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AGC urges changes to long-term care program; taxes begin Jan. 1

AGC urges changes to long-term care program; taxes begin Jan. 1

— AGC and a broad coalition of business and labor groups are calling on the Governor and legislative leaders to address concerns with the Long-Term Services and Supports Trust (LTSST). 

As discussed in previous AGC Works articles, the Legislature established the LTSST program in 2019.  The program provides up to $36,500 in lifetime benefits for eligible beneficiaries to apply to the cost of their long-term care. The LTSS Trust Program is funded through a 0.58 percent premium assessment on an employee’s wages. The premium assessment begins Jan. 1, 2022, and eligible beneficiaries may begin receiving benefits on Jan. 1, 2025.  Those subject to the tax can opt out if they have or purchase an as-good-or-better private long-term care plan by Nov 1.  But the availability of such plans on the private market is quickly drying up as private insurers have been inundated with requests.

Among the concerns raised by the coalition:

  • There is no clear definition of which long-term care products qualify for the opt-out.
  • Near-term retirees and Washington state workers who live in border states will be required to pay into the program without ever realizing a benefit.
  • The opt-out process will not be operational in time for Washington residents who have long-term care coverage to avoid paying the payroll tax beginning Jan. 1, 2022.
  • Securing long-term care coverage has been extremely difficult for Washington state residents for the following reasons:
    • The purchase by date for long-term care coverage, Nov. 1, 2021, did not provide enough time for people to secure coverage, which in turn caused a collapse in the long-term care market forcing carriers to suspend sales due to the high volume of requests.
    • There is not a recertification process included in the opt-out provision allowing people to secure long-term care coverage for opt-out purposes and cancel coverage once the lifetime opt-out authorization has been received.

In its letter to the Governor and legislative leaders, the coalition says it “…supports the goal of giving Washington residents options to provide for long-term care. However, the current status of the Long Tern Services and Supports Trust does not provide options but instead creates obstacles. We encourage you to convene bipartisan legislative leadership to discuss and consider pausing the implementation of collection of the payroll tax beginning Jan. 1, 2022, so that the listed concerns can be addressed, and a program can be developed that provides options to Washingtonians.”

As of press time the coalition had not received a response, but AGC will keep members posted. For more information, contact AGC chief lobbyist Jerry VanderWood, 425.279.3755.

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