State Sens, Ron Muzzall, R-Whidbey Island (left), Simon Sefzik, R-Ferndale (center left), Keith Wagoner, R-Sedro-Woolley (center right), and Chris Gildon, R-Puyallup (right), confer on the floor of the Senate during a recess Wednesday at the Capitol in Olympia. (AP Photo/Ted S. Warren)

State Sens, Ron Muzzall, R-Whidbey Island (left), Simon Sefzik, R-Ferndale (center left), Keith Wagoner, R-Sedro-Woolley (center right), and Chris Gildon, R-Puyallup (right), confer on the floor of the Senate during a recess Wednesday at the Capitol in Olympia. (AP Photo/Ted S. Warren)

House passes pause to state’s long-term care program and tax

The measure would delay the tax until July 2023, and would refund any premiums collected before then.

By Rachel La Corte / Associated Press

OLYMPIA — Nearly three years ago, Washington became the first state in the nation to establish a defined benefit to help offset the costs of long-term care. Now, lawmakers are quickly moving to delay implementation amid concerns about long-term solvency of the program and criticism of the timing of the payroll tax that pays for it.

The lifetime maximum of the benefit is $36,500, with annual increases to be determined based on inflation, and the program is funded by workers, who pay a premium of .58% of total pay per paycheck.

On a 91-6 bipartisan vote, the Democratic-led House on passed one measure that would delay the tax — which was supposed to start being collected by employers this month — until July 1, 2023 and would refund any premiums that were collected before that date. Collection of the benefit to pay for things like in-home care, home modifications like wheelchair ramps and rides to the doctor would be delayed from Jan. 1, 2025 until July 1, 2026.

Additionally, people born before Jan. 1, 1968 who do not become vested in the program because they do not pay the premium for 10 years could qualify for partial benefits under the bill.

Democratic House Majority Leader Pat Sullivan said that the pause was necessary “to ensure that the program is as effective and efficient as we can make it, so that we can guarantee those benefits to our residents throughout the state.”

Republicans, who note that the delay comes as Democrats look at a potentially tough election year, have argued that the state should focus on working to make private industry plans more affordable for those who want to buy them.

Republican lawmakers attempted to pull a few of their bills out of committee to the floor, including a bill that would repeal the underlying program out of committee and to the floor, but the motions failed.

Several Republican amendments offered on the floor, including one that would require voter approval of the program in order for the payroll tax to take effect in July 2023, were either ruled out or order or rejected.

Republican Rep. Joe Schmick said that he still had multiple concerns, including the lack of portability of the benefit for those who pay in for years but may retire out of state. But he said he was voting for the delay with the understanding that “we need to fix some of the problems that are associated with this bill and if we’re going to do it we need to do it correctly.”

Under an update to the law passed by the Legislature last year, people who wanted to opt out of the state-managed program had to have a private long-term care insurance plan in place before Nov. 1, 2021 and then apply for an exemption.

Modeling by the consulting firm Milliman in December 2020 showed various scenarios of opt-out structures, with the baseline one finding that 3% of wage earners responsible for about 10% of wages in 2022 would opt out at the start of the program. Under that scenario, a premium assessment of .66% would be required to keep the program solvent through 2096.

More than 460,000 people — or approximately 13% of the state’s workforce — have opted out of the program.

In December, Gov. Jay Inslee announced the state wouldn’t collect the assessments from employers before April, and employers were encouraged to not collect the tax before lawmakers figured out a plan.

His announcement came a few weeks after Senate Democratic leaders sent him a letter asking for the delay while expressing continued support for the intention of the program, called WA Cares Fund.

In addition to the concerns raised about exemptions and portability, the lawmakers said the program needs to be looked at “through the lens of the pandemic.”

“As our state and nation continue to grapple with Covid-19 and support a healthy financial recovery for everyone, now is not the time to add a payroll deduction, even for a critical need,” they wrote. “We know Washingtonians face challenges with housing, childcare and other costs during this recovery and we do not want to add another at this difficult time.”

Another bill passed Wednesday would allow people who work in Washington but live in other states to opt out, along with spouses or partners of active military members and temporary workers with nonimmigrant visas. That bill passed on a 67-29 vote, with some Republicans arguing that if the law is going to stay on the books, solvency issues need to be addressed before more people can opt out.

Both measures now head to the Senate, which is expected to pass them as early as next week.

Talk to us

More in Northwest

FILE - Randy Weaver, the object of the Ruby Ridge siege, visits with the media at the main FBI roadblock outside the Freemen compound in Montana on April 27, 1996. Weaver, patriarch of a family that were involved in an 11-day Idaho standoff in 1992 with federal agents that left three people dead and served as a spark for the growth of anti-government extremists, has died at the age of 74. His death was announced Thursday, May 12, 2022, in a Facebook post by daughter Sara Weaver, who lives near Kalispell, Montana. (AP Photo/Jim Mone, File)
Randy Weaver, participant in Ruby Ridge standoff, dies at 74

The 11-day standoff in the Idaho Panhandle mountains transfixed the nation in August of 1992.

FILE - Washington Attorney General Bob Ferguson speaks March 23, 2022, at the Capitol in Olympia, Wash. Months into a complex trial over their role in flooding Washington with highly addictive painkillers, the nation's three largest opioid distributors have agreed to pay the state $518 million. Ferguson announced the deal Tuesday, May 3, 2022. (AP Photo/Ted S. Warren, File)
DNA from 372 state sex offenders added to national database

Officials have been unable to collect samples from some offenders, including three in Snohomish County.

Andrew Cain Kristovich (Snohomish County Sheriff's Office)
Oregon fugitive with Snohomish County ties arrested in Nevada

Andrew Cain Kristovich escaped from a federal prison camp in April. He was considered armed and dangerous.

FILE - In this Monday, March 1, 2021 file photo, The first Alaska Airlines passenger flight on a Boeing 737-9 Max airplane takes off on a flight to San Diego from Seattle-Tacoma International Airport in Seattle. A Boeing pilot involved in testing the 737 Max jetliner was indicted Thursday, Oct. 14,2021 by a federal grand jury on charges of deceiving safety regulators who were evaluating the plane, which was later involved in two deadly crashes. (AP Photo/Ted S. Warren, File)
Alaska Airlines to keep canceling flights at high level for weeks

Flight cancellations since April will continue. The chaos has been damaging for Seattle’s hometown airline.

Barbara Williams, center, holds an umbrella for her mother, tribal chair Cecile Hansen, right, as they prepare to join other members of the Duwamish Indian Tribe in performing an "honor song" Wednesday, Feb. 27, 2008 near a location in Seattle where bones were found during construction activities near the Pike Place Market. The song was performed because the tribe felt at the time that the remains could have been from an ancient member of the tribe, but city authorities said later in the day that the remains appeared to have been from a small animal. (AP Photo/Ted S. Warren)
Duwamish Tribe sues again for federal recognition

Tthe lawsuit demands the court set aside the denial of recognition in 2015 by the Obama administration.

A pod of transient orcas, known as T124As, surfacing near Tacoma. (Craig Craker/Orca Network)
Sightings of mammal-eating orcas increasing in Puget Sound

The killer whales enjoy a diet of harbor seals, sea lions, porpoises and the occasional bird or squid.

FILE - Bill Gates discusses his book "How to Prevent the Next Pandemic" at the 92nd Street Y on May 3, 2022, in New York. Microsoft co-founder and billionaire philanthropist Bill Gates posted on Twitter on Tuesday, May 10, 2022, that he tested positive for COVID-19. He said he was experiencing mild symptoms and was following the experts' advice by isolating until he is healthy again. (Photo by Evan Agostini/Invision/AP, File)
Bill Gates says he has COVID, experiencing mild symptoms

The billionaire philanthropist said he will isolate until he is again healthy.

FILE - Idaho Lt. Gov. Janice McGeachin enters the house chambers at the state Capitol building on Jan. 10, 2022 in Boise, Idaho. McGeachin, a GOP candidate for governor, on Monday, May 9, 2022, called on incumbent Republican Gov. Brad Little to call a special session to eliminate rape and incest as legal exceptions to Idaho's abortion law. The law would go into effect if the U.S. Supreme Court overturns Roe v. Wade. (AP Photo/Otto Kitsinger, File)
Idaho lieutenant governor wants harshest U.S. abortion ban

Janice McGeachin is angling for state lawmakers to eliminate exceptions for rape and incest.

Crews finish clearing the roadway on SR 20. (Washington State Department of Transportation)
The North Cascades Highway is set to open Tuesday

Officials warn that it’s still wintery and avalanche potential remains in the backcountry.

50 dams in state — including 4 in Snohomish County — need repairs

Deferred maintenance and the changing climate may play a role in the dams’ deteriorating conditions.

(U.S. Department of Agriculture)
State’s 2nd outbreak of bird flu confirmed in Spokane County

Last week the disease was found in Pacific County, also in a backyard flock of chickens.

Tina Podlodowski, chair of the Washington State Democratic Party, is making a case for Washington to be among the first five states to host a presidential primary in 2024. (Washington State Democrats)
Washington Democrats seek to host early presidential primary

A letter of intent was sent to the Democratic National Committee’s Rules and Bylaws Committee.