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

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

Post by truenyer »

Soon2BXProgrammer wrote: Mon May 03, 2021 3:24 pm
suemarkp wrote: Mon May 03, 2021 2:37 pm I was in the process of emailing our Union focals as to why they hadn't told us this was coming and how to opt out. We are a highly paid group of engineers. Then i discovered that this bill excludes people covered by a collective bargaining agreement. So not only did SEIU sponsor this, they opted themselves, and most other unions, out of this. It appears that when the union contract is renewed, then how this gets implemented will come up.
Can you provide a quote about the exclusion for people covered by a collective bargaining agreement?
https://app.leg.wa.gov/RCW/default.aspx?cite=50B.04.080
Item 3
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 »

How does this new law and tax work for someone who is currently self-employed, does not have their own LTC policy, and chooses not to opt-in to the state’s program... but then many years down the road becomes a W-2 employee?

Are they permanently opted out? Permanently forced in when they become a W-2 employee? Would they have a window of opportunity when they become a W-2 employee to purchase their own policy to opt out?

It seems ludicrous that the opt-out window would be a one-time thing that doesn’t account for changing circumstances over time.
arf1410
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by arf1410 »

truenyer wrote: Mon May 03, 2021 3:26 pm
Soon2BXProgrammer wrote: Mon May 03, 2021 3:24 pm
suemarkp wrote: Mon May 03, 2021 2:37 pm I was in the process of emailing our Union focals as to why they hadn't told us this was coming and how to opt out. We are a highly paid group of engineers. Then i discovered that this bill excludes people covered by a collective bargaining agreement. So not only did SEIU sponsor this, they opted themselves, and most other unions, out of this. It appears that when the union contract is renewed, then how this gets implemented will come up.
Can you provide a quote about the exclusion for people covered by a collective bargaining agreement?
https://app.leg.wa.gov/RCW/default.aspx?cite=50B.04.080
Item 3
Its a new tax. Taxes can be added or increased without needing to change a contract. So I dont believe that most union contracts will exempt folks from this tax.
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truenyer
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by truenyer »

arf1410 wrote: Tue May 04, 2021 2:01 pm
truenyer wrote: Mon May 03, 2021 3:26 pm
Soon2BXProgrammer wrote: Mon May 03, 2021 3:24 pm
suemarkp wrote: Mon May 03, 2021 2:37 pm I was in the process of emailing our Union focals as to why they hadn't told us this was coming and how to opt out. We are a highly paid group of engineers. Then i discovered that this bill excludes people covered by a collective bargaining agreement. So not only did SEIU sponsor this, they opted themselves, and most other unions, out of this. It appears that when the union contract is renewed, then how this gets implemented will come up.
Can you provide a quote about the exclusion for people covered by a collective bargaining agreement?
https://app.leg.wa.gov/RCW/default.aspx?cite=50B.04.080
Item 3
Its a new tax. Taxes can be added or increased without needing to change a contract. So I dont believe that most union contracts will exempt folks from this tax.
Not true. First, the law explicitly states CBAs prior to 2018 are exempt. Second, the same thing happened with PFML. I didn’t pay into the program until my contract was renewed.

Edit: also it’s not a tax. It’s a premium paid to a benefit program.
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 »

Here is another source for information relating to this. https://www.jdsupra.com/legalnews/updat ... n-7882872/
Mark | Somewhere in WA State
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 »

truenyer wrote: Sun May 02, 2021 3:46 pm
Isabelle77 wrote: Thu Apr 29, 2021 11:57 am Scott Olson
Scott@ltcshop.com
Office: 877-727-9582


This is the agent we are using, he's on the west side but nowhere near us. Very reasonable quotes, we wound up choosing a Banker's Life policy that covers exactly what the new WA state plan will. $100 a day up to 365 days.
Bankers Life certainly had the best rates. But very bad customer reviews. Did you factor that into your decision at all??
It was kind of a positive for me. It told me I could expect lower premiums. If you know of a even worse company with even lower premiums, sign me up. I have no intention of using the policy at all. I just want the lowest premium that will get me an exemption.
euler
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by euler »

Kookaburra wrote: Mon May 03, 2021 11:00 pm How does this new law and tax work for someone who is currently self-employed, does not have their own LTC policy, and chooses not to opt-in to the state’s program... but then many years down the road becomes a W-2 employee?

Are they permanently opted out? Permanently forced in when they become a W-2 employee? Would they have a window of opportunity when they become a W-2 employee to purchase their own policy to opt out?

It seems ludicrous that the opt-out window would be a one-time thing that doesn’t account for changing circumstances over time.
I don't have the answer, but wanted to bump this, as I'm sure it applies to a LOT of folks in the tech industry (who seem well represented on Bogleheads). The elephant in the room, IMO. Does anyone know?
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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: Sat May 01, 2021 1:34 pm
willthrill81 wrote: Sat May 01, 2021 1:15 pm
WoW2012 wrote: Sat May 01, 2021 10:50 am
willthrill81 wrote: Sat May 01, 2021 10:31 am Once the state verifies that I did have a LTC policy in place at the time of the opt out window, I'll drop my LTC policy and remain permanently opted-out.
That loophole is in the process of being closed.
Won't that require a change to the law?
No.
The ESD writes the rules.
So the ESD is authorized to make any changes regarding eligibility for the opt-out that they want when they want?
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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 »

Jordon wrote: Sat May 01, 2021 11:40 am
WoW2012 wrote: Sat May 01, 2021 10:50 am
willthrill81 wrote: Sat May 01, 2021 10:31 am Once the state verifies that I did have a LTC policy in place at the time of the opt out window, I'll drop my LTC policy and remain permanently opted-out.

That loophole is in the process of being closed.
Source? I can't find a lot of information about this whole thing.
The lack of a reply from the insurance salesperson is telling.
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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.
As a reminder, the law does not (as of yet) state that LTCi policy one owns must have all of the same characteristics as the state's plan. Right now, any LTCi policy will do. But this is an evolving situation, so be mindful.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” 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 »

Kookaburra wrote: Mon May 03, 2021 11:00 pm How does this new law and tax work for someone who is currently self-employed, does not have their own LTC policy, and chooses not to opt-in to the state’s program... but then many years down the road becomes a W-2 employee?
The law says the following about self-employed individuals:
Sec. 6. RCW 50B.04.090 and 2020 c 98 s 5 are each amended to read as follows:
(1) Beginning January 1, 2022, any self-employed person, including a sole proprietor, independent contractor, partner, or joint venturer, may elect coverage under this chapter. Coverage must be elected before January 1, 2025, or within three years of becoming self-employed for the first time. Those electing coverage under this subsection are responsible for payment of one hundred percent of all premiums assessed to an employee under RCW 50B.04.080. The self-employed person must file a notice of election in writing with the employment security department, in the manner required by the employment security department in rule. The self-employed person is eligible for benefits after paying the long-term services and supports premium for the time required under RCW 50B.04.050.
(2) A self-employed person who has elected coverage may not withdraw from coverage((, at such times as the employment security department may adopt by rule, by filing a notice of withdrawal in writing with the employment security department, with the withdrawal to take effect not sooner than thirty days after filing the notice with the employment security department)).
(3) A self-employed person who elects coverage must continue to pay premiums until such time that the individual retires from the workforce or is no longer self-employed. To cease premium assessment and collection, the self-employed person must file a notice with the employment security department if the individual retires from the workforce or is no longer self-employed.
https://www.ltcinsuranceconsultants.com ... st_act.pdf

Based on this, it seems that in the scenario you describe (i.e., a self-employed person later becomes an employee), the individual would have to begin paying the tax upon becoming an employee.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” 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 »

Kookaburra wrote: Fri May 07, 2021 7:16 pm
Jordon wrote: Sat May 01, 2021 11:40 am
WoW2012 wrote: Sat May 01, 2021 10:50 am
willthrill81 wrote: Sat May 01, 2021 10:31 am Once the state verifies that I did have a LTC policy in place at the time of the opt out window, I'll drop my LTC policy and remain permanently opted-out.
That loophole is in the process of being closed.
Source? I can't find a lot of information about this whole thing.
The lack of a reply from the insurance salesperson is telling.
Here's what the law currently says about the matter.
An employee who attests that the employee has long-term care insurance may apply for an exemption from the premium assessment under RCW 50B.04.080. An exempt employee may not become a qualified individual or eligible beneficiary and is permanently ineligible for coverage under this title.
https://app.leg.wa.gov/RCW/default.aspx?cite=50B.04.085

No specifics about needed characteristics of the LTCi are provided in this or any section of the law, and this section makes it very clear that those qualify for an exemption are permanently ineligible. The ESD cannot change this on their own; the law would have to be changed.
“Good and ill have not changed since yesteryear; nor are they one thing among Elves and Dwarves and another among Men.” J.R.R. Tolkien, The Lord of the Rings
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 »

willthrill81 wrote: Fri May 07, 2021 9:00 pm
Kookaburra wrote: Fri May 07, 2021 7:16 pm
Jordon wrote: Sat May 01, 2021 11:40 am
WoW2012 wrote: Sat May 01, 2021 10:50 am
willthrill81 wrote: Sat May 01, 2021 10:31 am Once the state verifies that I did have a LTC policy in place at the time of the opt out window, I'll drop my LTC policy and remain permanently opted-out.
That loophole is in the process of being closed.
Source? I can't find a lot of information about this whole thing.
The lack of a reply from the insurance salesperson is telling.
Here's what the law currently says about the matter.
An employee who attests that the employee has long-term care insurance may apply for an exemption from the premium assessment under RCW 50B.04.080. An exempt employee may not become a qualified individual or eligible beneficiary and is permanently ineligible for coverage under this title.
https://app.leg.wa.gov/RCW/default.aspx?cite=50B.04.085

No specifics about needed characteristics of the LTCi are provided in this or any section of the law, and this section makes it very clear that those qualify for an exemption are permanently ineligible. The ESD cannot change this on their own; the law would have to be changed.
Yep, that’s my take on it too. Both of your most recent two posts point to the same structure of the law, that being that there is a once-in-time window to opt out (as an employee). If you don’t take it, you are forever locked in. If you do take it, you are forever locked out, without qualification.

The natural effect of it is that, in the absence of a new law, in a matter of 30 years all employees will be paying the tax (uh, I mean, premium).

Seems like an incredibly ridiculous concept, but at least we know the rules of the game now before the window closes. When I get my exemption letter, I plan on laminating or framing it :)
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