ll be able to. (I’ll stay posted on where to do it and give updates here.)
Don’t fall asleep to the restrictive state wheel. I think the supporters of the law are hoping you will. The WA Cares Fund needs as much money as possible because it is deemed insolvent before it even starts.