July 1 – WA Cares Mandatory Premium Collections

The WA Cares Fund is a mandatory long-term insurance benefit funded by employee premiums to purchase in-home and/or in-facility services and support. It is administered by the Washington State Employment Security Department (ESD) and the Department of Social and Health Services (DSHS). The WA Cares Fund was initially set to begin on January 1, 2022, but was delayed while the Washington legislature made changes and additions to the law.

Beginning July 1, 2023, WA Cares premium collections come into effect. Employers in Washington will be required to collect WA Cares Fund premiums from all employees via mandatory payroll deduction, report employee wages and hours, and pay a quarterly premium. The premium rate for 2023 is 0.58% of each employee’s gross wages, and must be collected from employees whose work is localized in Washington. WA Cares uses the same localization definition as Washington’s Paid Family and Medical Leave (WPFML) program, so employees who are included under WPFML will also participate in WA Cares unless they have an exemption. 

WA Cares benefits will first be payable on July 1, 2026, and will be available to Washington residents who either (1) paid the tax for 5 consecutive years within a 10-year time period or (2) paid the tax for three out of the prior six years before applying for benefits. If eligible and if DSHS determines that an individual requires assistance with at least three activities of daily living, WA Cares provides benefits of up to $100 per day, up to a maximum lifetime limit of $36,500.

Almost all Washington workers will contribute to the WA Cares Fund, but there are some exceptions. Federal employees working in Washington do not contribute to the program, employees of tribal businesses only contribute if the tribe has opted in, and individuals who are self-employed can choose to opt-in. WA Cares is also delayed for employees who are parties to collective bargaining agreements in existence on October 19, 2017, unless and until the existing agreement is reopened or renegotiated by the parties or expires. These collectively bargained employees may, however, voluntarily opt-in to the program before their collective bargaining agreement is reopened, renegotiated, or expired.

Additionally, employees who would otherwise be required to contribute to WA Cares may be eligible for a permanent or conditional exemption. It is the employee’s responsibility to seek an exemption and present an approval letter from the ESD to their employer.  There are various grounds for employee exemptions; please contact a GTH employment attorney if you need more information regarding exemption eligibility.

Employees who had private long-term care insurance on or before November 1, 2021 were able to apply for an exemption from the WA Cares Fund from October 1, 2021 to December 31, 2022. This opt-out provision is no longer available. However, employees who were previously granted this exemption prior to the December 31, 2022 deadline will continue to be exempt.

If you have questions about your WA Cares Fund responsibilities as an employer, employee exemptions, whether an employee is subject to premium collection, or how to communicate these changes to employees, please contact a member of the Firm’s employment law group:  Valarie Zeeck, Shelly Andrew, Amanda O’Halloran, Chelsea Rauch, or Kirsten Parris.