Legislation would reopen WA Cares opt-out

COLFAX — A local lawmaker is co-sponsoring a pair of bills that would give some workers in Washington state a reprieve from the long-term care tax.

Rep. Joe Schmick, R-Colfax, is co-sponsoring the bills with Rep. Peter Abbarno, R-Centralia. The bills would reopen a limited opt-out period for WA Cares and let individuals who have paid into the program transfer benefits to a spouse.

WA Cares deducts 58 cents per $100 earned for every worker to fund a limited lifetime benefit – up to $36,000 – for long-term care costs.

Before the program launched in July 2023, workers had a limited window to provide proof of a private long-term care plan and opt out of the mandatory payroll tax.

“There were about a half million Washingtonians who did get a chance to opt out and many more who were either confused and didn’t have all the information and didn’t opt out, or didn’t get out because insurance companies at that point couldn’t process claims fast enough and they shut that process down,” Abbarno said.

According to House Bill 1025, “An employee who attests that the employee has long-term care insurance purchased before Nov. 1, 2027, may apply for an exemption from the premium assessment.”

The bill would open a one-year opt-out window.

Exempt employees would not be entitled to a refund of any premium deductions made before the effective date of an approved exemption.

In addition, House Bill 1026 would allow an individual to transfer a worker’s available benefits units to a spouse.

“We live in a community property state and when one spouse is not bringing home income, it seems patently unfair that a spouse who is missing out on that community asset wouldn’t get to use the long-term care program,” Abbarno noted. “You can end up getting taxed in a payroll tax for your entire career, and you may never use this benefit, but God forbid your spouse needs it, they can never use it.”

The bills do not attempt to repeal the program but come in response to complaints he’s repeatedly heard from constituents.

Elizabeth New, director of the Center for Healthcare and Center for Worker Rights at the Washington Policy Center think tank, recently wrote about the legislation.

“I will not be surprised to hear supporters of WA Cares say that HB 1025 is an attempt to end WA Cares, as they did with failed Initiative 2124,” wrote New. “But even if everyone forced to be in WA Cares leaves the program, lawmakers could not close up shop. The exemption only applies to LTCI holders who apply by Dec. 31, 2028. Further, many people will remain. They would then eventually be joined by others who enter the workforce and new residents after this reopened exemption window closes.”

Supporters of WA Cares argue the program is critical to protect aging workers.

The 2025 legislative session begins on Monday, Jan. 13 and is scheduled to end on April 27.