The “WA Cares Fund”

Formerly known as: Washington State Long-Term Care Trust Act

The passage of the Long-Term Care Trust Act – effective January 1st, 2022 – makes Washington the first state in the nation to create a publicly funded insurance program, providing working residents of Washington an opportunity to vest into a basic level of LTC benefits. Originally advertised as the Washington Long-Term Trust Act, it will now be known as the “WA Cares Fund”. The program will be financed by Washington State W-2 workers through payroll deductions – $0.58 for each $100 earned.

Employees who own long-term care insurance can apply for an
exemption from the premium tax. SHB 1323, as amended on April
10th, 2021, specifies employees who apply to opt-out of the LongTerm Services and Supports Trust Program, also known as the “WA
Cares Fund”, must attest to having long-term care insurance prior
to November 1, 2021.


• Beginning January 1st, 2022 each W-2 employee will pay a
premium tax through payroll deduction.

• An initial premium rate will be 0.58% of the individuals’ wages.

• Wages will be taxed without limitation or a capped amount.

• To qualify for an exemption from the payroll tax, an employee
must purchase private long-term care insurance prior to
November 1st, 2021, and apply for the exemption during the
limited period from October 1st, 2021 through December 31st
2022 – and be approved.

• Maximum lifetime benefits are $36,500 per person (adjusted
annually) for vested individuals.

• LTC benefits under this program are available only for care
provided in Washington for Washington State residents and are
not transferable.

• There is an option for self-employed individuals to elect coverage
and be a part of the program

Opting-Out of the Program

An employee who attests they have long-term care insurance (LTC)
purchased prior to November 1st, 2021 has the option to apply for
an exemption from the premium tax. Note that once the employee
is determined to be exempt, they may not later apply to become a
qualified individual or eligible beneficiary and will be permanently
ineligible for coverage under the program.

• The employment security department will accept
applications for the exemption only from October 1st, 2021
through December 31st, 2022.

• Employees must be age 18 and older to apply for the

• The tax is assessed through payroll deduction; therefore, it
is the responsibility of the employee to provide written
notification and a copy of the letter approving their
exemption to all current and future employers.
What qualifies as “long-term care insurance”?
According to rules proposed by the Employment Security
Department, an employee who attests to having long-term care
insurance “as defined in RCW 48.83.0201”, may apply for an
exemption. This Code defines “long-term care insurance” to
generally include (but is not limited to):

• Long-term care riders on annuities and life insurance
(which would include linked benefit LTC policies)

• Qualified long-term care insurance contracts

The long-term care riders or policies purchased under
group coverage

Chronic illness riders are not called out in RCW 48.83.020. While
it is possible some chronic illness riders may qualify depending on
their structure, further clarification from the state of Washington is
clearly needed.

You may refer to the State of Washington Second Substitute House
Bill 10871, Substitute Senate Bill 62672, and Substitute House Bill
13234 for additional information. The Washington State Trust
Commission is solely responsible for approving exemptions from
the 0.58% payroll tax.

Carter Gray, Chartered Life Underwriter®


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The “WA Cares Fund”

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