On January 27, 2022, Governor Inslee signed House Bill 1732 and House Bill 1733 amending the WA Cares Act, which provides long-term care insurance funded by a payroll tax. Prior to the amendments, employers were required to collect the payroll tax beginning January 1, 2022. However, some employers paused their collection of the payroll tax based on statements made by the Governor, legislators, and the Employment Security Department that the law would be changed during the 2022 legislative session.
House Bill 1732 delays the implementation of the program by 18 months (to July 1, 2023) to allow for the extension of benefits to persons born before January 1, 1968, modifies the conditions for becoming a qualified individual and eligible beneficiary, and allows for the refunding of premiums that were collected based on the original law, which previously required premium collections to begin on January 1, 2022.
House Bill 1733 allows certain employees who are unlikely to benefit from the program to seek a voluntary exemption.
Employers who collected premiums based on the original law should be aware of the following requirements to refund the premiums:
Any premiums collected from the employee prior to July 1, 2023, shall be refunded to the employee within 120 days of the collection of the premiums. If the premiums were collected but not yet remitted to the employment security department, the employer shall refund the collected premiums to the employee. If the collected premiums were remitted to the employment security department, the employment security department shall refund the premiums to the employer within 120 days of the collection of the premiums, who shall then return any premiums collected from the employee.
There may be additional changes to the law between now and when premium collections begin in 2023, as there are some questions about fairness and about the financial viability of the program that remain unresolved.
Links to House Bill 1732 and 1733 are below:
- https://lawfilesext.leg.wa.gov/biennium/2021-22/Pdf/Bills/Session%20Laws/House/1732-S.SL.pdf?q=20220128171203
- https://lawfilesext.leg.wa.gov/biennium/2021-22/Pdf/Bills/Session%20Laws/House/1733-S.SL.pdf?q=20220128171234
This article is not legal advice and should not be relied on for any purpose, as it is a brief summary of a complex subject. If you have any questions, feel free to contact Karen Sutherland at ksutherland@omwlaw.com.
