Benefits for the first-in-the-nation mandatory insurance program known as WA Cares begin on July 1, 2026
Brett Davis
The Center Square Washington
With employers in Washington set to deduct premiums – 58 cents on every $100 earned – from paychecks starting July 1 for the state’s new long-term care insurance program, the groundwork has been laid to collect and invest those funds.
Benefits for the first-in-the-nation mandatory insurance program known as WA Cares begin on July 1, 2026. Workers required to pay into the system will be vested after 10 years and eligible to received a potential lifetime benefit of $36,500 toward paying for in-home nursing care.
“First, I’m happy to report we are ready to commence with the investment program when the initial funds arrive in November,” explained Christopher Hanak, chief investment officer for WA Cares, at Friday’s virtual meeting of the Long-Term Services and Supports Trust Commission.
Made up of legislators, members of administrative agencies, and stakeholder representatives, the commission makes recommendations regarding WA Cares, including actions needed to maintain trust solvency and monitoring agency expenses.
“As a reminder, we’ll be investing the program assets in a fixed-income portfolio that will include credit investments,” Hanak said. “The portfolio will be actively managed and benchmarked against the Bloomberg U.S. Universal Index. That’s a very large fixed-income index.”
The Bloomberg U.S. Universal Index covers U.S. dollar-denominated, taxable bonds that are rated either investment grade or high-yield.
“My assumption was that, you know, we’d start seeing them [funds] in November,” Hanak continued. “We’re set up and ready to go. As funds become available and can be sent to us, the accounts are established and we can be ready to receive and invest as they arrive.”
According to Hanak’s presentation at the meeting, quarterly performance measurements will be presented to the Trust Commission Investment Strategy Subcommittee following the first full quarter of investing after the fund reaches $250 million, which is expected to occur during the first quarter of 2024.
Sen. Steve Conway, D-Tacoma, asked about a reserve fund for the WA Cares program that got off to a rough start.
“The risk-management framework that was adopted by the LTSS Trust Commission is going to consider and develop a reserve for this program, which is just a margin for adverse experience,” Washington State Actuary Matt Smith said.
He also spoke to the program’s short-term cash flow.
“The three-year period between collecting premiums and paying benefits, it’s my understanding that was, you know, intentionally designed to build the short-term reserve you [Conway] are referring to,” Smith said.
The WA Cares payroll tax was supposed to kick in Jan. 1, 2022, but that plan was derailed by lawmakers concerned about people paying into the program who would not be eligible to receive benefits and many people opting out of the program when they had the chance to do so.
In December 2021, Gov. Jay Inslee announced the payroll tax would be delayed until April, unless the Legislature intervened to set a new date. The governor subsequently announced he had no authority to delay the tax, saying that employers were still legally obligated to pay the state.
Last year, the Washington State Legislature passed a bill delaying implementation of WA Cares until July 1 of this year. Inslee signed the legislation into law.
According to a report released last year by the state actuary, WA Cares is predicted to be solvent through 2098.
The 0.58% payroll tax rate can’t go up unless the Legislature votes to increase it.
This report was first published by The Center Square Washington.
Also read:
- POLL: How would you rate the accessibility of Vancouver city officials for addressing community concerns?How accessible are Vancouver city officials to community concerns?
- Budget leader says funding for programs and services is safe, concern is demand for billions in new spendingSen. Lynda Wilson highlights safe funding for services despite looming demands for billions in new spending.
- After evading repeal, will Washington expand its capital gains tax to lower incomes?One member of a prominent Washington think tank suspects lawmakers are considering modifying the capital gains tax to generate more revenue for state coffers Brett DavisThe Center Square Washington A general income tax in Washington state appears to be off the table for now, even as voters retained the state’s capital gains tax by failing …
- Opinion: New audit offers another reason lawmakers should leave the state’s paid-leave program behindElizabeth New (Hovde) critiques Washington’s Paid Family and Medical Leave program, highlighting audit findings of double-dipping and program inefficiencies.
- Opinion: WA turns redder, despite faulty media reports that said otherwiseWAGOP highlights gains in Washington’s November 2024 election, challenging claims the state turned “bluer.”
- Vancouver City Council to host community forum on Nov. 25Vancouver City Council invites community members to share questions and ideas at a public forum on Nov. 25 at Evergreen Public Schools.
- Vancouver Public Schools to run Technology, Safety, and Capital Projects Levy on February ballotVancouver Public Schools Board approves a Technology, Safety, and Capital Projects Levy for the February 2025 ballot to support long-term needs.