Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

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johan851
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by johan851 »

LFT_PFT wrote: Wed May 19, 2021 12:57 pm The policy is explicitly described as long term care (not life insurance) in multiple employer benefit documents and includes policy description of long term care. The coverage amount is quite small. Although, the coverage maximum of $36k ($1k x 36 months) is similar to this new WA Cares maximum of $36.5k. The policy is through Unum. The coverage is minimal, but allows employer to list benefit and is obviously an effort by Unum to get employees to increase coverage.

It seems the employer provided long term care (group long term care insurance) meets the state definitions from points 6 & 7:

https://app.leg.wa.gov/RCW/default.aspx?cite=48.83.020

Anyone else in similar situation? Thoughts?
I found a Genworth policy at group rates for my employer that came out to $20/mo. $2,250 / mo max benefit over two years max for $54,000 total maximum coverage. No inflation adjustment.

It is definitely at LTC policy as far as I can tell. "Contract for Long Term Care Insurance". Maybe I'm just getting an incredibly good group rate? Or maybe it's going to jump up once they process my application...
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

LFT_PFT wrote: Wed May 19, 2021 12:57 pm
WoW2012 wrote: Tue May 18, 2021 5:29 pm
LFT_PFT wrote: Tue May 18, 2021 5:05 pm Does anyone know whether an employer provided long term care policy ($1k per month for 3 years) can be submitted for exemption?
As long as it is defined as "long-term care insurance" in the state of Washington.
I've never seen a long-term care insurance policy that pays only $1K per month.
That's only $33 per day. The lowest I've seen is $50 per day.
I suspect you're being shown a life insurance policy and not a long-term care insurance policy.
The policy is explicitly described as long term care (not life insurance) in multiple employer benefit documents and includes policy description of long term care. The coverage amount is quite small. Although, the coverage maximum of $36k ($1k x 36 months) is similar to this new WA Cares maximum of $36.5k. The policy is through Unum. The coverage is minimal, but allows employer to list benefit and is obviously an effort by Unum to get employees to increase coverage.

It seems the employer provided long term care (group long term care insurance) meets the state definitions from points 6 & 7:

https://app.leg.wa.gov/RCW/default.aspx?cite=48.83.020

Anyone else in similar situation? Thoughts?
Sounds like you've found a get out of jail free card.
SIGN UP!
The WA Cares people grossly underestimated how many people would eventually opt-out.
The WA Cares fund is already projected to be underfunded due to the low interest rates caused by COVID.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

johan851 wrote: Wed May 19, 2021 1:07 pm
LFT_PFT wrote: Wed May 19, 2021 12:57 pm The policy is explicitly described as long term care (not life insurance) in multiple employer benefit documents and includes policy description of long term care. The coverage amount is quite small. Although, the coverage maximum of $36k ($1k x 36 months) is similar to this new WA Cares maximum of $36.5k. The policy is through Unum. The coverage is minimal, but allows employer to list benefit and is obviously an effort by Unum to get employees to increase coverage.

It seems the employer provided long term care (group long term care insurance) meets the state definitions from points 6 & 7:

https://app.leg.wa.gov/RCW/default.aspx?cite=48.83.020

Anyone else in similar situation? Thoughts?
I found a Genworth policy at group rates for my employer that came out to $20/mo. $2,250 / mo max benefit over two years max for $54,000 total maximum coverage. No inflation adjustment.

It is definitely at LTC policy as far as I can tell. "Contract for Long Term Care Insurance". Maybe I'm just getting an incredibly good group rate? Or maybe it's going to jump up once they process my application...
...and another get out of jail free card!
Congratulations!
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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willthrill81
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

WoW2012 wrote: Wed May 19, 2021 1:15 pm The WA Cares people grossly underestimated how many people would eventually opt-out.
I've spoken with several folks who would be better off buying their own LTCi policy, and literally none of them had even heard about this act before I mentioned it to them. So while many would benefit from opting out, I wonder how many will do so, especially since they must have a policy in force by November 1st.
Last edited by willthrill81 on Wed May 19, 2021 1:35 pm, edited 1 time in total.
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johan851
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by johan851 »

WoW2012 wrote: Wed May 19, 2021 1:15 pm Sounds like you've found a get out of jail free card.
SIGN UP!
The WA Cares people grossly underestimated how many people would eventually opt-out.
The WA Cares fund is already projected to be underfunded due to the low interest rates caused by COVID.
It is really too bad IMO. Some kind of solution for LTC makes sense to me in principle. Implementing at the state level makes the pool rather small, and moving to the next state over means loss of benefits. As you mention with it being already underfunded, state programs like this also have an unfortunate history of failure that does not inspire general confidence.
impulsecss
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by impulsecss »

I plan on getting married in August. Would I need to purchase LTC for my spouse as well to be able to opt out, or am I grandfathered in by purchasing my own LTC? Out of curiosity, what if I were married next year?
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Ben Mathew
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Ben Mathew »

willthrill81 wrote: Wed May 19, 2021 1:34 pm
WoW2012 wrote: Wed May 19, 2021 1:15 pm The WA Cares people grossly underestimated how many people would eventually opt-out.
I've spoken with several folks who would be better off buying their own LTCi policy, and literally none of them had even heard about this act before I mentioned it to them. So while many would benefit from opting out, I wonder how many will do so, especially since they must have a policy in force by November 1st.
This has been my experience also. No one I've spoken to personally have heard about this rule.

Even after I told them about it, I got the feeling that most people won't dig too much into the cost/benefit and aren't too concerned about a measly 0.58% here and there. Ask them to write a check for $1,000 every year and they sure won't. But payroll deductions and AUM fees don't bother them as much.
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willthrill81
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

Ben Mathew wrote: Wed May 19, 2021 5:09 pm
willthrill81 wrote: Wed May 19, 2021 1:34 pm
WoW2012 wrote: Wed May 19, 2021 1:15 pm The WA Cares people grossly underestimated how many people would eventually opt-out.
I've spoken with several folks who would be better off buying their own LTCi policy, and literally none of them had even heard about this act before I mentioned it to them. So while many would benefit from opting out, I wonder how many will do so, especially since they must have a policy in force by November 1st.
This has been my experience also. No one I've spoken to personally have heard about this rule.

Even after I told them about it, I got the feeling that most people won't dig too much into the cost/benefit and aren't too concerned about a measly 0.58% here and there. Ask them to write a check for $1,000 every year and they sure won't. But payroll deductions and AUM fees don't bother them as much.
Yes, people don't think .58% matters but would be upset to know that they will be paying hundreds or thousands of dollars for this tax. It's the same with AUM fees.
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WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

willthrill81 wrote: Wed May 19, 2021 5:37 pm
Ben Mathew wrote: Wed May 19, 2021 5:09 pm
willthrill81 wrote: Wed May 19, 2021 1:34 pm
WoW2012 wrote: Wed May 19, 2021 1:15 pm The WA Cares people grossly underestimated how many people would eventually opt-out.
I've spoken with several folks who would be better off buying their own LTCi policy, and literally none of them had even heard about this act before I mentioned it to them. So while many would benefit from opting out, I wonder how many will do so, especially since they must have a policy in force by November 1st.
This has been my experience also. No one I've spoken to personally have heard about this rule.

Even after I told them about it, I got the feeling that most people won't dig too much into the cost/benefit and aren't too concerned about a measly 0.58% here and there. Ask them to write a check for $1,000 every year and they sure won't. But payroll deductions and AUM fees don't bother them as much.
Yes, people don't think .58% matters but would be upset to know that they will be paying hundreds or thousands of dollars for this tax. It's the same with AUM fees.

The people who should be the most upset are those who will retire in the next 9 years. All that tax and they won't get anything from this program.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

impulsecss wrote: Wed May 19, 2021 5:07 pm I plan on getting married in August. Would I need to purchase LTC for my spouse as well to be able to opt out, or am I grandfathered in by purchasing my own LTC? Out of curiosity, what if I were married next year?
If your future spouse is (or will be) a W-2 employee he/she must own LTCi before 11/1/2021 and must request to be opted out of the program no later than 12/31/2022
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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batpot
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by batpot »

WoW2012 wrote: Wed May 19, 2021 5:39 pm The people who should be the most upset are those who will retire in the next 9 years. All that tax and they won't get anything from this program.
Disagree - it's anyone who didn't know to opt out.

What's the likelihood of the commitment date sliding further right?
Per this thread back in Feb, you needed to have a policy by July, now it's Nov 1st.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

batpot wrote: Wed May 19, 2021 5:55 pm
WoW2012 wrote: Wed May 19, 2021 5:39 pm The people who should be the most upset are those who will retire in the next 9 years. All that tax and they won't get anything from this program.
Disagree - it's anyone who didn't know to opt out.

What's the likelihood of the commitment date sliding further right?
Per this thread back in Feb, you needed to have a policy by July, now it's Nov 1st.
The date changed from July to November because the business community was furious with the legislators for giving them only 90 days to explain this to their employees and to offer a private alternative.

This past March, the far left in the state house tried to move the date BACKWARDS to May, 2019! In other words NO ONE would have the option to opt-out UNLESS they had purchased a policy before the date the law had been signed.

What's the likelihood of the commitment date sliding further right?
ZERO.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

willthrill81 wrote: Wed May 19, 2021 1:34 pm
WoW2012 wrote: Wed May 19, 2021 1:15 pm The WA Cares people grossly underestimated how many people would eventually opt-out.
I've spoken with several folks who would be better off buying their own LTCi policy, and literally none of them had even heard about this act before I mentioned it to them. So while many would benefit from opting out, I wonder how many will do so, especially since they must have a policy in force by November 1st.
....and I thought I was busy now.
I will sleep in November.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Kookaburra
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Kookaburra »

Can anyone provide clarity on what medical underwriting associated with application for private LTC policies involves? This is a new area for me. Does it involve being examined by a physician, filling out a form, other?
Isabelle77
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Isabelle77 »

willthrill81 wrote: Wed May 19, 2021 1:34 pm
WoW2012 wrote: Wed May 19, 2021 1:15 pm The WA Cares people grossly underestimated how many people would eventually opt-out.
I've spoken with several folks who would be better off buying their own LTCi policy, and literally none of them had even heard about this act before I mentioned it to them. So while many would benefit from opting out, I wonder how many will do so, especially since they must have a policy in force by November 1st.
My husband's HR dept is having a meeting for executives next week on how to opt-out. I imagine other companies will soon as well.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

Kookaburra wrote: Wed May 19, 2021 6:17 pm Can anyone provide clarity on what medical underwriting associated with application for private LTC policies involves? This is a new area for me. Does it involve being examined by a physician, filling out a form, other?
It varies from insurance company to insurance company. Even the same company can have different underwriting requirements for different LTCi policies. The extent of the underwriting is also determined by your age and your health history. I'll explain more later.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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davibi02
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by davibi02 »

My employer (local municipality) emailed staff this week explaining the tax and opt-out. They mentioned our benefits provider is "looking into a couple of different options that would qualify as opt-out coverage".

How long does it typically take to apply for solo coverage? I'm concerned if I wait for our benefit provider and they don't have options I like, I may miss the opt-out window.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by ronin »

Based on what I've heard how the law currently reads, any WA State resident who derives W-2 income, regardless of whether that income is sourced from work performed within or outside of WA State, is 100% subject to this new tax. If this is correct, then a Washington resident who splits their time working in Washington and Oregon would be subject to this tax on all their earnings unlike Oregon income tax, which is solely based on the portion of earnings sourced from the portion worked with in Oregon.

Am I off base here?
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

davibi02 wrote: Wed May 19, 2021 7:00 pm How long does it typically take to apply for solo coverage? I'm concerned if I wait for our benefit provider and they don't have options I like, I may miss the opt-out window.
I've been told by various agents that the lead time is 8-10 weeks right now but that that will likely grow longer this year due to the large volume of applicants there will be in the state. I'm thinking that I'll apply in June or July. It's not worth trying to save $100 (for instance) but potentially not have coverage when you need it for the opt out and be out many thousands over the course of years.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Kookaburra »

willthrill81 wrote: Wed May 19, 2021 9:20 pm
davibi02 wrote: Wed May 19, 2021 7:00 pm How long does it typically take to apply for solo coverage? I'm concerned if I wait for our benefit provider and they don't have options I like, I may miss the opt-out window.
I've been told by various agents that the lead time is 8-10 weeks right now but that that will likely grow longer this year due to the large volume of applicants there will be in the state. I'm thinking that I'll apply in June or July. It's not worth trying to save $100 (for instance) but potentially not have coverage when you need it for the opt out and be out many thousands over the course of years.
Can an individual apply for a LTCi policy several months in advance of needing it and request to have it take effect on a specific date (e.g., Oct 31), or does it have to take effect as soon as it’s approved by underwriting?
czaj
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by czaj »

Is it possible to sign up for coverage to be effective in a future period? In other words, apply in the summer for coverage effective in October.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

Kookaburra wrote: Thu May 20, 2021 12:01 am
willthrill81 wrote: Wed May 19, 2021 9:20 pm
davibi02 wrote: Wed May 19, 2021 7:00 pm How long does it typically take to apply for solo coverage? I'm concerned if I wait for our benefit provider and they don't have options I like, I may miss the opt-out window.
I've been told by various agents that the lead time is 8-10 weeks right now but that that will likely grow longer this year due to the large volume of applicants there will be in the state. I'm thinking that I'll apply in June or July. It's not worth trying to save $100 (for instance) but potentially not have coverage when you need it for the opt out and be out many thousands over the course of years.
Can an individual apply for a LTCi policy several months in advance of needing it and request to have it take effect on a specific date (e.g., Oct 31), or does it have to take effect as soon as it’s approved by underwriting?
I'm not sure. WoW2012 would know.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by CardinalRule »

Somehow I had missed this until recently. Leave it to the PNW Bogleheads to be already all over it. :wink:

I am 61, with the intent of working no more than 1-2 more years, and my income is inflated - at present - by stock compensation. And so the WA Cares Fund makes no sense for me.

My employer has arranged for a one-time "deal," with one of the carriers, for which I would have to sign up for by this summer. There is no medical underwriting required and it's 100% portable. My plan for LTC has been to self-insure, but given that I cannot avoid paying 'something' for the remainder of my working years, I will probably enroll in this. I may or may not keep it when I stop working. Without the inflation option, the $50,000 maximum policy would have an annual premium of about $950.

Image
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

CardinalRule wrote: Thu May 20, 2021 9:38 am Somehow I had missed this until recently. Leave it to the PNW Bogleheads to be already all over it. :wink:

I am 61, with the intent of working no more than 1-2 more years, and my income is inflated - at present - by stock compensation. And so the WA Cares Fund makes no sense for me.

My employer has arranged for a one-time "deal," with one of the carriers, for which I would have to sign up for by this summer. There is no medical underwriting required and it's 100% portable. My plan for LTC has been to self-insure, but given that I cannot avoid paying 'something' for the remainder of my working years, I will probably enroll in this. I may or may not keep it when I stop working. Without the inflation option, the $50,000 maximum policy would have an annual premium of about $950.

Image
So you would only keep this policy until you retire?
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batpot
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by batpot »

CardinalRule wrote: Thu May 20, 2021 9:38 am Somehow I had missed this until recently. Leave it to the PNW Bogleheads to be already all over it. :wink:

I am 61, with the intent of working no more than 1-2 more years, and my income is inflated - at present - by stock compensation. And so the WA Cares Fund makes no sense for me.

My employer has arranged for a one-time "deal," with one of the carriers, for which I would have to sign up for by this summer. There is no medical underwriting required and it's 100% portable. My plan for LTC has been to self-insure, but given that I cannot avoid paying 'something' for the remainder of my working years, I will probably enroll in this. I may or may not keep it when I stop working. Without the inflation option, the $50,000 maximum policy would have an annual premium of about $950.

Image
I would shop around.
At that annual premium, you would have to be making moire than 246k for this policy to be cheaper than the WA mandate.

In addition, from what I've read, there's a single opportunity to opt-out, and a single "check" that you have coverage in order to get approved for an opt-out, so it may not be necessary to maintain the coverage after you've been approved for an opt out.
In other words, assuming you pay monthly, you may only need to pay for a few months.
That strategy could be impossible if you get coverage through your employer.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

batpot wrote: Thu May 20, 2021 12:54 pm
However, from what I've read, there's a single opportunity to opt-out, and a single "check" that you have coverage in order to get approved for an opt-out, so it may not be necessary to maintain the coverage after you've been approved for an opt out.
In other words, assuming you pay monthly, you may only need to pay for a few months.

The "check" will be done AFTER you've already been approved for the opt-out.
The "check" will NOT be done in order to be approved for the opt-out.
To be approved for the opt-out all you have to do is give proof of age and "attest" that you purchased long-term care insurance before 11/1/2021.
They will not have time in Q4 to determine if you really owned long-term care insurance before 11/1/2021.
The "check" to see if you really own long-term care insurance will be sometime in 2022, possibly later.
What will drive the extent of the "check" is how many people actually opt-out.
If the number is lower than they expect, then they probably won't "check" anybody.
If the number is higher than they expect, then they will probably "check" extensively.

What will the state of Washington do after hundreds of thousands of the top wage earners in the state opt-out of the program?
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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batpot
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by batpot »

WoW2012 wrote: Thu May 20, 2021 1:15 pm
batpot wrote: Thu May 20, 2021 12:54 pm
However, from what I've read, there's a single opportunity to opt-out, and a single "check" that you have coverage in order to get approved for an opt-out, so it may not be necessary to maintain the coverage after you've been approved for an opt out.
In other words, assuming you pay monthly, you may only need to pay for a few months.

The "check" will be done AFTER you've already been approved for the opt-out.
The "check" will NOT be done in order to be approved for the opt-out.
To be approved for the opt-out all you have to do is give proof of age and "attest" that you purchased long-term care insurance before 11/1/2021.
They will not have time in Q4 to determine if you really owned long-term care insurance before 11/1/2021.
The "check" to see if you really own long-term care insurance will be sometime in 2022, possibly later.
What will drive the extent of the "check" is how many people actually opt-out.
If the number is lower than they expect, then they probably won't "check" anybody.
If the number is higher than they expect, then they will probably "check" extensively.

What will the state of Washington do after hundreds of thousands of the top wage earners in the state opt-out of the program?
So you have to pay through 2022 at a minimum.

Well, they've done a good job of not advertising it, so I think a bunch of high earners are going to be really upset when they realize they missed the opt out window.
especially high earners in their 20s, 30s, and 40s.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by jstorz »

CardinalRule wrote: Thu May 20, 2021 9:38 am My employer has arranged for a one-time "deal," with one of the carriers, for which I would have to sign up for by this summer.
I either have the same employer, or one being offered the same plan. As someone young enough to get the minimum price it will be ~$320/yr for me. As I am planning to "retire" within 10yrs and/or move out of the state, it is a no brainer. I will most likely take this option and keep it until it becomes clear how the politics will play out.

My opinion is that for you it is also worth it - although it hurts to "throw away" money if you don't intend to ever use it. But if you are retiring soon then you would NEVER get anything from the WA plan; with the private option at least you would get something if you unexpectedly had a claim. You can look at it as choosing the cheapest of two bad options.
chupapa
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by chupapa »

can someone dm me the agent/broker to get LTCi? I am pretty new to this, and I never want to have LTC but I think it's better than paying government for 0.58%. Thanks
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

Kookaburra wrote: Wed May 19, 2021 6:17 pm Can anyone provide clarity on what medical underwriting associated with application for private LTC policies involves? This is a new area for me. Does it involve being examined by a physician, filling out a form, other?
It depends. There are many different types of medical underwriting for long-term care insurance.

"Modified Guaranteed Issue" is the easiest to qualify for. It's what Microsoft and some other large companies are offering their employees through Transamerica. If you can answer "yes" to 3 simple questions you are automatically approved. Two of the questions have to do with your work attendance. They figure that if you can work at least 20 hours per week then you are not likely to go on claim anytime soon. Policies with this type of underwriting usually have very low limits: e.g. $100 daily maximum, $50,000 lifetime maximum, etc... Also, spouses are usually not allowed to apply for a policy like this UNLESS the spouse is also an employee of the company.

"Simplified Issue" is also easy to qualify for. It requires a short application with a dozen or so health questions. As long as you can answer "No" to the health questions and as long as you're not obese, you're pretty much guaranteed approval. There are no medical records required. No medical exams. Since the underwriting is very simple it usually has a daily maximum of $250 or less and a lifetime maximum of about $90,000 or less.

"Jet Issue" is underwriting that is based solely upon a telephone interview with a "nurse assessor" who works for the insurance company. The phone interview usually lasts 45 minutes or more. If you're very healthy you can be approved with just this phone interview. No medical records are required. No medical exams are required. However, if the "nurse assessor" finds some aspects of your health history that require further evaluation, you'll have to go through "Full Underwriting".

"Full underwriting" requires a review of your medical records from your primary care doctor and any specialists you see regularly. It can take a very long time to get medical records copied and then sent to the insurance company (sometimes 2 to 3 months). Most long-term care insurance applications are "fully underwritten". If you want very rich benefits, you'll most likely need to go through "full underwriting".

As we get closer to the deadline more and more people will opt for policies that have "simplified issue" because it will take too long to get approved for a "fully underwritten" policy.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
chupapa
Posts: 43
Joined: Sat Mar 13, 2021 1:32 am

Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by chupapa »

WoW2012 wrote: Thu May 20, 2021 1:58 pm
Kookaburra wrote: Wed May 19, 2021 6:17 pm Can anyone provide clarity on what medical underwriting associated with application for private LTC policies involves? This is a new area for me. Does it involve being examined by a physician, filling out a form, other?
It depends. There are many different types of medical underwriting for long-term care insurance.

"Modified Guaranteed Issue" is the easiest to qualify for. It's what Microsoft and some other large companies are offering their employees through Transamerica. If you can answer "yes" to 3 simple questions you are automatically approved. Two of the questions have to do with your work attendance. They figure that if you can work at least 20 hours per week then you are not likely to go on claim anytime soon. Policies with this type of underwriting usually have very low limits: e.g. $100 daily maximum, $50,000 lifetime maximum, etc... Also, spouses are usually not allowed to apply for a policy like this UNLESS the spouse is also an employee of the company.

"Simplified Issue" is also easy to qualify for. It requires a short application with a dozen or so health questions. As long as you can answer "No" to the health questions and as long as you're not obese, you're pretty much guaranteed approval. There are no medical records required. No medical exams. Since the underwriting is very simple it usually has a daily maximum of $250 or less and a lifetime maximum of about $90,000 or less.

"Jet Issue" is underwriting that is based solely upon a telephone interview with a "nurse assessor" who works for the insurance company. The phone interview usually lasts 45 minutes or more. If you're very healthy you can be approved with just this phone interview. No medical records are required. No medical exams are required. However, if the "nurse assessor" finds some aspects of your health history that require further evaluation, you'll have to go through "Full Underwriting".

"Full underwriting" requires a review of your medical records from your primary care doctor and any specialists you see regularly. It can take a very long time to get medical records copied and then sent to the insurance company (sometimes 2 to 3 months). Most long-term care insurance applications are "fully underwritten". If you want very rich benefits, you'll most likely need to go through "full underwriting".

As we get closer to the deadline more and more people will opt for policies that have "simplified issue" because it will take too long to get approved for a "fully underwritten" policy.
There are also many type of LTC insurance, do you have any recommend which one I should go for? basic? hybrid? asset-based? etc
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

chupapa wrote: Thu May 20, 2021 2:38 pm
WoW2012 wrote: Thu May 20, 2021 1:58 pm
Kookaburra wrote: Wed May 19, 2021 6:17 pm Can anyone provide clarity on what medical underwriting associated with application for private LTC policies involves? This is a new area for me. Does it involve being examined by a physician, filling out a form, other?
It depends. There are many different types of medical underwriting for long-term care insurance.

"Modified Guaranteed Issue" is the easiest to qualify for. It's what Microsoft and some other large companies are offering their employees through Transamerica. If you can answer "yes" to 3 simple questions you are automatically approved. Two of the questions have to do with your work attendance. They figure that if you can work at least 20 hours per week then you are not likely to go on claim anytime soon. Policies with this type of underwriting usually have very low limits: e.g. $100 daily maximum, $50,000 lifetime maximum, etc... Also, spouses are usually not allowed to apply for a policy like this UNLESS the spouse is also an employee of the company.

"Simplified Issue" is also easy to qualify for. It requires a short application with a dozen or so health questions. As long as you can answer "No" to the health questions and as long as you're not obese, you're pretty much guaranteed approval. There are no medical records required. No medical exams. Since the underwriting is very simple it usually has a daily maximum of $250 or less and a lifetime maximum of about $90,000 or less.

"Jet Issue" is underwriting that is based solely upon a telephone interview with a "nurse assessor" who works for the insurance company. The phone interview usually lasts 45 minutes or more. If you're very healthy you can be approved with just this phone interview. No medical records are required. No medical exams are required. However, if the "nurse assessor" finds some aspects of your health history that require further evaluation, you'll have to go through "Full Underwriting".

"Full underwriting" requires a review of your medical records from your primary care doctor and any specialists you see regularly. It can take a very long time to get medical records copied and then sent to the insurance company (sometimes 2 to 3 months). Most long-term care insurance applications are "fully underwritten". If you want very rich benefits, you'll most likely need to go through "full underwriting".

As we get closer to the deadline more and more people will opt for policies that have "simplified issue" because it will take too long to get approved for a "fully underwritten" policy.
There are also many type of LTC insurance, do you have any recommend which one I should go for? basic? hybrid? asset-based? etc
If you're healthy enough to qualify for a traditional LTCi policy then that is probably the best value.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
jstorz
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by jstorz »

WoW2012 wrote: Thu May 20, 2021 2:43 pm If you're healthy enough to qualify for a traditional LTCi policy then that is probably the best value.
Really appreciate the explanation, that makes sense.

I'm young/healthy and have the option to get a plan with a modified guaranteed issue for ~$27/m for $100/$50k. This feels inexpensive enough that am considering not bothering with quotes. Do you think there would be much to gain with going through the effort? I'm not looking for higher limits.
chupapa
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by chupapa »

WoW2012 wrote: Thu May 20, 2021 2:43 pm
chupapa wrote: Thu May 20, 2021 2:38 pm
WoW2012 wrote: Thu May 20, 2021 1:58 pm
Kookaburra wrote: Wed May 19, 2021 6:17 pm Can anyone provide clarity on what medical underwriting associated with application for private LTC policies involves? This is a new area for me. Does it involve being examined by a physician, filling out a form, other?
It depends. There are many different types of medical underwriting for long-term care insurance.

"Modified Guaranteed Issue" is the easiest to qualify for. It's what Microsoft and some other large companies are offering their employees through Transamerica. If you can answer "yes" to 3 simple questions you are automatically approved. Two of the questions have to do with your work attendance. They figure that if you can work at least 20 hours per week then you are not likely to go on claim anytime soon. Policies with this type of underwriting usually have very low limits: e.g. $100 daily maximum, $50,000 lifetime maximum, etc... Also, spouses are usually not allowed to apply for a policy like this UNLESS the spouse is also an employee of the company.

"Simplified Issue" is also easy to qualify for. It requires a short application with a dozen or so health questions. As long as you can answer "No" to the health questions and as long as you're not obese, you're pretty much guaranteed approval. There are no medical records required. No medical exams. Since the underwriting is very simple it usually has a daily maximum of $250 or less and a lifetime maximum of about $90,000 or less.

"Jet Issue" is underwriting that is based solely upon a telephone interview with a "nurse assessor" who works for the insurance company. The phone interview usually lasts 45 minutes or more. If you're very healthy you can be approved with just this phone interview. No medical records are required. No medical exams are required. However, if the "nurse assessor" finds some aspects of your health history that require further evaluation, you'll have to go through "Full Underwriting".

"Full underwriting" requires a review of your medical records from your primary care doctor and any specialists you see regularly. It can take a very long time to get medical records copied and then sent to the insurance company (sometimes 2 to 3 months). Most long-term care insurance applications are "fully underwritten". If you want very rich benefits, you'll most likely need to go through "full underwriting".

As we get closer to the deadline more and more people will opt for policies that have "simplified issue" because it will take too long to get approved for a "fully underwritten" policy.
There are also many type of LTC insurance, do you have any recommend which one I should go for? basic? hybrid? asset-based? etc
If you're healthy enough to qualify for a traditional LTCi policy then that is probably the best value.
should I even bother look at life insurance with LTC rider? I am single and no one to be taken of if I pass away
daave
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by daave »

Ben Mathew wrote: Wed May 19, 2021 5:09 pm
willthrill81 wrote: Wed May 19, 2021 1:34 pm
WoW2012 wrote: Wed May 19, 2021 1:15 pm The WA Cares people grossly underestimated how many people would eventually opt-out.
I've spoken with several folks who would be better off buying their own LTCi policy, and literally none of them had even heard about this act before I mentioned it to them. So while many would benefit from opting out, I wonder how many will do so, especially since they must have a policy in force by November 1st.
This has been my experience also. No one I've spoken to personally have heard about this rule.

Even after I told them about it, I got the feeling that most people won't dig too much into the cost/benefit and aren't too concerned about a measly 0.58% here and there. Ask them to write a check for $1,000 every year and they sure won't. But payroll deductions and AUM fees don't bother them as much.
I know from friends in the tech industry that the HR departments of Amazon, Google & Microsoft have all emailed their employees about this.. so that's about 150,000 people just from that group. And probably a disproportionately large share of the tax base.
czaj
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by czaj »

Is anyone lacking confidence that their employer’s payroll department will be good at administering opt-outs? Particularly, I am one of few who work in Washington state, so I could see it going either way.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

czaj wrote: Fri May 21, 2021 2:33 pm Is anyone lacking confidence that their employer’s payroll department won’t be good at administering opt-outs? Particularly, I am one of few who work in Washington state, so I could see it going either way.
Once you give them the approval letter from ESD they will not take the tax out beginning with the next quarter. In other words, if you give them the approval letter sometime in January, 2022 they have to take the tax out for the entire first quarter. If you give them the approval letter before Q1 2022, if they take the tax out in Q1 they have to refund it to you.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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davibi02
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by davibi02 »

czaj wrote: Fri May 21, 2021 2:33 pm Is anyone lacking confidence that their employer’s payroll department will be good at administering opt-outs? Particularly, I am one of few who work in Washington state, so I could see it going either way.
I'd imagine there will be some hiccups and resulting refunds, but be kind to your overworked HR/Payroll staff. I guarantee they don't want another mandated deduction forced down their throats, especially one with this much complexity to administer.
StoopieHippo
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by StoopieHippo »

czaj wrote: Fri May 21, 2021 2:33 pm Is anyone lacking confidence that their employer’s payroll department will be good at administering opt-outs? Particularly, I am one of few who work in Washington state, so I could see it going either way.
I am a state employee of a school here, and while their website has information about the upcoming law, there's no information on whether or not they'll give us an opt-out through our benefits yet. I've contacted a broker about this for myself and my spouse for the time being, just to review our options.
saulg
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by saulg »

StoopieHippo wrote: Fri May 21, 2021 6:08 pm
czaj wrote: Fri May 21, 2021 2:33 pm Is anyone lacking confidence that their employer’s payroll department will be good at administering opt-outs? Particularly, I am one of few who work in Washington state, so I could see it going either way.
I am a state employee of a school here, and while their website has information about the upcoming law, there's no information on whether or not they'll give us an opt-out through our benefits yet. I've contacted a broker about this for myself and my spouse for the time being, just to review our options.
This is the response I got from SEBB this week re: our Washington State School District:

1) Does the third-party Long Term Care insurance (LTCi) benefit currently offered by the District (through Unum) qualify for “opt-out” of the new payroll tax? Answer: Yes, it would qualify.

2) Will the District provide the opportunity for employees to enroll in the Unum LTCi benefit outside of Open Enrollment (eg, before the state’s Nov 1 deadline) with a “modified Guarantee Issue enrollment period” such that a medical questionnaire and/or underwriting are not required? Answer: Unum will not be offering any guaranteed issue open enrollment. All employees who enroll will have to go through the medical questionnaire and underwriting.

3) Will the District be providing other options for employees who wish to opt-out of the WA Cares Fund and associated payroll tax? Answer: We are currently working on this and will be sending out communication with more details hopefully within the next week.

I imagine these answers may vary by District.
prd1982
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by prd1982 »

Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

prd1982 wrote: Fri May 21, 2021 6:30 pm Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
Why do you think you can drop coverage within a couple of months without consequence?
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
prd1982
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by prd1982 »

WoW2012 wrote: Fri May 21, 2021 6:34 pm
prd1982 wrote: Fri May 21, 2021 6:30 pm Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
Why do you think you can drop coverage within a couple of months without consequence?
I thought once you were approved as having LTCi, you could drop coverage.
daave
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by daave »

WoW2012 wrote: Fri May 21, 2021 6:34 pm
prd1982 wrote: Fri May 21, 2021 6:30 pm Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
Why do you think you can drop coverage within a couple of months without consequence?
Because the law has no provision for ongoing verification. It's explicitly a 1-time thing.
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willthrill81
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

prd1982 wrote: Fri May 21, 2021 6:38 pm
WoW2012 wrote: Fri May 21, 2021 6:34 pm
prd1982 wrote: Fri May 21, 2021 6:30 pm Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
Why do you think you can drop coverage within a couple of months without consequence?
I thought once you were approved as having LTCi, you could drop coverage.
As long as you have proof that you were covered by a policy on 11/1/2021, the law is clear that you qualify for the permanent opt out. This is a legitimate, legal loophole, and the ESD cannot 'close it' afterward; only the legislature could, but I don't think that even they could do it retroactively.
The Sensible Steward
prd1982
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by prd1982 »

willthrill81 wrote: Fri May 21, 2021 8:09 pm
prd1982 wrote: Fri May 21, 2021 6:38 pm
WoW2012 wrote: Fri May 21, 2021 6:34 pm
prd1982 wrote: Fri May 21, 2021 6:30 pm Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
Why do you think you can drop coverage within a couple of months without consequence?
I thought once you were approved as having LTCi, you could drop coverage.
As long as you have proof that you were covered by a policy on 11/1/2021, the law is clear that you qualify for the permanent opt out. This is a legitimate, legal loophole, and the ESD cannot 'close it' afterward; only the legislature could, but I don't think that even they could do it retroactively.
So back to my question. Why would an insurance company write a policy they expect to be canceled in a couple of months? It has got to cost them and the agent more than the premiums.
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willthrill81
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

prd1982 wrote: Fri May 21, 2021 8:33 pm
willthrill81 wrote: Fri May 21, 2021 8:09 pm
prd1982 wrote: Fri May 21, 2021 6:38 pm
WoW2012 wrote: Fri May 21, 2021 6:34 pm
prd1982 wrote: Fri May 21, 2021 6:30 pm Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
Why do you think you can drop coverage within a couple of months without consequence?
I thought once you were approved as having LTCi, you could drop coverage.
As long as you have proof that you were covered by a policy on 11/1/2021, the law is clear that you qualify for the permanent opt out. This is a legitimate, legal loophole, and the ESD cannot 'close it' afterward; only the legislature could, but I don't think that even they could do it retroactively.
So back to my question. Why would an insurance company write a policy they expect to be canceled in a couple of months? It has got to cost them and the agent more than the premiums.
I'm pretty sure that they cannot legally refuse legitimate customers.
The Sensible Steward
StoopieHippo
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by StoopieHippo »

saulg wrote: Fri May 21, 2021 6:23 pm
StoopieHippo wrote: Fri May 21, 2021 6:08 pm
czaj wrote: Fri May 21, 2021 2:33 pm Is anyone lacking confidence that their employer’s payroll department will be good at administering opt-outs? Particularly, I am one of few who work in Washington state, so I could see it going either way.
I am a state employee of a school here, and while their website has information about the upcoming law, there's no information on whether or not they'll give us an opt-out through our benefits yet. I've contacted a broker about this for myself and my spouse for the time being, just to review our options.
This is the response I got from SEBB this week re: our Washington State School District:

1) Does the third-party Long Term Care insurance (LTCi) benefit currently offered by the District (through Unum) qualify for “opt-out” of the new payroll tax? Answer: Yes, it would qualify.

2) Will the District provide the opportunity for employees to enroll in the Unum LTCi benefit outside of Open Enrollment (eg, before the state’s Nov 1 deadline) with a “modified Guarantee Issue enrollment period” such that a medical questionnaire and/or underwriting are not required? Answer: Unum will not be offering any guaranteed issue open enrollment. All employees who enroll will have to go through the medical questionnaire and underwriting.

3) Will the District be providing other options for employees who wish to opt-out of the WA Cares Fund and associated payroll tax? Answer: We are currently working on this and will be sending out communication with more details hopefully within the next week.

I imagine these answers may vary by District.
Sadly though, I'm a PEBB employee. We have no LTCi benefit at this point that I'm aware of, only long term disability and life insurance. I guess they could add a rider in, but I would have to opt in at the end of the year and go through underwriting, like SEBB said. Hopefully they come out with something for PEBB employees next week too! :)
sbh8
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by sbh8 »

Is there any reason to not get the cheapest plan possible to opt out of the tax? LTCi was not on my radar yet. I am in my late 30s.
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Soon2BXProgrammer
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Soon2BXProgrammer »

sbh8 wrote: Sat May 22, 2021 11:05 am Is there any reason to not get the cheapest plan possible to opt out of the tax? LTCi was not on my radar yet. I am in my late 30s.
The flip side is.. maybe its a reasonable decision to buy a small but reasonable policy that is decent but less than the tax. (Such as one with $100 day benefit for 2 years but with a 2% compound inflation adjustor)
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
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