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Thousands apply for exemption from Washington’s long term care tax

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FILE – In this April 26, 2017 photo, the Washington State Capitol, also known as the Legislative Building, is seen in Olympia, Wash. A push by media groups to gain access to records created by Washington lawmakers is before the state’s highest court. The Washington Supreme Court is set to hear oral arguments Tuesday, June 11, 2019, in a case that will determine whether state lawmakers are subject to the same disclosure rules that apply to other elected officials under the voter-approved Public Records Act. (AP Photo/Elaine Thompson, File) Elaine Thompson/AP

Thousands apply for exemption from Washington’s long term care tax

October 15, 12:00 PM October 15, 12:00 PM

Some 95,000 residents in Washington state applied for exemptions from a new tax aimed at funding a new long-term health care insurance program.

Those applications came between Oct. 1 and Oct. 8, the first week people could opt out, according to the state Employment Security Department.

On Oct. 1, the first day people could apply for such an exemption, the website crashed before noon and was down for several hours. The department over the summer estimated that as many as 310,000 were expected to opt out.

The WA Cares Fund, as the program is known, imposes a 0.58% payroll tax on workers’ total earnings with no salary cap, beginning Jan. 1, 2022. Those who obtain a private long-term care insurance policy by Nov. 1 can request an exemption. Workers who are self-employed can opt in to the program but are not required to do so.

Starting in 2025, participants will be eligible to receive a maximum of $36,500 in long-term care benefits. The money can be used for things such as nursing home care, home-delivered meals, and dementia support.

To be eligible, a resident must have been working at least 500 hours per year and paying into the fund at least three of the previous six years. People must also need assistance with at least three activities of daily life, such as eating, bathing, dressing, or medicine management.

Demand for private long-term care policies was so high over the summer that insurance companies temporarily put a halt to selling them in the state.

While a private policy would cost several thousand more dollars per year than the payroll tax, they also offer significantly higher benefits.

According to the Washington Office of Insurance Commissioner (OIC), there are 10 companies licensed to sell stand-alone private policies in the state and another 22 that can sell long-term care policies as riders on life insurance policies.

The OIC in August said one company, whose name it did not reveal, had already received 66,000 applications for long-term care policies since the beginning of the year. The same company sold 8,000 such policies in Washington during 2020.

The American Association for Long-Term Care Insurance says about 48,000 policies are sold nationwide each year.

The two most visited pages on the OIC website, “What qualifies as long-term care insurance?” and “Long-term care insurance companies approved to sell in Washington state,” were averaging some 10,000 views per day over the summer.

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