The somewhat tortured path of the Washington state long-term care requirements continues.

As a reminder, in April 2021 the Washington State legislature passed a law requiring individuals to (1) pay into a long-term care fund or (2) opt out of paying into the fund by proving that they have other long-term care insurance.

Last month, due to several complications in the law, Governor Inslee directed the Employment Security Department to suspend collecting the tax, in order to give the State legislature time to address some issues. To that end, the State legislature passed two (2) additional bills that the Governor has signed into law. The bills provide as follows:

• Employers who have already withheld the tax will need to issue a refund to employees in the amount withheld within 120 days when the amount was collected. Further, the Employment Security Department must, in the same time frame, refund any submitted taxes to the employer who must then return it to the individual. 

In addition, these laws attempt to address some of the challenges created by the initial law by:

• Allowing an individual born before January 1, 1968, who has not met the 10-year vesting requirement, to receive partial benefits if certain conditions are met.
• Expanding the reasons an individual may apply for an exemption, such as for the spouse or registered domestic partner of an active-duty service member or for an individual who works in Washington but whose permanent residence is outside of Washington.  

Finally, as a reminder, a class action lawsuit to challenge the long-term care program was filed in November 2021 and continues to wind its way through the courts. Employers employing individuals in Washington will want to keep an eye on the continuing evolution of this law.

Article date: February 2022

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