In the spring of 2021, the state of Washington passed further legislation modifying the Long-Term Services and Supports Trust Program (LTSS Program), which was originally established in 2019. Many of our Vancouver clients have been asking about this program that requires most employees to contribute to long-term care benefits. Here are some of the most common questions so you better understand how the program works.
How does the LTSS Program work?
The LTSS Program will begin on January 1, 2022. From that date forward, all Washington employee wages of people over 18 who file Form W-2 with the IRS and earn more than $500 per year will be assessed a 0.58% premium on their earnings.
For example, if you earn $100,000 per year, $580 would be collected for long-term care every 12 months. There is no cap on how much can be collected, and bonuses, paid time off, and severance pay are all subject to the 0.58% rule.
The money collected will be used to provide long-term care insurance for people who have paid into the system. Proceeds can be accessed after January 1, 2025. Once you are vested by paying into the program for a certain amount of time, you may be eligible for up to $100 per day of assistance, with a lifetime benefit cap of $36,500.
What does long-term care insurance cover?
Long-term care services are intended to fill gaps not traditionally covered by other insurance, such as health insurance, Medicaid, or Medicare. Coverage includes services such as:
- Help with daily activities like bathing, dressing, and eating
- Transfer around the interior of your living quarters
- Assistance with bladder control
- Help with tasks made challenging by cognitive impairment
- Rehabilitative and therapeutic care outside an acute hospital setting
What if I already have private long-term care insurance?
If you already have comparable long-term care insurance purchased privately, you can opt out of the LTSS Program. The insurance must have been purchased prior to November 1, 2021. The opt-out period runs from October 1, 2021 through December 31, 2022. You must present proof of your insurance to your employer in order to have the payroll deduction waived.
I’m a self-employed worker – can I still qualify for the program?
Self-employed people are not obligated to participate in the program, but they may opt in if they so desire. You must choose coverage by January 1, 2025 or within three years of becoming self-employed.
Where can I get more information about Washington’s Long-Term Care Act?
We understand the Long-Term Care Act can be confusing. And, because it’s new, people have many questions. You may wish to opt out for various reasons, most commonly because you have your own private long-term care insurance, which can often provide better coverage for less money.
We are happy to answer all your questions about the LTSS program. We also have separate information available for Vancouver area employers. Call Davidson & Associates Insurance at 360-514-9550 to learn more about your options for long-term care insurance. Or, reach out to us online to start the conversation.