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

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

Post by tj »

willthrill81 wrote: Wed Apr 07, 2021 1:08 pm
asdfgf wrote: Wed Apr 07, 2021 12:46 pm
WoW2012 wrote: Wed Apr 07, 2021 10:54 am
asdfgf wrote: Tue Apr 06, 2021 11:24 pm
WoW2012 wrote: Tue Apr 06, 2021 12:36 pm

Edit: It now looks like we'll have some guidance on the opt-out rules and "minimum levels of coverage" next week.
Stay tuned......
Where will this guidance be published?

Also is there any reason (right now) to believe a $3000/month policy with a 75K max benefit wouldn't meet opt out threshold. I suppose technically the $3000/month is a bit less than $100/day, but I would think that more than double the benefit would make the policy at least as good as what WA offers by any reasonable person.

What about the inflation protection?
What about the elimination period?
Do you know what those are on the default Washington Plan?
I just got a quote from a LTCi specialist for a Mutual of Omaha policy. The elimination period is 90 days, with 1% inflation protection and $50k of maximum benefits, well above the state's $36.5k of maximum benefits. I'm pretty confident that this will meet the state's minimum for opt-out purposes. Since I'm still young and healthy, annual premiums would be about $290/year, which is much less than the payroll tax would cost me and the sole purpose of me obtaining such a policy. I'll probably wait for a few weeks to see if we get more guidance on the minimum amounts before buying this policy though.
Does the maximum benefit increase by the 1% inflation? if not, what's the point of having that rider?
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 Apr 07, 2021 1:08 pm
asdfgf wrote: Wed Apr 07, 2021 12:46 pm
WoW2012 wrote: Wed Apr 07, 2021 10:54 am
asdfgf wrote: Tue Apr 06, 2021 11:24 pm
WoW2012 wrote: Tue Apr 06, 2021 12:36 pm

Edit: It now looks like we'll have some guidance on the opt-out rules and "minimum levels of coverage" next week.
Stay tuned......
Where will this guidance be published?

Also is there any reason (right now) to believe a $3000/month policy with a 75K max benefit wouldn't meet opt out threshold. I suppose technically the $3000/month is a bit less than $100/day, but I would think that more than double the benefit would make the policy at least as good as what WA offers by any reasonable person.

What about the inflation protection?
What about the elimination period?
Do you know what those are on the default Washington Plan?
I just got a quote from a LTCi specialist for a Mutual of Omaha policy. The elimination period is 90 days, with 1% inflation protection and $50k of maximum benefits, well above the state's $36.5k of maximum benefits. I'm pretty confident that this will meet the state's minimum for opt-out purposes. Since I'm still young and healthy, annual premiums would be about $290/year, which is much less than the payroll tax would cost me and the sole purpose of me obtaining such a policy. I'll probably wait for a few weeks to see if we get more guidance on the minimum amounts before buying this policy though.

That policy has less than $70 per day of benefits. The WaLTCTA has $100 per day.
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 »

tj wrote: Wed Apr 07, 2021 1:11 pm
willthrill81 wrote: Wed Apr 07, 2021 1:08 pm
asdfgf wrote: Wed Apr 07, 2021 12:46 pm
WoW2012 wrote: Wed Apr 07, 2021 10:54 am
asdfgf wrote: Tue Apr 06, 2021 11:24 pm

Where will this guidance be published?

Also is there any reason (right now) to believe a $3000/month policy with a 75K max benefit wouldn't meet opt out threshold. I suppose technically the $3000/month is a bit less than $100/day, but I would think that more than double the benefit would make the policy at least as good as what WA offers by any reasonable person.

What about the inflation protection?
What about the elimination period?
Do you know what those are on the default Washington Plan?
I just got a quote from a LTCi specialist for a Mutual of Omaha policy. The elimination period is 90 days, with 1% inflation protection and $50k of maximum benefits, well above the state's $36.5k of maximum benefits. I'm pretty confident that this will meet the state's minimum for opt-out purposes. Since I'm still young and healthy, annual premiums would be about $290/year, which is much less than the payroll tax would cost me and the sole purpose of me obtaining such a policy. I'll probably wait for a few weeks to see if we get more guidance on the minimum amounts before buying this policy though.
Does the maximum benefit increase by the 1% inflation? if not, what's the point of having that rider?
Yes, that's what the 1% inflation rider does. It's apparently the least that M of O provides.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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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 Apr 07, 2021 1:20 pm
willthrill81 wrote: Wed Apr 07, 2021 1:08 pm
asdfgf wrote: Wed Apr 07, 2021 12:46 pm
WoW2012 wrote: Wed Apr 07, 2021 10:54 am
asdfgf wrote: Tue Apr 06, 2021 11:24 pm

Where will this guidance be published?

Also is there any reason (right now) to believe a $3000/month policy with a 75K max benefit wouldn't meet opt out threshold. I suppose technically the $3000/month is a bit less than $100/day, but I would think that more than double the benefit would make the policy at least as good as what WA offers by any reasonable person.

What about the inflation protection?
What about the elimination period?
Do you know what those are on the default Washington Plan?
I just got a quote from a LTCi specialist for a Mutual of Omaha policy. The elimination period is 90 days, with 1% inflation protection and $50k of maximum benefits, well above the state's $36.5k of maximum benefits. I'm pretty confident that this will meet the state's minimum for opt-out purposes. Since I'm still young and healthy, annual premiums would be about $290/year, which is much less than the payroll tax would cost me and the sole purpose of me obtaining such a policy. I'll probably wait for a few weeks to see if we get more guidance on the minimum amounts before buying this policy though.

That policy has less than $70 per day of benefits. The WaLTCTA has $100 per day.
Actually, the maximum benefit is $1,500/month, so about $50/day. So I may have to increase that to $3,000/month in order to match the state's program. Still, premiums would be much lower than the tax.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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 Apr 07, 2021 1:21 pm
WoW2012 wrote: Wed Apr 07, 2021 1:20 pm
willthrill81 wrote: Wed Apr 07, 2021 1:08 pm
asdfgf wrote: Wed Apr 07, 2021 12:46 pm
WoW2012 wrote: Wed Apr 07, 2021 10:54 am


What about the inflation protection?
What about the elimination period?
Do you know what those are on the default Washington Plan?
I just got a quote from a LTCi specialist for a Mutual of Omaha policy. The elimination period is 90 days, with 1% inflation protection and $50k of maximum benefits, well above the state's $36.5k of maximum benefits. I'm pretty confident that this will meet the state's minimum for opt-out purposes. Since I'm still young and healthy, annual premiums would be about $290/year, which is much less than the payroll tax would cost me and the sole purpose of me obtaining such a policy. I'll probably wait for a few weeks to see if we get more guidance on the minimum amounts before buying this policy though.

That policy has less than $70 per day of benefits. The WaLTCTA has $100 per day.
Actually, the maximum benefit is $1,500/month, so about $50/day. So I may have to increase that to $3,000/month in order to match the state's program. Still, premiums would be much lower than the tax.
You'll also need to increase the lifetime maximum.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
asdfgf
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by asdfgf »

willthrill81 wrote: Wed Apr 07, 2021 1:21 pm
WoW2012 wrote: Wed Apr 07, 2021 1:20 pm
willthrill81 wrote: Wed Apr 07, 2021 1:08 pm
asdfgf wrote: Wed Apr 07, 2021 12:46 pm
WoW2012 wrote: Wed Apr 07, 2021 10:54 am


What about the inflation protection?
What about the elimination period?
Do you know what those are on the default Washington Plan?
I just got a quote from a LTCi specialist for a Mutual of Omaha policy. The elimination period is 90 days, with 1% inflation protection and $50k of maximum benefits, well above the state's $36.5k of maximum benefits. I'm pretty confident that this will meet the state's minimum for opt-out purposes. Since I'm still young and healthy, annual premiums would be about $290/year, which is much less than the payroll tax would cost me and the sole purpose of me obtaining such a policy. I'll probably wait for a few weeks to see if we get more guidance on the minimum amounts before buying this policy though.

That policy has less than $70 per day of benefits. The WaLTCTA has $100 per day.
Actually, the maximum benefit is $1,500/month, so about $50/day. So I may have to increase that to $3,000/month in order to match the state's program. Still, premiums would be much lower than the tax.
I also think you may have an elimination period problem. I think WA's plan has a zero elimination period (anyone know for sure?). If your has 90 days, then that is worse.
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warowits
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by warowits »

This new tax is annoying. It is basically a give away to the insurance industry, who I am sure wrote the law themselves. I will sign up for the absolute cheapest alternative, which will still be money flushed down the toilet.
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 »

warowits wrote: Wed Apr 07, 2021 5:21 pm This new tax is annoying. It is basically a give away to the insurance industry, who I am sure wrote the law themselves. I will sign up for the absolute cheapest alternative, which will still be money flushed down the toilet.

The source of the legislation was the SEIU, not the insurance industry.
The "opt-out" amendment was added at the very last minute by one senator.
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 Apr 07, 2021 1:51 pm
willthrill81 wrote: Wed Apr 07, 2021 1:21 pm
WoW2012 wrote: Wed Apr 07, 2021 1:20 pm
willthrill81 wrote: Wed Apr 07, 2021 1:08 pm
asdfgf wrote: Wed Apr 07, 2021 12:46 pm

Do you know what those are on the default Washington Plan?
I just got a quote from a LTCi specialist for a Mutual of Omaha policy. The elimination period is 90 days, with 1% inflation protection and $50k of maximum benefits, well above the state's $36.5k of maximum benefits. I'm pretty confident that this will meet the state's minimum for opt-out purposes. Since I'm still young and healthy, annual premiums would be about $290/year, which is much less than the payroll tax would cost me and the sole purpose of me obtaining such a policy. I'll probably wait for a few weeks to see if we get more guidance on the minimum amounts before buying this policy though.

That policy has less than $70 per day of benefits. The WaLTCTA has $100 per day.
Actually, the maximum benefit is $1,500/month, so about $50/day. So I may have to increase that to $3,000/month in order to match the state's program. Still, premiums would be much lower than the tax.
You'll also need to increase the lifetime maximum.
To what and why?
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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 Apr 07, 2021 5:45 pm
WoW2012 wrote: Wed Apr 07, 2021 1:51 pm
willthrill81 wrote: Wed Apr 07, 2021 1:21 pm
WoW2012 wrote: Wed Apr 07, 2021 1:20 pm
willthrill81 wrote: Wed Apr 07, 2021 1:08 pm

I just got a quote from a LTCi specialist for a Mutual of Omaha policy. The elimination period is 90 days, with 1% inflation protection and $50k of maximum benefits, well above the state's $36.5k of maximum benefits. I'm pretty confident that this will meet the state's minimum for opt-out purposes. Since I'm still young and healthy, annual premiums would be about $290/year, which is much less than the payroll tax would cost me and the sole purpose of me obtaining such a policy. I'll probably wait for a few weeks to see if we get more guidance on the minimum amounts before buying this policy though.

That policy has less than $70 per day of benefits. The WaLTCTA has $100 per day.
Actually, the maximum benefit is $1,500/month, so about $50/day. So I may have to increase that to $3,000/month in order to match the state's program. Still, premiums would be much lower than the tax.
You'll also need to increase the lifetime maximum.
To what and why?
If your monthly benefit is $3,000 the smallest lifetime maximum you can buy from Mutual of Omaha is $75,000.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
asdfgf
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by asdfgf »

warowits wrote: Wed Apr 07, 2021 5:21 pm This new tax is annoying. It is basically a give away to the insurance industry, who I am sure wrote the law themselves. I will sign up for the absolute cheapest alternative, which will still be money flushed down the toilet.
That's what everyone wants, but it's easier said than done. If this thread is any indication, it is not trivial to figure out what the "absolute cheapest" alternative that the state of Washington will find acceptable enough to grant an exemption.
asdfgf
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by asdfgf »

The more I research this, the more confused I get.

I think the policies I've seen offer 1% inflation protection. Is that enough? It looks like it is possible that WA could increase benefits by more than 1% a year.
asdfgf
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by asdfgf »

asdfgf wrote: Wed Apr 07, 2021 6:38 pm The more I research this, the more confused I get.

I think the policies I've seen offer 1% inflation protection. Is that enough? It looks like it is possible that WA could increase benefits by more than 1% a year. Not every single year, but at least some years it could happen.
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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 »

asdfgf wrote: Wed Apr 07, 2021 6:38 pm
asdfgf wrote: Wed Apr 07, 2021 6:38 pm The more I research this, the more confused I get.

I think the policies I've seen offer 1% inflation protection. Is that enough? It looks like it is possible that WA could increase benefits by more than 1% a year. Not every single year, but at least some years it could happen.
I've seen multiple different amounts of inflation protection... while expensive, i like policies in the 3% annual compound rate.

(I've seen policies as high as 5%, but i'm not sure if those are offered anymore)
Hilltop
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Hilltop »

There is a lot of speculation about whether the opt out policy would need to be equivalent to what would be offered under the state trust program. While circumstances could of course change, neither the current statute, the proposed statutory revision, nor the proposed final rules indicate that such equivalence is required. The only criteria for opting out under the most recent version of proposed rules is that individuals timely apply for the exemption and attest to having private long-term care insurance as defined in RCW 48.83.020. RCW 48.83.020 requires that the policy or contract provide coverage for at least twelve consecutive months, but otherwise does not seem to include any particular thresholds for coverage.
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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 »

Hilltop wrote: Wed Apr 07, 2021 8:29 pm There is a lot of speculation about whether the opt out policy would need to be equivalent to what would be offered under the state trust program. While circumstances could of course change, neither the current statute, the proposed statutory revision, nor the proposed final rules indicate that such equivalence is required. The only criteria for opting out under the most recent version of proposed rules is that individuals timely apply for the exemption and attest to having private long-term care insurance as defined in RCW 48.83.020. RCW 48.83.020 requires that the policy or contract provide coverage for at least twelve consecutive months, but otherwise does not seem to include any particular thresholds for coverage.
That's why I'm going to wait a bit before buying a policy. If a literal bare bonds policy will suffice, that's what I'll get. I don't care about the coverage in the slightest and just the least costly option.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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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 Apr 07, 2021 5:55 pm
willthrill81 wrote: Wed Apr 07, 2021 5:45 pm
WoW2012 wrote: Wed Apr 07, 2021 1:51 pm
willthrill81 wrote: Wed Apr 07, 2021 1:21 pm
WoW2012 wrote: Wed Apr 07, 2021 1:20 pm


That policy has less than $70 per day of benefits. The WaLTCTA has $100 per day.
Actually, the maximum benefit is $1,500/month, so about $50/day. So I may have to increase that to $3,000/month in order to match the state's program. Still, premiums would be much lower than the tax.
You'll also need to increase the lifetime maximum.
To what and why?
If your monthly benefit is $3,000 the smallest lifetime maximum you can buy from Mutual of Omaha is $75,000.
I see. Thanks.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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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 »

asdfgf wrote: Wed Apr 07, 2021 6:38 pm The more I research this, the more confused I get.

I think the policies I've seen offer 1% inflation protection. Is that enough? It looks like it is possible that WA could increase benefits by more than 1% a year.
The way that the law is currently written, there is no provision for an increasing benefit, nor any specified requirement whatsoever on the long-term care policy one could hold that would allow one to opt out.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
asdfgf
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by asdfgf »

willthrill81 wrote: Wed Apr 07, 2021 9:40 pm
asdfgf wrote: Wed Apr 07, 2021 6:38 pm The more I research this, the more confused I get.

I think the policies I've seen offer 1% inflation protection. Is that enough? It looks like it is possible that WA could increase benefits by more than 1% a year.
The way that the law is currently written, there is no provision for an increasing benefit, nor any specified requirement whatsoever on the long-term care policy one could hold that would allow one to opt out.
I saw this on a WA state website:
Beginning January 2025, each person who is eligible to receive the benefit will be able to access services and supports worth up to $36,500 over their lifetimes.

The nominal value of this benefit will increase over time to keep pace with inflation.
Source: https://www.dshs.wa.gov/altsa/stakehold ... ports-ltss
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 Apr 07, 2021 9:40 pm
asdfgf wrote: Wed Apr 07, 2021 6:38 pm The more I research this, the more confused I get.

I think the policies I've seen offer 1% inflation protection. Is that enough? It looks like it is possible that WA could increase benefits by more than 1% a year.
The way that the law is currently written, there is no provision for an increasing benefit, nor any specified requirement whatsoever on the long-term care policy one could hold that would allow one to opt out.
Incorrect, Mr. Will. Here's what the actual legislation says:

https://app.leg.wa.gov/RCW/default.aspx ... 0B.04.010

(3) "Benefit unit" means up to one hundred dollars paid by the department of social and health services to a long-term services and supports provider as reimbursement for approved services provided to an eligible beneficiary on a specific date. The benefit unit must be adjusted annually at a rate no greater than the Washington state consumer price index, as determined solely by the council. Any changes adopted by the council shall be subject to revision by the legislature.
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 »

Hilltop wrote: Wed Apr 07, 2021 8:29 pm There is a lot of speculation about whether the opt out policy would need to be equivalent to what would be offered under the state trust program. While circumstances could of course change, neither the current statute, the proposed statutory revision, nor the proposed final rules indicate that such equivalence is required. The only criteria for opting out under the most recent version of proposed rules is that individuals timely apply for the exemption and attest to having private long-term care insurance as defined in RCW 48.83.020. RCW 48.83.020 requires that the policy or contract provide coverage for at least twelve consecutive months, but otherwise does not seem to include any particular thresholds for coverage.
Regarding opt-out rules, the legislation states:

https://app.leg.wa.gov/RCW/default.aspx ... 0B.04.085
(9) The department must adopt rules necessary to implement and administer the activities specified in this section related to the program, including rules on the submission and processing of applications under this section.

Those rules have not yet been adopted.
We're supposed to hear next week what the rules will be in regards to minimum benefit levels.
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 »

asdfgf wrote: Wed Apr 07, 2021 10:01 pm
willthrill81 wrote: Wed Apr 07, 2021 9:40 pm
asdfgf wrote: Wed Apr 07, 2021 6:38 pm The more I research this, the more confused I get.

I think the policies I've seen offer 1% inflation protection. Is that enough? It looks like it is possible that WA could increase benefits by more than 1% a year.
The way that the law is currently written, there is no provision for an increasing benefit, nor any specified requirement whatsoever on the long-term care policy one could hold that would allow one to opt out.
I saw this on a WA state website:
Beginning January 2025, each person who is eligible to receive the benefit will be able to access services and supports worth up to $36,500 over their lifetimes.

The nominal value of this benefit will increase over time to keep pace with inflation.
Source: https://www.dshs.wa.gov/altsa/stakehold ... ports-ltss
WoW2012 wrote: Wed Apr 07, 2021 10:29 pm Incorrect, Mr. Will. Here's what the actual legislation says:
Thanks for the correction.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
Cucumbers
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Cucumbers »

Okay WA residents— how does the state collect this if you are an independent contractor or K1 partnership status?
asdfgf
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by asdfgf »

Cucumbers wrote: Thu Apr 08, 2021 12:19 am Okay WA residents— how does the state collect this if you are an independent contractor or K1 partnership status?
I don't think it applies. In that case you have to opt in.

Not sure, though.
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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 »

Cucumbers wrote: Thu Apr 08, 2021 12:19 am Okay WA residents— how does the state collect this if you are an independent contractor or K1 partnership status?
if you are a business owner, you have an opt in period. if you don't opt in your perm disqualified from receiving benefits.. It isn't clear if you later get a W2 job if you don't have to pay the tax..
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 »

Cucumbers wrote: Thu Apr 08, 2021 12:19 am Okay WA residents— how does the state collect this if you are an independent contractor or K1 partnership status?

Self-employed are exempt from the program.
However you can opt-in.

Also, you should probably get a small policy anyway, and get the opt-out approval, just in case you ever set up an S-corp or C-corp and you and/or your spouse are employees of the corp.

If the Biden admin removes the cap on the self-employment tax, it'll make sense to set up an S-corp to avoid the unlimited self-employment tax.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Cucumbers
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Cucumbers »

How much will a “small policy” premium cost? I don’t care for the actual quality of the policy as long as it qualifies for the opt out. Any recommendations?
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 »

Cucumbers wrote: Thu Apr 08, 2021 10:25 am How much will a “small policy” premium cost? I don’t care for the actual quality of the policy as long as it qualifies for the opt out. Any recommendations?

We're still waiting for the WA Employment Security Department to clarify the minimum amount of benefits. Hopefully, they'll give us some concrete guidelines next week. But, to be frank, I doubt it. I suspect the state won't make any determinations about what they will require until after the 7/24/2021 deadline has passed.

If I don't hear anything from the WA ESD by next week, I'm going to recommend that my clients apply for a policy that has benefits at least equal to the WaLTCTA program. I can't imagine the state of WA denying the opt-out if someone owns a policy with benefits equal to (or better than) the WaLTCTA.

With any long-term care insurance policy you can always decrease your benefits at any time in the future. So, it's better to buy a little bit "too much" in benefit right now knowing that you can scale it back in the future. The last thing you want is to buy too small of a plan and then have your application to opt-out of the program denied because the benefits are too small.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
asdfgf
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by asdfgf »

Cucumbers wrote: Thu Apr 08, 2021 10:25 am How much will a “small policy” premium cost? I don’t care for the actual quality of the policy as long as it qualifies for the opt out. Any recommendations?
What I've found for myself is that it depends. On the low end you could probably get something for about $300/yr, but you might have some serious concerns if WA will consider it good enough for an exemption. On the high end for about $900/yr you can get a policy that is unequivocally better than WA's and have pretty much no worry at all.
suemarkp
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by suemarkp »

That seems to put the cross over point at around $150K/yr. So if you make more than that, you could buy the $900/yr policy and come out ahead. That's assuming WA doesn't hose you with the rules.

I decided to self insure for LTC. Saw too many companies stop writing policies and was afraid they wouldn't actually be there if I needed it 10+ years from now. And costs seem to keep increasing at a startling rate.
Mark | Somewhere in WA State
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 »

suemarkp wrote: Thu Apr 08, 2021 2:35 pm That seems to put the cross over point at around $150K/yr. So if you make more than that, you could buy the $900/yr policy and come out ahead. That's assuming WA doesn't hose you with the rules.

I decided to self insure for LTC. Saw too many companies stop writing policies and was afraid they wouldn't actually be there if I needed it 10+ years from now. And costs seem to keep increasing at a startling rate.
You're correct that older policies have had huge rate increases and continue to have huge rate increases. Newer policies have different rules that must be followed. These new rules penalize the insurance company if they request a rate increase by forcing them to lower their profits. Washington state passed this regulation in 2009. It's called the Rate Stability Regulation.

The top-selling LTCi policy has not had any rate increases on any of the policies they've sold in Washington since that Regulation was enacted.
Another one of the top selling LTCi policies has had one 15% rate increase on some of the policies they sold in Washington since 2009. Most of the policies they've sold in Washington since 2009 have had no rate increases.

You can't believe everything you read in the Wall Street Journal.

Regarding paying claims, last year over 100 companies paid claims on their LTCi policies. When a company stops selling new LTCi policies, they still have to pay all the claims for all the policies they ever did sell.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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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 »

suemarkp wrote: Thu Apr 08, 2021 2:35 pm Saw too many companies stop writing policies and was afraid they wouldn't actually be there if I needed it 10+ years from now.
If your LTC insurance company goes out of business, the state guaranty association would step in and pay the claims up to a limit. See

Kiplingers: Why You’re Still Protected if Your Long-Term-Care Insurer Goes Bust

It looks like in WA state, the guaranty association will cover up to $500K of benefits:

https://www.insurance.wa.gov/whats-guar ... es-it-work
sudohouse
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by sudohouse »

Where are people shopping in order to opt out. My household makes a combined 350k so it doesn't make sense for us to do the state one and are looking for a private one to opt out.
Topic Author
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 »

sudohouse wrote: Thu Apr 08, 2021 5:50 pm Where are people shopping in order to opt out. My household makes a combined 350k so it doesn't make sense for us to do the state one and are looking for a private one to opt out.
you will need to shop a few different insurance agents companies. Here is a partial list of companies you could explore. or you need to find an independent agent and not a captive agent.

Edit: see WoW's list
Last edited by Soon2BXProgrammer on Thu Apr 08, 2021 8:41 pm, edited 1 time in total.
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 »

Soon2BXProgrammer wrote: Thu Apr 08, 2021 7:51 pm
sudohouse wrote: Thu Apr 08, 2021 5:50 pm Where are people shopping in order to opt out. My household makes a combined 350k so it doesn't make sense for us to do the state one and are looking for a private one to opt out.
you will need to shop a few different insurance agents companies. Here is a partial list of companies you could explore. or you need to find an independent agent and not a captive agent.

LONG TERM CARE
MassMutual
Mutual of Omaha
Transamerica

HYBRIDS LIFE/LTCI (L), ANNUITY /LTCI (A)
Columbus Life (L)
John Hancock (L)
Lincoln National (L, A)
MassMutual (L)
Minnesota Life (L)
Nationwide (L)
Pacific Life (L)
Penn Mutual (L)
Protective Life (L)
Prudential (L)
State Life (L, A)
Transamerica (L)
Not sure where you got this list from, but it's not accurate.

Here's are the companies selling traditional long-term care insurance in Washington state (in alphabetical order):

Bankers Life & Casualty
Federal Long-Term Care Insurance Program (for federal employees and retirees and their spouses)
Genworth (only if you buy directly from the home office, not offered through agents/brokers)
Knights of Columbus (for members of the fraternal organization)
LifeSecure (worksite only)
Mutual of Omaha
National Guardian Life
New York Life
Northwestern Mutual
Thrivent
Transamerica (worksite only)


9 times out of 10 you should NOT buy a hybrid.
Hybrids typically only make sense for people who are not healthy enough to qualify for a traditional LTCi policy.

Many “hybrids” have pitfalls that no one is talking about, for example, they can lapse as you get older.
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 »

Ben Mathew wrote: Thu Apr 08, 2021 5:11 pm
suemarkp wrote: Thu Apr 08, 2021 2:35 pm Saw too many companies stop writing policies and was afraid they wouldn't actually be there if I needed it 10+ years from now.
If your LTC insurance company goes out of business, the state guaranty association would step in and pay the claims up to a limit. See

Kiplingers: Why You’re Still Protected if Your Long-Term-Care Insurer Goes Bust

It looks like in WA state, the guaranty association will cover up to $500K of benefits:

https://www.insurance.wa.gov/whats-guar ... es-it-work
Excellent points, Ben Mathew.

Of the 170+ companies that have sold long-term care insurance over the past 45 years, only 3 of them are going through liquidation (i.e. bankruptcy). All 3 were VERY small companies. All 3 had VERY low financial ratings. Combined all 3 of those companies make up about 1% of the long-term care insurance policies that are in-force. After liquidating the assets, the regulators will use the guaranty association funds to pay any remaining claims (up to the limits that each state's guaranty association has).

When a company stops "writing policies" that means they're no longer selling new policies.
They still have to pay all the future claims for all the policies they've sold in the past.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Topic Author
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 »

WoW2012 wrote: Thu Apr 08, 2021 8:27 pm
Soon2BXProgrammer wrote: Thu Apr 08, 2021 7:51 pm
sudohouse wrote: Thu Apr 08, 2021 5:50 pm Where are people shopping in order to opt out. My household makes a combined 350k so it doesn't make sense for us to do the state one and are looking for a private one to opt out.
you will need to shop a few different insurance agents companies. Here is a partial list of companies you could explore. or you need to find an independent agent and not a captive agent.

removed.
Not sure where you got this list from, but it's not accurate.

Here's are the companies selling traditional long-term care insurance in Washington state (in alphabetical order):

Bankers Life & Casualty
Federal Long-Term Care Insurance Program (for federal employees and retirees and their spouses)
Genworth (only if you buy directly from the home office, not offered through agents/brokers)
Knights of Columbus (for members of the fraternal organization)
LifeSecure (worksite only)
Mutual of Omaha
National Guardian Life
New York Life
Northwestern Mutual
Thrivent
Transamerica (worksite only)


9 times out of 10 you should NOT buy a hybrid.
Hybrids typically only make sense for people who are not healthy enough to qualify for a traditional LTCi policy.

Many “hybrids” have pitfalls that no one is talking about, for example, they can lapse as you get older.
Thanks for the better list.. mine wasn't "washington specific"
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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 »

asdfgf wrote: Thu Apr 08, 2021 1:55 pm
Cucumbers wrote: Thu Apr 08, 2021 10:25 am How much will a “small policy” premium cost? I don’t care for the actual quality of the policy as long as it qualifies for the opt out. Any recommendations?
What I've found for myself is that it depends. On the low end you could probably get something for about $300/yr, but you might have some serious concerns if WA will consider it good enough for an exemption. On the high end for about $900/yr you can get a policy that is unequivocally better than WA's and have pretty much no worry at all.
I agree with WoW2012 that if the benefits are equal or greater to the state's program that it's very unlikely to be a problem. The price of the policy will depend significantly on your age and health. In my case, it's looking like I can probably get a policy with slightly more benefits than the state program for about $450/year, about half what the payroll tax would cost me.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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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 »

WoW2012 wrote: Thu Apr 08, 2021 8:38 pm Of the 170+ companies that have sold long-term care insurance over the past 45 years, only 3 of them are going through liquidation (i.e. bankruptcy). All 3 were VERY small companies. All 3 had VERY low financial ratings. Combined all 3 of those companies make up about 1% of the long-term care insurance policies that are in-force. After liquidating the assets, the regulators will use the guaranty association funds to pay any remaining claims (up to the limits that each state's guaranty association has).
Good to know this, thanks.
asdfgf
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by asdfgf »

willthrill81 wrote: Thu Apr 08, 2021 10:15 pm
asdfgf wrote: Thu Apr 08, 2021 1:55 pm
Cucumbers wrote: Thu Apr 08, 2021 10:25 am How much will a “small policy” premium cost? I don’t care for the actual quality of the policy as long as it qualifies for the opt out. Any recommendations?
What I've found for myself is that it depends. On the low end you could probably get something for about $300/yr, but you might have some serious concerns if WA will consider it good enough for an exemption. On the high end for about $900/yr you can get a policy that is unequivocally better than WA's and have pretty much no worry at all.
I agree with WoW2012 that if the benefits are equal or greater to the state's program that it's very unlikely to be a problem. The price of the policy will depend significantly on your age and health. In my case, it's looking like I can probably get a policy with slightly more benefits than the state program for about $450/year, about half what the payroll tax would cost me.
Does your $450 plan have a zero day elimination period and inflation protection. If it lacks those things, WA can easily argue that your benefits are not equal or greater.
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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 »

asdfgf wrote: Thu Apr 08, 2021 11:27 pm
willthrill81 wrote: Thu Apr 08, 2021 10:15 pm
asdfgf wrote: Thu Apr 08, 2021 1:55 pm
Cucumbers wrote: Thu Apr 08, 2021 10:25 am How much will a “small policy” premium cost? I don’t care for the actual quality of the policy as long as it qualifies for the opt out. Any recommendations?
What I've found for myself is that it depends. On the low end you could probably get something for about $300/yr, but you might have some serious concerns if WA will consider it good enough for an exemption. On the high end for about $900/yr you can get a policy that is unequivocally better than WA's and have pretty much no worry at all.
I agree with WoW2012 that if the benefits are equal or greater to the state's program that it's very unlikely to be a problem. The price of the policy will depend significantly on your age and health. In my case, it's looking like I can probably get a policy with slightly more benefits than the state program for about $450/year, about half what the payroll tax would cost me.
Does your $450 plan have a zero day elimination period and inflation protection. If it lacks those things, WA can easily argue that your benefits are not equal or greater.
Yes, it does.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
whatsagoodname
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by whatsagoodname »

This might be a silly question... payroll tax, does bonuses and stocks compensation considered as payroll, too, or just the base pay? Thanks!
whatsagoodname
Posts: 3
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by whatsagoodname »

WoW2012 wrote: Thu Apr 08, 2021 8:27 pm
Soon2BXProgrammer wrote: Thu Apr 08, 2021 7:51 pm
sudohouse wrote: Thu Apr 08, 2021 5:50 pm Where are people shopping in order to opt out. My household makes a combined 350k so it doesn't make sense for us to do the state one and are looking for a private one to opt out.
you will need to shop a few different insurance agents companies. Here is a partial list of companies you could explore. or you need to find an independent agent and not a captive agent.

LONG TERM CARE
MassMutual
Mutual of Omaha
Transamerica

HYBRIDS LIFE/LTCI (L), ANNUITY /LTCI (A)
Columbus Life (L)
John Hancock (L)
Lincoln National (L, A)
MassMutual (L)
Minnesota Life (L)
Nationwide (L)
Pacific Life (L)
Penn Mutual (L)
Protective Life (L)
Prudential (L)
State Life (L, A)
Transamerica (L)
Not sure where you got this list from, but it's not accurate.

Here's are the companies selling traditional long-term care insurance in Washington state (in alphabetical order):

Bankers Life & Casualty
Federal Long-Term Care Insurance Program (for federal employees and retirees and their spouses)
Genworth (only if you buy directly from the home office, not offered through agents/brokers)
Knights of Columbus (for members of the fraternal organization)
LifeSecure (worksite only)
Mutual of Omaha
National Guardian Life
New York Life
Northwestern Mutual
Thrivent
Transamerica (worksite only)


9 times out of 10 you should NOT buy a hybrid.
Hybrids typically only make sense for people who are not healthy enough to qualify for a traditional LTCi policy.

Many “hybrids” have pitfalls that no one is talking about, for example, they can lapse as you get older.
not sure whether this is allowed, please delete if it is not, but WoW2012 can you DM me? I can't DM on my side, yet. Thanks!
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 »

whatsagoodname wrote: Fri Apr 09, 2021 11:49 am not sure whether this is allowed, please delete if it is not, but WoW2012 can you DM me? I can't DM on my side, yet. Thanks!

I will not DM with anyone on this forum.
No one on this forum is able to email me or send me a private message.
If you have a question for me, post it and I will reply.
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 »

whatsagoodname wrote: Fri Apr 09, 2021 11:44 am This might be a silly question... payroll tax, does bonuses and stocks compensation considered as payroll, too, or just the base pay? Thanks!
ALL of it is subject to the tax.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
asdfgf
Posts: 110
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by asdfgf »

WoW2012 wrote: Fri Apr 09, 2021 1:58 pm
whatsagoodname wrote: Fri Apr 09, 2021 11:49 am not sure whether this is allowed, please delete if it is not, but WoW2012 can you DM me? I can't DM on my side, yet. Thanks!

I will not DM with anyone on this forum.
No one on this forum is able to email me or send me a private message.
If you have a question for me, post it and I will reply.
Do the companies in the list you posted (copied below) all offer at least some non-hybrid products?

Bankers Life & Casualty
Federal Long-Term Care Insurance Program (for federal employees and retirees and their spouses)
Genworth (only if you buy directly from the home office, not offered through agents/brokers)
Knights of Columbus (for members of the fraternal organization)
LifeSecure (worksite only)
Mutual of Omaha
National Guardian Life
New York Life
Northwestern Mutual
Thrivent
Transamerica (worksite only)
WoW2012
Posts: 939
Joined: Sun Dec 23, 2012 11:28 am

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

Post by WoW2012 »

asdfgf wrote: Fri Apr 09, 2021 3:09 pm
WoW2012 wrote: Fri Apr 09, 2021 1:58 pm
whatsagoodname wrote: Fri Apr 09, 2021 11:49 am not sure whether this is allowed, please delete if it is not, but WoW2012 can you DM me? I can't DM on my side, yet. Thanks!

I will not DM with anyone on this forum.
No one on this forum is able to email me or send me a private message.
If you have a question for me, post it and I will reply.
Do the companies in the list you posted (copied below) all offer at least some non-hybrid products?

Bankers Life & Casualty
Federal Long-Term Care Insurance Program (for federal employees and retirees and their spouses)
Genworth (only if you buy directly from the home office, not offered through agents/brokers)
Knights of Columbus (for members of the fraternal organization)
LifeSecure (worksite only)
Mutual of Omaha
National Guardian Life
New York Life
Northwestern Mutual
Thrivent
Transamerica (worksite only)
All of those companies sell traditional LTCi.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
asdfgf
Posts: 110
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by asdfgf »

WoW2012 wrote: Fri Apr 09, 2021 3:16 pm
All of those companies sell traditional LTCi.
So, if I'm understanding you correctly, a random consumer (not fed employee or Knights of Columbus) going through an agent could only purchase from the following

Bankers Life & Casualty
Mutual of Omaha
National Guardian Life
New York Life
Northwestern Mutual
Thrivent


Is that right? Did I miss any?

I excluded the (worksite) ones, because I wasn't sure what that meant.
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mags
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by mags »

I just got a quote for Mutual of Omaha 75k policy ( lowest they offer). Annual premium for 45 male $300. Female $480. We are planning to self insure but trying to avoid the new tax.
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 »

asdfgf wrote: Fri Apr 09, 2021 7:53 pm
WoW2012 wrote: Fri Apr 09, 2021 3:16 pm
All of those companies sell traditional LTCi.
So, if I'm understanding you correctly, a random consumer (not fed employee or Knights of Columbus) going through an agent could only purchase from the following

Bankers Life & Casualty
Mutual of Omaha
National Guardian Life
New York Life
Northwestern Mutual
Thrivent


Is that right? Did I miss any?

I excluded the (worksite) ones, because I wasn't sure what that meant.
Correct.
Worksite means the policy can only be purchased through their employer as part of a "group" coverage.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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