Employers urge governor to fix or pause WA Cares

OLYMPIA — More than 230 employers are calling on Gov. Jay Inslee and legislative leaders to fix the troubled WA Cares program this session or pause this controversial payroll tax set to take effect in July.  The group led by the Association of Washington Business sent a letter on Monday to the governor and legislative leaders raising concerns about the state’s long-term care program, which was put on hold last year to address solvency concerns and other issues.  While the Legislature made some improvements, it didn’t fix the key issues outlined in the letter sent by a coalition of employers and organizations representing industry, labor and local governments. “We appreciate and respect that the program was put in place to address the need for long-term care in the state of Washington,” the letter states. “We are concerned that the following key issues make the program extremely problematic, and they must be addressed prior to implementation of the payroll tax on July 1, 2023.”

The issues include:

• Portability of benefits
• Recertification of private long-term care insurance exemptions
• Employer reporting consistency and premium reporting accountability
• Self-employment income reporting
• A pilot project for benefit implementation
• Simplifying the ten-year contribution requirement
• Structuring the supplemental private long-term care insurance market to align with the WA Cares Fund

The Legislature has not yet considered the recommended changes released by the Long-Term Services and Supports Trust Commission in January.  The new program was to be funded by a payroll tax on employees of 58 cents per $100 of earnings. Workers who pay into the fund would receive up to $36,500 in lifetime benefits for long-term care needs. The letter raises other concerns, such as a lack of a rolling opt-in or opt-out process for those who lose or purchase private long-term care insurance.  The state offered a one-time opt-out to those who purchased private insurance before Nov. 1, 2021. But many struggled to sign up for a plan amid a spike in demand and collapse of the private market.  An appeal process is needed for those who were unable to opt in or opt out of the program through no fault of their own, the letter notes.  “This unfortunately feels like a case of déjà vu,” said AWB President Kris Johnson. “Last year, we called on Gov. Inslee and lawmakers to fix the significant issues that were raised about this program, and they agreed to push pause for 18 months. Since then, however, very little has been done to address the original concerns and now we’re right back in the same position of asking lawmakers to either fix the problems or push pause again. If this is allowed to take effect as-is, we expect a large number of Washingtonians will be unpleasantly surprised when a new withholding is added to their paychecks beginning in July.”

About the Association of Washington Business

Formed in 1904, the Association of Washington Business is Washington’s oldest and largest statewide business association, and includes nearly 7,000 members representing 700,000 employees. AWB serves as both the state’s chamber of commerce and the manufacturing and technology association. While its membership includes major employers like Boeing and Microsoft, 90% of AWB members employ fewer than 100 people. More than half of AWB’s members employ fewer than 10. For more about AWB, visit www.awb.org.