WA Cares Fund – Premium Delay and New Exemption Categories

01/31/2022 Written by: AP Compliance Department

On January 27, 2022, Governor Jay Inslee signed into law two bills, SHB 1732 and SHB 1733, that delay the start of many WA Cares program activities, including delaying the start of employee premium payroll deductions by 18 months.  The bills also provide near-retirees with less than ten years before retirement the ability to vest in WA Cares on a prorated basis.  Finally, the new bills establish new exemptions for:

  • Washington workers who maintain a primary residence outside the state,
  • Certain veterans, spouses and domestic partners of military service members, and
  • Non-immigrant temporary workers


Substitute House Bill 1732

Effective Date: SHB 1732 contains an emergency clause and takes effect immediately.

  • Delays the start date for premium assessments under the Long-Term Services and Supports Trust Program (the LTSS Trust Program, also known as WA Cares or the WA Cares Fund) from January 1, 2022, to July 1, 2023The bill requires employers to refund employees any LTSS Trust premiums collected within 120 days of collection;
  • Delays the date benefits become available under the LTSS Trust Program from January 1, 2025, to July 1, 2026;
  • Delays the start of the first actuarial audit and valuation of WA Cares from January 1, 2024, to July 1, 2025;
  • Allows individuals born before January 1, 1968, who do not meet the program’s permanent ten-year vesting requirement, to receive partial benefits based on the number of years of premium payments. These individuals may receive 10 percent of the maximum benefit for each year they worked at least 500 hours and paid the premium.  (Individuals may also collect under the program’s short-term vesting qualification if they have paid program premiums for three years within the last six years from the date of application for benefits).

Note that the bill did not provide any extension of the December 31, 2022 due date to submit an application for program exemption due to purchase of a private LTC policy before November 1, 2021. In addition, the WA Cares Fund website reminds employers that during this postponement period they should continue to maintain copies of exemption approval letters for workers who’ve provided them.


Substitute House Bill 1733

Effective Date: SHB 1733 takes effect 90 days after March 10th adjournment of the 2022 Legislative regular session.

This bill establishes four new exemption categories for the WA Cares program.

Beginning January 1, 2023, an employee may apply to the Employment Security Department (ESD) to be exempted from the LTSS Trust Program if they are:

  • Employed by a Washington employer, but have a permanent address and primary residence out of state;
  • A veteran of the United States military who has been rated by the United States Department of Veterans Affairs as having a service-connected disability of at least 70 percent;
  • A spouse or registered domestic partner of an active-duty service member of the United States Armed Forces;
  • Working under a non-immigrant visa for temporary workers and employed by an employer in Washington.

An employee who receives an exemption is permanently ineligible from receiving LTSS Trust Program benefits unless their exemption is discontinued because they no longer meet the exemption criteria.  An employee who has been exempted under one of the four new categories noted above, but no longer meets the exemption criteria must notify ESD and their employer within 90 days.  Premiums must be assessed once the employee notifies their employer and ESD they no longer meet the exemption criteria.  If the employee fails to begin paying premiums within 90 days of no longer meeting the exemption criteria, the employee must pay any unpaid premiums, with interest, from the date on which the premiums should have begun.

ESD will need to enact rules and procedures to support the administration of these new exemption categories.


Other 2022 legislative session activities related to the WA Cares Fund - No other substantive bills related to the WA Cares program are expected to pass this legislative session.  However, additional changes to the WA Cares program are being contemplated by legislators and may be addressed in bills introduced in the next 2023 legislative session, which will also take place during the 18-month WA Cares premium assessment delay.  Among the program revisions the legislature may consider in 2023, based on issues identified by the LTSS Trust Commission, are:

  • A Constitutional amendment regarding the investment of WA Cares funds in equities and bonds and similar financial instruments;
  • Creation of an exemption recertification process which would require holders of private LTC policies to provide evidence of current coverage in order to maintain their program exemption;
  • Consideration of benefit portability for individuals who qualify for coverage and leave the state.


Whether to Maintain Private LTC Insurance - Many individuals purchased private LTC coverage in order to apply for a permanent WA Cares Fund participation exemption. Given the passage of SHB 1732 and 1733, some may question whether to cancel or stop premium payment for their existing LTC insurance policy.  Canceling an in-force LTC policy at this time may put an individual at significant risk of being required to pay the premium tax in the future.  The LTSS Trust Commission has recommended that the legislature consider establishing an exemption recertification process to require ongoing proof that an individual has maintained an in-force LTC insurance policy. Democratic legislative leaders indicate an intention to consider future legislation to “assure that those who have opted out of the program maintain their private insurance.”  In addition, nothing in current statutes provides for future exemption application periods. Unless a new law is passed, the 2021 opt-out was a one-time opportunity. Individuals who may be considering cancelling a private LTC policy should consider all the potential ramifications, including the possible future loss of exemption status, by doing so.


Please contact a member of your AssuredPartners service team with any questions or requests for assistance.

This bulletin is provided for informational purposes only and may not be construed as legal or tax advice.

Equipping Managers to Tackle Employee Burnout: Strategies for a Thriving Workforce
Employee Benefits05/17/2024

As organizations grapple with the alarming rise in employee burnout, a key piece of the puzzle is providing managers with the right support, tools, and strategies. A recent global survey by McKinsey...

IRS Announces HSA and HDHP Limits for 2025
Employee Benefits05/10/2024

IRS Announces HSA and HDHP Limits for 2025 Each year around this time the IRS announces the inflation-adjusted limits for Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs), as...

Addressing the Income Insurance Gap
Employee Benefits05/09/2024

Across the United States, there is a widening coverage gap between income received and income insured amongst the American workforce. Many Americans underestimate the chance that they or someone in...