Inslee Agrees To Delay Long-Term Care Tax Collection

OLYMPIA, WA — A payroll tax scheduled to take effect on Jan. 1 will be delayed, allowing state lawmakers to make changes to the law before premiums are due.

Gov. Jay Inslee and state Democratic leaders announced a pause in the rollout of the Washington Cares Fund, a first-of-its-kind program that would provide up to $36,500 for eligible Washingtonians, including seniors, disabled people and those battling serious illnesses. The funds can be used to help pay for things like assisted living, at-home care and other long-term needs.

The program is paid for by a 0.58 percent payroll tax, with funds available starting in 2025.

As The Seattle Times reports, some have criticized the tax as too broad, applying both to people who work in Washington but live elsewhere, and those who will pay into the program, then move or retire out of state.

Earlier this month, legislative leaders sent a letter to Inslee asking him to delay the tax for another year, allowing state lawmakers to make needed tweaks.

On Friday, Inslee released a statement with state Senate Majority Leader Andy Billig (D-Spokane) and House Speaker Lautie Jinkins (D-Tacoma), announcing an agreement to pause collection on the tax over the upcoming legislative session.

Inslee wrote Friday:

"I have been in ongoing discussions with legislators about the long-term care bill, which is set to begin collecting funds in January. This bill will help provide much-needed care and coverage for Washingtonians as they age. However, legislators have identified some areas that need adjustments and I agree. We need to give legislators the opportunity to make refinements to the bill. Therefore, I am taking measures within my authority and ordering the state Employment Security Department not to collect the premiums from this program from employers before they come due in April. My actions mean that the state will not collect those funds until the Legislature sorts through these issues. While legislation is under consideration to pause the withholding of LTC fees, employers will not be subject to penalties and interest for not withholding fees from employees' wages during this transition."

During the pause, the state's Long Term Care Commission will develop recommendations for how the law should handle people who move out of state and firm up the process for opting out of the tax.

In a joint statement, Sen. Billig and Rep. Jinkins encouraged Washington employers to pause plans to collect premiums until new legislation is passed and dates are set.

"Delaying implementation of the Washington Cares Fund premium assessment through the 2023 legislative session allows the Legislature time to pass the policy reforms that are ready to go now and to consider further recommendations from the Long Term Care Commission. In addition to delaying the premium assessment, we also support employers pausing premium collections from employees in Washington so lawmakers can take necessary action. While we cannot direct employers not to collect, we strongly encourage them to pause on collecting premiums from employees, giving us time to pass legislation extending implementation dates until next year. We know that this extra time will allow us to find solutions and craft updates to the Fund that allows Washingtonians to age with dignity in their own homes."