See our December 23, 2021 update to this alert here: Washington Governor Attempts to Clarify WA Cares Fund Premium Collection | Employee Benefits (perkinscoiebenefitsblog.com)
On December 17, Washington Governor Jay Inslee, Senate Majority Leader Andy Billig, and House Speaker Laurie Jinkins issued a joint statement that included the Governor’s intention to direct the State’s Employment Security Department not to collect WA Cares Fund premiums that employers were to start withholding on January 1, 2022 and clear recognition by state lawmakers of a “pause” on premium collections by employers.
WA Cares Fund premiums, in the form of a 0.58% tax on employees’ wages, are intended to fund a trust that will pay long-term care benefits for Washington employees who paid into the program, starting in 2025. Per the joint statement, the Legislature intends to revise the WA Cares Fund during its 2022 session, which will convene on January 10, 2022. Targeted revisions apparently include the program’s long-term funding, what to do for Washington residents who pay into the trust but move out of state, and whether people who have opted out of the WA Cares Fund by buying private long-term care insurance must maintain those policies. At least seven bills addressing the WA Cares Fund have already been pre-filed in the Legislature, including two bills that would create new exemptions to premium assessments, one bill that would create a study of private options to replace the program, and one bill that would repeal the program.
Based on the joint statement, the pause on premium collection should last until the Legislature “sorts through these issues.” Employers that do not withhold and remit premiums to the Employment Security Department will not be subject to penalties or interest for wage withholding failures during this period. For these reasons, companies with affected Washington employees should pause WA Cares Fund premium withholding, pending further action by the Legislature and the Governor.