Workers deserve an extended opt-out period for the mandated long-term care program

Mar 25, 2021
Written by Rose Gundersen, VP of Operations & Retail Services

Effective 1/1/2022, all workers in Washington state will be subject to a new mandated payroll deduction to fund a newly established Washington State Long-Term Services and Supports Trust (LTSST). The price-tag doubles the rate workers pay for the paid family leave program with a lifetime benefit of only $36,500 that will not start until 1/1/2025. This program’s eligibility limitation and the lack of portability means that many who are required to pay into the program would not be eligible for benefits.

Employers and workers need to understand how this may affect their paychecks and the continuous about-face limitation for opting out.

The business community supported the Long-Term Services and Supports Trust Commission the Legislature established in 2019 through the passage of 2SHB 1087 because of the flexible opt-out feature for workers who purchase their own long-term care insurance. In 2020, however, the Legislature passed SSB 6267 limiting exemptions subject to the Employment Security Department’s approval within 10/1/21 to 12/31/22 only.

This year, the Legislature’s proposed HB 1323 that would further limit the opt-out to those who purchase long-term care “before the enactment of this act.” According to the LTSST Commission’s 12/3/20 meeting minutes, it really meant before the 7/28/2019 because “[t]he Commission recommends limiting opt-out to those who had private long-term care insurance prior to the enactment of the Trust.

The current program’s long-term care eligibility and benefit are both limited while portability is an unresolved issue. Those who retire to a different state or move away would not receive services from this program. Workers and employers deserve sufficient time to determine opt-out and the Trust Commission needs to coordinate proactively with private insurance carriers to design wrap-around programs.

Washington Retail urges the Senate to include an amendment in HB 1323 that extends the opt-out to at least the end of 2021.