WA Long Term Care Trust Act

Although a number of states have toyed with the idea of a publicly-funded LTC benefit, including Hawaii and Minnesota, the state of Washington was the first to succeed, when Governor Jay Inslee (D-WA) signed the LTC Trust Act into law effective July 28th, 2019 following approval in the House (55-41) and Senate (26-22). As the first-of-its-kind program in the nation, we're sure you have questions...

What

  • Long-Term Services & Supports ("LTSS") benefit which is publicly funded by a 0.58% payroll tax on all wages and remuneration, withheld quarterly by employers
  • Benefit is vested by individuals who work a minimum of 500-hrs/yr who pay premiums for at least 10 years (without a break of 5 consecutive years) OR who pay premiums for 3 of the last 6 years
  • Benefits are paid directly to providers at Medicaid-comparable rates

Who

  • Mandatory for all W-2 employees in Washington State
  • Self-employed and independent contractors may "opt-in"
  • Those who are currently retired may not pay premiums or qualify for benefits
  • Those under age 18 may not participate
  • Owners of private LTC insurance may "opt-out" of the program permanently by applying for an exemption between October 1st, 2021 and December 31st, 2022

When

  • Statewide employer education will begin during 2020 - 2021
  • First payroll deductions begin January 1st, 2022
  • Public outreach will begin in 2024
  • First claim for benefits can begin on January 1st, 2025
  • Trust Act Commission will issue its first report on participation, benefits paid and Medicaid savings on January 2nd, 2026

Where

  • Only Washington residents can qualify for benefits
  • Residents who move out of state for 5 or more years forfeit both benefits and premiums

Why

  • Washington will spend $4B/year on Medicaid-funded LTC by 2030
  • The state's 850,000 unpaid family caregivers face financial insecurity: nationally, 20% of family caregivers spend an average of 20% of their own income on out-of-pocket caregiving costs
  • Family caregivers who leave work lose an average of $300,000 in income and benefits

FAQs

How does the Trust Act work?

  • Benefits are paid in $100 "stackable" units, up to a $36,500 lifetime maximum
  • Beneficiaries must need assistance with a minimum of 3 of 10 Activities of Daily Living ("ADLs"): medication management, personal hygiene, eating, toileting, transferring, body care, bathing, ambulation/mobility, dressing, and cognitive impairment
  • Providers must be on a Dept of Social and Health Services-approved list

Which kinds of LTSS services are covered?

  • Funds can be spent on nursing facilities, residential settings like assisted living and adult family homes, professional caregiving like home health care, wheelchair ramps, emergency alert devices, medication reminders, training for family, Meals on Wheels, rides to doctor appointments, dementia education, caregiver support, care coordination
  • Family members may qualify upon receiving 21 - 35 hours of formal training (depends on situation)

Will benefits increase to keep pace with inflation?

  • Each year, benefits will be reviewed and may be raised at a rate "no greater than the Washington Consumer Price Index"

Will rates increase?

  • Although designed to remain level, there is no guarantee that the payroll tax will remain fixed
  • The first payroll tax review will occur on January 1st, 2024 by the Pension Funding Council

Do linked-benefit, life with accelerated riders for LTC, or short-term care policies qualify for an exemption?

  • As presently written, the law limits the exemption to "long-term care insurance"

Where can I read the full text of the Trust Act for myself?

  • The Washington State Legislature houses links to both the "adopted and engrossed" version of the Bill (1087-S2 AMS ENGR S3352.E), as well as an amendment (SB 6267) which was subsequently passed, and substantially modified the original Bill.

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