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Possible changes coming to Washington’s Long-Term Services and Support Trust program

AGC members should remember that premium assessment on employees’ wages to fund the state’s new long-term care program begins January 1, 2022. Meanwhile, the Legislature is working on legislation that could dramatically impact whether and when employers and employees could opt out of the program.

In 2019, the Legislature established the Long-Term Services and Supports Trust (LTSST) Program, which will provide up to $36,500 in lifetime benefits for eligible beneficiaries to apply to the cost of their long-term care. The LTSST Program is funded through a 0.58-percent premium assessment on an employee’s wages, paid by employees. The premium assessment begins January 1, 2022, and eligible beneficiaries may begin receiving benefits on January 1, 2025. As adopted in 2019, to be eligible to receive these benefits from this program, an individual needs to a Washington resident, at least 18 years old, not disabled before the age of 18, assessed as needing assistance with at least three activities of daily living, and paid into the program for either three of the last six or years or a total for ten years with no more than a five-year interruption.

Also, a part of the original intent of the bill was to allow employees to opt-out as they acquire long-term care service products with the understanding that the program would support those who need services and who did not have long-term care coverage for a short period of time until they became eligible for other long-established programs such as Medicaid. The bill that passed in 2019 would save the state money because it would encourage more people to purchase private long-term care products that provide richer benefits than the long-term care trust’s limited $36,500 lifetime maximum, support those most in need of long-term care services for a short period of time and stimulate the private market for long-term care products.

In 2021, House Bill 1323 was introduced that would make substantial changes to the program to increase funding for the trust by collect payroll taxes from people who would be ineligible for the program. As originally introduced the bill would require employers and/or employees to purchase long-term care coverage by July 25, 2021, if they wished to opt-out. Once this date passes, there would be no other opportunity to opt out. This creates several disadvantages for new employees, employees at the end of their career, and high-wage earners.

Last week, the State Senate adopted a couple of amendments which makes improvements to the bill as it was originally introduced.  The first amendment would extend the date by which a person must purchase long-term care insurance to opt out of the program to November 1, 2021. The second amendment requires:

– the LTSST Commission to work with insurers to develop long-term care insurance products that supplement the LTSST program’s benefit.

– ESD and DSHS to jointly develop and implement an outreach program to provide employers with educational materials to ensure that employees are aware of the program and that premium assessments will begin on January 1, 2022.

– Outreach be implemented by October 1, 2021, information to be posted on a public website and made available in English, Spanish, Vietnamese, Cambodian, Laotian and Chinese. 

We will continue to update you on this legislation as it continues to work its way through the legislative process. Questions? Contact Michele Willms.

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