Opinion: ‘The governor and Democratic leaders are promising amendments to help a poorly written law that they supported and that has outraged workers’

Elizabeth Hovde of the Washington Policy Center provides an update of the long-term care insurance law and payroll tax in Washington

Elizabeth Hovde
Washington Policy Center

Hundreds of thousands of Washingtonians — more than were expected — have applied for an exemption from the WA Cares Fund and its payroll tax of 58 cents per $100 of income starting in January (maybe — read on).  An exemption was available if you had your own private long-term-care insurance, purchased by Nov. 1, and then got approval from the state.

Here’s what the WA Cares Fund exemption picture looked like as of Dec. 29:

• Total exemption applications received: 462,761
• Total applications processed: 462,526
• Applications processed as percentage of total: 99.9 percent

Note the good news in those numbers: 99.9 percent of exemption applications have been processed. Good work, Employment Security Department. There was worry that the avalanche of applications could not be handled by ESD in the three-month window it had to make good on the task. 

Because of a governor-announced delay of the WA Cares Fund on Dec. 17, some workers who are not exempt still won’t see their paychecks go down in January, but others will, given inadequate and confusing advice from the state to employers about how to handle the delay and the governor’s promise of tweaks to the long-term-care law during the upcoming legislative session. 

The bottom line that I see? The governor and Democratic leaders are promising amendments to help a poorly written law that they supported and that has outraged workers. To quiet that outrage, for now, I think they will amend the law in ways that will impact who is eligible for the fund’s lifetime benefit (think an ability for near-retirees to see some return on their money) and who can receive an exemption automatically without having long-term-care insurance of their own (think workers who live out of state). 

Even amendments that help glaringly unfair eligibility provisions will not fix this misguided law, which only really helps the state budget and the Legislature’s misplaced legislative priorities and spending problem. The law creates an expansive safety net for people in need and people not in need. It eliminates worker’s choices about how to save for and invest in long-term care, and it hurts families’ budgets at a horrible time. We urge the law be repealed. 

Read more about the WA Cares Fund, the state’s mandatory long-term-care program and payroll tax, on the state’s website and in my prior blogs and opinion pieces. And read more about the latest challenges to the WA Cares Fund here and here. They include proposed bills repealing the law that created the fund, a lawsuit against it, a proposed initiative making the fund opt in instead of opt out, and a cease-and-desist order concerning Washington workers who live out of state. Despite all of this, employers should be ready to comply with the tax in January, and workers should be ready to see an impact on their wages.

If you’re among those who have been approved for exemption, remember that you need to show that approval letter from the state to your employer. 

Elizabeth Hovde is a policy analyst and director of the Centers for Health Care and Worker Rights at the Washington Policy Center. She is also a Clark County resident.