The Long Term Care Trust Act is becoming a reality in the State of Washington and employers and individuals need to understand what is expected. There is not much time to make important decisions regarding this mandatory coverage and the decisions that are made now may not be reversible in the future.
To recap what is in our local news, there will be a payroll tax of 0.58% beginning January 1, 2022 to pay for long term care services (rules apply) that Medicaid currently covers after a person becomes eligible for those benefits. Washingtonians must work at least 500 hours a year and pay these “premiums” for 10 years before becoming fully vested in the program (rules apply). For W-2 employees this is mandatory participation; self-employed persons have the ability to opt in by 2025 (rules apply).
Retired Washingtonians will not participate in either the tax or the program. If a person works in Washington and lives in Oregon or Idaho, the worker must pay the tax but will not be eligible for benefits unless of course the worker moves to Washington permanently. If a person moves out of state for 5 consecutive years, forfeiture of benefits occurs (found in the payroll tax “rules”). There are other pieces to this legislation that affect vestment, participation, union participation, and exemptions that in some cases may need legal interpretation to administer.
The program has a lifetime cap of $36,500 plus CPI. Services that are included in this benefit are assisted living facilities, adult care homes, home health caregiving, wheelchair ramps, Meals on Wheels and other services administered by Washington State’s pre-approved vendors and providers.
A person can officially and permanently opt out of this tax and program if at least two conditions are met:
A private Long Term Care policy must be purchased before November 1, 2021 (date possibly subject to change), and
Fill out exemption paperwork and submit to the state between October 2, 2021 and December 31, 2022 (dates and exemption rules are subject to change)
There are several private Long Term Care plans that are offered in Washington that can be tailored to an individual’s lifestyle and budget. It is recommended that these private plans be purchased prior to November 1, 2021 to meet the current exemption standards.
A licensed and knowledgeable broker at Group Health Washington will design a Long Term Care plan that will give you the ability to choose your future instead of limiting yourself to the state program. No one knows what the future holds and private Long Term Care plans are portable, unlike the state’s program. That means if you decide to retire to another state, you can take the private plan with you. You can choose your own benefit structure specific to your personal situation. You can choose to use providers and facilities of your choice instead of having to use pre-approved providers.
Most importantly, a broker can show you how you can protect your assets if the need for Long Term Care arises. Time is running out to be able to choose how you want to finance long term care. Contact Group Health Washington to discover what your options are.
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