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

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RoyHobbs9
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by RoyHobbs9 »

Soon2BXProgrammer wrote: Wed Jun 09, 2021 1:47 pm
RoyHobbs9 wrote: Wed Jun 09, 2021 1:13 pm "The initial premium rate is fifty-eight hundredths of one percent of the individual's wages. Beginning January 1, 2024, and biennially thereafter, the premium rate shall be set by the pension funding council at a rate no greater than fifty-eight hundredths of one percent." -- RCW 50B.04.080

I know there is a small panel in charge of making sure this remains solvent that is supposed to review it every 2 years. Could that panel recommend to the lawmakers that the tax needs to be increased (every 2 years)? I read somewhere that analysts thought the tax needed to start at .66% so I'm worried that it will increase in the future despite what is in the RCW. What is stopping that from being revised?

Thanks in advance,
Healthy 45 year-old
There is no guarantee what the tax will be in the future to keep the program solvent. If you don't want to pay the tax, the best?? option is to get a small LTCi policy. The largest deciding factor is how large is your income.
Big enough to not want to be part of this for the rest of my working life. My wife luckily had a group policy to enroll so I had her do that last week. If you know anyone at MSFT, their best group option (Transamerica) expires on June 10th. Same for AMZN, except they have until the 18th. Crazy thing is, or maybe not so crazy, Transamerica is hitting the eject button when it comes to both individual and group LTC on June 30, 2021.

I'm a 1099, but I do W2 myself. Do you see this current administration eventually targeting S-Corps and distributions to and try and address the silver tsunami? I can't believe there is an opt-in program for the self-employed. I'm definitely looking at private LTC, but didn't want to be looking at it until I was in my mid-50s.

I'm leaning toward a hybrid IUL/LTC product due to price and if I don't use the LTC, at least my family gets it when I eventually croak. The Return of Premium Riders on the traditional LTC policies take them from pricy to too pricey for my taste.
RoyHobbs9
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by RoyHobbs9 »

WoW2012 wrote: Wed Jun 09, 2021 1:52 pm
RoyHobbs9 wrote: Wed Jun 09, 2021 1:13 pm "The initial premium rate is fifty-eight hundredths of one percent of the individual's wages. Beginning January 1, 2024, and biennially thereafter, the premium rate shall be set by the pension funding council at a rate no greater than fifty-eight hundredths of one percent." -- RCW 50B.04.080

I know there is a small panel in charge of making sure this remains solvent that is supposed to review it every 2 years. Could that panel recommend to the lawmakers that the tax needs to be increased (every 2 years)? I read somewhere that analysts thought the tax needed to start at .66% so I'm worried that it will increase in the future despite what is in the RCW. What is stopping that from being revised?

Thanks in advance,
Healthy 45 year-old

Because of the low interest rates caused by COVID, the state's actuary has recommended the "premium" be increased from .58% to .70%.

OR

Pass a law that allows the funds to be invested in equities.

The way the law was first written in 2019, it is more likely that they will lower the benefits or make eligibility stricter, rather than increase the tax.
If they were to increase it to .70%, I don't see it happening until right after an election, on a Friday at 2am.

I like the equities idea. . . I think I voted for that.
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 »

RoyHobbs9 wrote: Wed Jun 09, 2021 4:25 pm
I'm leaning toward a hybrid IUL/LTC product due to price and if I don't use the LTC, at least my family gets it when I eventually croak. The Return of Premium Riders on the traditional LTC policies take them from pricy to too pricey for my taste.
Most IUL policies do NOT qualify as "long-term care insurance" under Washington state law.
Please share the details of the IUL/LTC particularly:
1) How the "LTC" rider works.
2) How long the policy is guaranteed to remain in-force.

Hybrids are sold as the best of all worlds with three different ways to benefit from the policy:
1) If you need cash, you can cancel the policy and get your cash.
2) If you need long-term care, you can use the death benefit to pay for your long-term care.
3) If you don’t need long-term care, then your heirs will get the tax-free death benefit.
OR
4) you and your heirs could get NOTHING from the policy.

Unfortunately, point #4 is a very real possibility and it is rarely discussed.
Even if you pay your premiums on-time, every year, and NEVER miss a payment, the policy could lapse.
Not every hybrid, but many hybrid policies can lapse.
If the policy lapses, you will lose every penny you put into the policy.
If the policy lapses you will get NOTHING from the policy:

No cash value.
No long-term care benefits.
No death benefit.

Most hybrid policies are NOT guaranteed to stay in-force for the rest of your life. They might lapse when you reach age 90 or 85 or 80 or maybe even sooner than that. The only way to know that the policy will remain in-force for life is if you look at the page of the illustration that shows “guaranteed values”. That page will show you the guaranteed death benefit every year of the policy. If the death benefit is zero before you reach age 100 that means you could lose everything you put into the policy and get NOTHING out of the policy. All your premiums would be wasted.
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 »

Question for WoW2012


I thought the WA plan had a zero day elimination period, but my agent is telling me it is a 45 day elimination period. Do you have any idea why I might be encountering this discrepancy?
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 »

asdfgf wrote: Wed Jun 09, 2021 8:14 pm Question for WoW2012


I thought the WA plan had a zero day elimination period, but my agent is telling me it is a 45 day elimination period. Do you have any idea why I might be encountering this discrepancy?
Why does it matter? Are you trying to get a private policy that is “at least as good as” the WA LTC Act?
mrsgoldilocks
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by mrsgoldilocks »

Soon2BXProgrammer wrote: Tue Feb 16, 2021 10:38 pm I was alerted to:
Washington State Long Term Care Trust Act
https://www.ltc-associates.com/educatio ... trust-act/

Short-term care benefit, publicly funded by a 0.58% payroll tax on all wages and remuneration, withheld quarterly by employers
Only Washington residents can qualify for benefits
Residents who move out of state for 5 or more years forfeit both benefits and premiums
Benefits are paid in $100 "stackable" units, up to a $36,500 lifetime maximum

----
From my reading, regardless of the amount of tax paid, people get the same benefit. So it is punitive for high income earners.

I was never in the market for long term care but there are exemptions for people who have their own policy. Has anyone looked into this in detail?

From a pure dollars and cents perspective. I am in an encore job as a Federal Employee. I could sign up in my initial enrollment for the Fed LTC for the minimum benefit and it would be way less then the payroll tax...
Yes, I heard about it. There was an insurance agent trying to sell me Whole Life Insurance with LTC rider as she cited this as an example that I may be forced to pay into LTC by my state if I don't have LTC insurance.

Before I continue, I do not mean to offend residence in Washington State or anyone getting upset by this tax. Based on my limited understanding, Washington State has no personal income tax, so if you take it as another form of personal income tax, then 0.58% is indeed not that much compared to what ppl paying in other states.
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 »

Kookaburra wrote: Wed Jun 09, 2021 8:30 pm
asdfgf wrote: Wed Jun 09, 2021 8:14 pm Question for WoW2012


I thought the WA plan had a zero day elimination period, but my agent is telling me it is a 45 day elimination period. Do you have any idea why I might be encountering this discrepancy?
Why does it matter? Are you trying to get a private policy that is “at least as good as” the WA LTC Act?
Yes. I realize that it may not matter. But the difference in cost is so small compared to the savings that I figure that I might as well take every precaution not to get hit by 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 »

asdfgf wrote: Wed Jun 09, 2021 8:14 pm Question for WoW2012


I thought the WA plan had a zero day elimination period, but my agent is telling me it is a 45 day elimination period. Do you have any idea why I might be encountering this discrepancy?
I listened to the WaLTCTA actuary at a national LTCi conference in April (which was held virtually this year via Zoom) and he said that the pricing he'd worked up for the WaLTCTA assumed a 45-day elimination period.
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 »

WoW2012 wrote: Wed Jun 09, 2021 9:15 pm
asdfgf wrote: Wed Jun 09, 2021 8:14 pm Question for WoW2012


I thought the WA plan had a zero day elimination period, but my agent is telling me it is a 45 day elimination period. Do you have any idea why I might be encountering this discrepancy?
I listened to the WaLTCTA actuary at a national LTCi conference in April (which was held virtually this year via Zoom) and he said that the pricing he'd worked up for the WaLTCTA assumed a 45-day elimination period.
Thanks. Just to make sure I'm clear, are you saying that while above may explain the discrepancy, the WA plan actually has a zero day elimination period.
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: Wed Jun 09, 2021 10:08 pm
WoW2012 wrote: Wed Jun 09, 2021 9:15 pm
asdfgf wrote: Wed Jun 09, 2021 8:14 pm Question for WoW2012


I thought the WA plan had a zero day elimination period, but my agent is telling me it is a 45 day elimination period. Do you have any idea why I might be encountering this discrepancy?
I listened to the WaLTCTA actuary at a national LTCi conference in April (which was held virtually this year via Zoom) and he said that the pricing he'd worked up for the WaLTCTA assumed a 45-day elimination period.
Thanks. Just to make sure I'm clear, are you saying that while above may explain the discrepancy, the WA plan actually has a zero day elimination period.
No. That's not what I'm saying.
I'm saying the WALTCTA has a 45 day elimination period.
I have not seen anything that would indicate the Trust Act has a zero day elimination period.
What is your basis for thinking it has a zero day elimination period?
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 »

WoW2012 wrote: Wed Jun 09, 2021 10:28 pm
What is your basis for thinking it has a zero day elimination period?
1. That is what one insurance agent told me
2. I thought I saw it posted earlier in this thread. I'll see if I can find it.
APX32
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by APX32 »

This is a horribly written law with many confusing details and has got everyone i know in a mad rush trying get their own private LTC plan for the explicit purpose of opting out of the state plan and then cancelling immediately once the opt-out is approved. This my plan as well and fortunate that my employer offered an option I could pursue instead of shopping around.

I have no plans to obtain LTC insurance ever. If I should one day need any sort of care at all in old age, I’m planning to use my retirement savings. This WA scam is just another stealth income tax, maybe legislators trying to see what they can get away with before any legal challenges.

As for this specific law, I don’t think they care about the folks who are using this one time opt-out opportunity in 2021. They know they’ve got everyone else trapped permanently starting in 2022. Anyone who moves here, soon to be adults entering the workforce in the coming years, those who may be unaware and forget to opt out this year are just SOL.
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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 »

Here is ESD’s response to public comments submitted. It is very illuminating...

https://media.esd.wa.gov/esdwa/Default/ ... 0Final.pdf
Whakamole
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Whakamole »

APX32 wrote: Wed Jun 09, 2021 11:51 pm This is a horribly written law with many confusing details and has got everyone i know in a mad rush trying get their own private LTC plan for the explicit purpose of opting out of the state plan and then cancelling immediately once the opt-out is approved. This my plan as well and fortunate that my employer offered an option I could pursue instead of shopping around.

I have no plans to obtain LTC insurance ever. If I should one day need any sort of care at all in old age, I’m planning to use my retirement savings. This WA scam is just another stealth income tax, maybe legislators trying to see what they can get away with before any legal challenges.

As for this specific law, I don’t think they care about the folks who are using this one time opt-out opportunity in 2021. They know they’ve got everyone else trapped permanently starting in 2022. Anyone who moves here, soon to be adults entering the workforce in the coming years, those who may be unaware and forget to opt out this year are just SOL.
The lack of an income tax attracted many to Washington State. The presence of an income tax (and this will not be the first) will hopefully scale that back. I'd love for the big tech companies here to have offices in other states.
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 »

I was told by my broker the other day that after tomorrow, no LTC companies will be issuing 0 inflation plans to anyone under the age of 40.

I think this is to eliminate all the youngsters (I'm one of 'em) who're just looking for a quick opt out.
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 »

StoopieHippo wrote: Thu Jun 10, 2021 2:58 pm I was told by my broker the other day that after tomorrow, no LTC companies will be issuing 0 inflation plans to anyone under the age of 40.

I think this is to eliminate all the youngsters (I'm one of 'em) who're just looking for a quick opt out.
Every company is different.
Some companies are not taking ANY applications from people in Washington under age 40.
Some companies still are.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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 »

WoW2012 wrote: Thu Jun 10, 2021 3:02 pm
StoopieHippo wrote: Thu Jun 10, 2021 2:58 pm I was told by my broker the other day that after tomorrow, no LTC companies will be issuing 0 inflation plans to anyone under the age of 40.

I think this is to eliminate all the youngsters (I'm one of 'em) who're just looking for a quick opt out.
Every company is different.
Some companies are not taking ANY applications from people in Washington under age 40.
Some companies still are.
Ah good to know. Ultimately, we decided on a plan we might actually keep going forward. We're still pretty far from the optimal age (DH is 43 this year), but just in case is still ok with me.
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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 »

StoopieHippo wrote: Thu Jun 10, 2021 3:09 pm We're still pretty far from the optimal age (DH is 43 this year), but just in case is still ok with me.
I am confused why does everyone think that the optimal age is older?
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 »

WoW2012 wrote: Thu Jun 10, 2021 3:02 pm
StoopieHippo wrote: Thu Jun 10, 2021 2:58 pm I was told by my broker the other day that after tomorrow, no LTC companies will be issuing 0 inflation plans to anyone under the age of 40.

I think this is to eliminate all the youngsters (I'm one of 'em) who're just looking for a quick opt out.
Every company is different.
Some companies are not taking ANY applications from people in Washington under age 40.
Some companies still are.
Could you let me know which companies are still taking applications for WA residents under age 40?
APX32
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by APX32 »

WoW2012 wrote: Thu Jun 10, 2021 9:54 am
APX32 wrote: Wed Jun 09, 2021 11:51 pm This is a horribly written law with many confusing details and has got everyone i know in a mad rush trying get their own private LTC plan for the explicit purpose of opting out of the state plan and then cancelling immediately once the opt-out is approved. This my plan as well and fortunate that my employer offered an option I could pursue instead of shopping around.

I have no plans to obtain LTC insurance ever. If I should one day need any sort of care at all in old age, I’m planning to use my retirement savings. This WA scam is just another stealth income tax, maybe legislators trying to see what they can get away with before any legal challenges.

As for this specific law, I don’t think they care about the folks who are using this one time opt-out opportunity in 2021. They know they’ve got everyone else trapped permanently starting in 2022. Anyone who moves here, soon to be adults entering the workforce in the coming years, those who may be unaware and forget to opt out this year are just SOL.

To opt-out of the payroll tax you have to do two things:
1) "attest" to owning a policy and
2) prove that you're over the age of 18.

If you plan on cancelling your policy after 2 months, why even bother getting a policy. Just "attest" that you own a policy. Since, in your view, the state is not going to verify if you actually own a policy, why bother even applying for one.
I should clarify, I’m taking the safe option by getting a private plan just in case something changes by Oct 1 when ESD is ready to process exemptions.

As the law is written today, yes, you attest and you’ll presumably be approved, no questions asked. But if they decide to do random audits and I’ve attested without actually having a plan, it’ll be too late to get anything. I’m not taking any chances.

The $300-400 I’m paying for the private plan is more than worth it considering the thousands of $$ I’m looking to save as a high earner over the coming years.
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TheHouse7
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by TheHouse7 »

daave wrote: Thu May 13, 2021 9:52 pm WA DSHS has put together a website, http://www.wacaresfund.wa.gov/private-insurance/, which clarifies:
  • Exemptions are permanent, there's no re-attestation each year that you're still covered
  • To get an exemption, any LTCI plan as defined under RCW 48.83.020 will do
  • You need the coverage by Nov 1 2021 to get an exemption
  • You must apply for the exemption between Oct 1 2021 and Dec 31 2021
My employer offers a group plan which does not require a health exam, and with the minimal possible benefit costs $20/month. Seems I should be able to get this for 1-2 months, and for $20-40 total avoid a 0.58% payroll tax for the long term (which would cost me several thousand $/year). I also got quotes from a local agent which were closer to $40/month (healthy 32 year old male).
Thank you so much for this info. (Healthy 34 year old male)
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.
chupapa
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When WA required us to have LTC and what will be best for my situation?

Post by chupapa »

[Post merged into here --admin LadyGeek]

I have read a lot about the LTC and I am very confused of what is the requirement to be eligible to opt out from the state program. I initially looking for just traditional LTCi which the cheapest option hoping to cancel after hold it for 1-2 years. However, there were debate whether the state will do the audit and check back if you still have the policy active. So my choice kind of swing here and there and I would love opinion of what you think of my options

1. Getting cheapest policy knowing that I will cancel it later, maybe 1-2 years. let's say the policy is $50 a month and i hold it for 2 year then it is ~1200 that I will go waste. If state doesn't do audit, then happy! otherwise, I probably have to buy one again? -- The good thing here is I can pay policy using my HSA account.
2. Finding a traditional LTC policy that I can keep, most likely if I am old/unhealthy I am gonna fly back to my home country where everything is much cheaper and healthcare is same/better than US, this probably not that cheap.
3. So far, I get to VUL policy from Nationwide where I pay around $120 for 10 years and it can be used international. So I will end up pay about $14,400 for the premium with death benefit $100,000 or LTC$ 100,000. This case, money will come back either death benefit or LTC. I know VUL is not a big favor here but I just have to include all the option I have. I also get another IUL from Omaha, haven't checked about international option yet but the plan pays only $45 a month which an option to get partial or full money back at year 10, 20, 21, 22, 23, 24, 25. The quotes asking me to pay for 52 years though (until age 85) which I have to come back and ask if I can do something similar like nationwide to pay for 10 years only or something.

But in general, which one is a better company? Mutual Omaha or Nationwide

Note: Single, Female, 33, Not really looking for LTC as I probably won't get married or have kids.
Thanks!
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by LadyGeek »

I merged chupapa's post into a similar discussion.
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Soon2BXProgrammer
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Re: When WA required us to have LTC and what will be best for my situation?

Post by Soon2BXProgrammer »

chupapa wrote: Fri Jun 11, 2021 1:57 am [Post merged into here --admin LadyGeek]

I have read a lot about the LTC and I am very confused of what is the requirement to be eligible to opt out from the state program. I initially looking for just traditional LTCi which the cheapest option hoping to cancel after hold it for 1-2 years. However, there were debate whether the state will do the audit and check back if you still have the policy active. So my choice kind of swing here and there and I would love opinion of what you think of my options

1. Getting cheapest policy knowing that I will cancel it later, maybe 1-2 years. let's say the policy is $50 a month and i hold it for 2 year then it is ~1200 that I will go waste. If state doesn't do audit, then happy! otherwise, I probably have to buy one again? -- The good thing here is I can pay policy using my HSA account.
2. Finding a traditional LTC policy that I can keep, most likely if I am old/unhealthy I am gonna fly back to my home country where everything is much cheaper and healthcare is same/better than US, this probably not that cheap.
3. So far, I get to VUL policy from Nationwide where I pay around $120 for 10 years and it can be used international. So I will end up pay about $14,400 for the premium with death benefit $100,000 or LTC$ 100,000. This case, money will come back either death benefit or LTC. I know VUL is not a big favor here but I just have to include all the option I have. I also get another IUL from Omaha, haven't checked about international option yet but the plan pays only $45 a month which an option to get partial or full money back at year 10, 20, 21, 22, 23, 24, 25. The quotes asking me to pay for 52 years though (until age 85) which I have to come back and ask if I can do something similar like nationwide to pay for 10 years only or something.

But in general, which one is a better company? Mutual Omaha or Nationwide

Note: Single, Female, 33, Not really looking for LTC as I probably won't get married or have kids.
Thanks!
It is confusing overall because the rules are in flux, and the law has been evolving, etc.

1. as of right now, if you buy a policy, attest you have one, you will permanently opted out. The future is unknown about future rule/law changes.
2. even a small LTC policy with an inflation adjustor can make sense to keep
3. It isn't clear about the policies you are quoting, from the little bit you shared if they actually qualify under the law for LTC. The law has a definition of LTC, that it must actually test for "Activities of Daily living".. You can look up that part of the law or someone else here can link to it.. so the implication is life insurance with living benefit riders that aren't true LTC insurance do not qualify. Just want to make you aware of that wrinkle, that it needs to meet the states definition of LTC. (this is based on my memory of the definition, before i would buy anythign i would want confirmation whatever i buy meets the states definition).

comment about "Note: Single, Female, 33, Not really looking for LTC as I probably won't get married or have kids." if you plan to have any wealth, that you would want to go to anyone... then you need a plan for end of life care. Not saying you need LTC, but without it.. you have to pay your own care, until you run out of money, then go on medicaid. (this is the general over simplification). if you will have million and millions of dollars, the LTC isn't a big deal because your porfolio will support the care, if you have lots of pension/SS dollars if it would cover lots of LTC, then the drain on your other assets if you need 10+ years of memory care isn't a big deal. LTC is a big risk for those with modest amounts of wealth, and little lifetime guaranteed income.
tomsense76
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by tomsense76 »

Since it seems so many things are fuzzy here and at least personally I wasn't paying as close of attention as I should have, am wondering...

What happens if we miss the boat? IOW if we find ourselves paying into WA LTC for a year? Are we still able to opt-out say next year by buying our own policy? Would we be able to reclaim any of the money we paid in or would it be toast (guessing the latter)?
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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 »

tomsense76 wrote: Fri Jun 11, 2021 9:22 am Since it seems so many things are fuzzy here and at least personally I wasn't paying as close of attention as I should have, am wondering...

What happens if we miss the boat? IOW if we find ourselves paying into WA LTC for a year? Are we still able to opt-out say next year by buying our own policy? Would we be able to reclaim any of the money we paid in or would it be toast (guessing the latter)?
if you miss the initial opt out, there is no second chance.

... and if you move out of state, the money you paid is toast, or if you fail to meet any of the other criteria, your money is toast.
tomsense76
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by tomsense76 »

Soon2BXProgrammer wrote: Fri Jun 11, 2021 9:39 am
tomsense76 wrote: Fri Jun 11, 2021 9:22 am Since it seems so many things are fuzzy here and at least personally I wasn't paying as close of attention as I should have, am wondering...

What happens if we miss the boat? IOW if we find ourselves paying into WA LTC for a year? Are we still able to opt-out say next year by buying our own policy? Would we be able to reclaim any of the money we paid in or would it be toast (guessing the latter)?
if you miss the initial opt out, there is no second chance.

... and if you move out of state, the money you paid is toast, or if you fail to meet any of the other criteria, your money is toast.
Thanks for the info! :sharebeer

Wow that's unfortunate. I wonder what they are doing with new people who move to the state.

Yeah that makes sense and is what I thought.

My employer does offer LTC. Though IDK if I'll make the cutoffs based on the law (Nov is usually when open enrollment happens).

Honestly would have preferred to self-insure this or delay this until later in life (in early 30s).
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
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: Wed Jun 09, 2021 4:39 pm
RoyHobbs9 wrote: Wed Jun 09, 2021 4:25 pm
I'm leaning toward a hybrid IUL/LTC product due to price and if I don't use the LTC, at least my family gets it when I eventually croak. The Return of Premium Riders on the traditional LTC policies take them from pricy to too pricey for my taste.
Most IUL policies do NOT qualify as "long-term care insurance" under Washington state law.
Please share the details of the IUL/LTC particularly:
1) How the "LTC" rider works.
2) How long the policy is guaranteed to remain in-force.

Hybrids are sold as the best of all worlds with three different ways to benefit from the policy:
1) If you need cash, you can cancel the policy and get your cash.
2) If you need long-term care, you can use the death benefit to pay for your long-term care.
3) If you don’t need long-term care, then your heirs will get the tax-free death benefit.
OR
4) you and your heirs could get NOTHING from the policy.

Unfortunately, point #4 is a very real possibility and it is rarely discussed.
Even if you pay your premiums on-time, every year, and NEVER miss a payment, the policy could lapse.
Not every hybrid, but many hybrid policies can lapse.
If the policy lapses, you will lose every penny you put into the policy.
If the policy lapses you will get NOTHING from the policy:

No cash value.
No long-term care benefits.
No death benefit.

Most hybrid policies are NOT guaranteed to stay in-force for the rest of your life. They might lapse when you reach age 90 or 85 or 80 or maybe even sooner than that. The only way to know that the policy will remain in-force for life is if you look at the page of the illustration that shows “guaranteed values”. That page will show you the guaranteed death benefit every year of the policy. If the death benefit is zero before you reach age 100 that means you could lose everything you put into the policy and get NOTHING out of the policy. All your premiums would be wasted.
I did not realized that the policy will lapse for IUL/VUL/hybrid
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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 »

Rates are going up...or at least the minimum benefit is. LTCI companies know they have a captive audience.

I had 2 quotes on 24-May, one for $350/year, and one for about $300/year (a link to a website, not an in-hand quote).
The website has been updated...what was $300/year one is now $900/year...the benefit is also greater. On 24-May they had a ~$36k policy, now the minimum is $72k.

My company has still said nothing on the matter.
Whakamole
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Whakamole »

tomsense76 wrote: Fri Jun 11, 2021 12:38 pm Wow that's unfortunate. I wonder what they are doing with new people who move to the state.
They get to enjoy the second state income tax so far.

Maybe those who make a medium-high income can be grateful for the $36K in LTC with strings attached, when many are saving that much per year.
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 »

tomsense76 wrote: Fri Jun 11, 2021 12:38 pm Wow that's unfortunate. I wonder what they are doing with new people who move to the state.
This is by design... the opt-out placated enough people to get it passed now, but let's be real if they could have passed it without it they would have.
millenialinvestor
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by millenialinvestor »

I have a $50K policy with a monthly maximum benefit of $1500 without inflation protection. Per the current law, it classifies as a LTC that can be used to opt-out. However, I'm worried if the rules might change my current LTC plan would no longer meet the minimum requirements. Should I increases the monthly maximum benefit to $3000 and add in the inflation protection?
tomsense76
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by tomsense76 »

millenialinvestor wrote: Fri Jun 11, 2021 1:35 pm I have a $50K policy with a monthly maximum benefit of $1500 without inflation protection. Per the current law, it classifies as a LTC that can be used to opt-out. However, I'm worried if the rules might change my current LTC plan would no longer meet the minimum requirements. Should I increases the monthly maximum benefit to $3000 and add in the inflation protection?
I don't know the answer, but I think willthrill81 may have answered it here ( viewtopic.php?p=5993112#p5993112 ) and in the comment that follows
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
soulreapersteve
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by soulreapersteve »

Hello,

I'm many decades away from expecting to utilize any form of LTC. The field I'm going into (nursing) start out @ mid 5 figures annually with no incentive/extra pay calculated and at this current time, as per published current union wage tables, top out at low 6 figures after 30 years (again, not calculating incentive or other pay).

For example: I'll probably make around 65k-70k base my first year. Someone with 30 years of experience is making around 120k/year at this time. What are thoughts for someone in my situation regarding the decision to simply pay the payroll tax or opt out? I plan on keeping a private policy for 2-3 years then dropping it completely if I were to go the opting out route.

The reason I ask is because I read somewhere else that people who make 2-300k+/yr are the main populations who should be opting out of this. Anyone making lower wages shouldn't affect them too much.
leehamster
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by leehamster »

soulreapersteve wrote: Fri Jun 11, 2021 3:11 pm The reason I ask is because I read somewhere else that people who make 2-300k+/yr are the main populations who should be opting out of this. Anyone making lower wages shouldn't affect them too much.
I agree that higher income WA state people are more motivated to figure out how to opt out.

The law does affect everyone working in WA, in that it signs up nearly all of them for a lifetime of insurance premiums at rates higher than they would pay in the private market for a similar benefit, for insurance that they may or may not want.
definitelynotMike
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by definitelynotMike »

soulreapersteve wrote: Fri Jun 11, 2021 3:11 pm Hello,

I'm many decades away from expecting to utilize any form of LTC. The field I'm going into (nursing) start out @ mid 5 figures annually with no incentive/extra pay calculated and at this current time, as per published current union wage tables, top out at low 6 figures after 30 years (again, not calculating incentive or other pay).

For example: I'll probably make around 65k-70k base my first year. Someone with 30 years of experience is making around 120k/year at this time. What are thoughts for someone in my situation regarding the decision to simply pay the payroll tax or opt out? I plan on keeping a private policy for 2-3 years then dropping it completely if I were to go the opting out route.

The reason I ask is because I read somewhere else that people who make 2-300k+/yr are the main populations who should be opting out of this. Anyone making lower wages shouldn't affect them too much.
It ultimately comes down to the cost of a private plan, your current and future salary, and the amount of effort you're willing to put in for any savings and/or increased benefits of a private plan.

Here is a quick comparison of the annual cost of the tax and private plan premiums for <$100k salaries:

Image

If you plan to drop the private plan at some point after opting out of the tax then the longer-term savings calculation changes slightly.
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 »

Has anyone been able to get a quote for a 365 day multiplier / $36.5K benefit amount?

I received a quote a few months ago, but apparently the 365 day multiplier isn't available any longer after reaching back out. I'm only able to get a $50K / 500 day multiplier.

Wife and I are both less than age 30:
Quote in April: 365 day / $36.5K = $550 annual premium
Quote in June: 500 day / $50K = $650 annual premium

Also, the broker indicated because of the backlog of applications, approval can take as long as 12 weeks. The underwriting process also seems rather rigorous for someone in their 20s (45 minute nurse assessor call, medical record review).
Last edited by czaj on Fri Jun 11, 2021 4:58 pm, edited 1 time in total.
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 »

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.
What did this agent assume for: the elimination period? The inflation component?

Would you mind sharing what premium quote you received, and age/gender?
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 »

When obtaining quotes or policies for bare minimum coverage to be able to opt out of the state program, what are people choosing to get in terms of:

1. Elimination period: 0, 45, or 90 days, other?
2. Inflation component: none, 2%, 3%, other?
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 »

Kookaburra wrote: Fri Jun 11, 2021 5:00 pm When obtaining quotes or policies for bare minimum coverage to be able to opt out, what are people choosing to get in terms of:

1. Elimination period: 0, 45, or 90 days, other?
2. Inflation component: none, 2%, 3%, other?
Broker hasn't given me an option. I asked for the cheapest plan and was quoted 30 day elimination period with 2% compound.
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 »

Kookaburra wrote: Thu Jun 10, 2021 4:15 pm
WoW2012 wrote: Thu Jun 10, 2021 3:02 pm
StoopieHippo wrote: Thu Jun 10, 2021 2:58 pm I was told by my broker the other day that after tomorrow, no LTC companies will be issuing 0 inflation plans to anyone under the age of 40.

I think this is to eliminate all the youngsters (I'm one of 'em) who're just looking for a quick opt out.
Every company is different.
Some companies are not taking ANY applications from people in Washington under age 40.
Some companies still are.
Could you let me know which companies are still taking applications for WA residents under age 40?
I only got a quote for Mutual of Omaha
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by StoopieHippo »

Soon2BXProgrammer wrote: Thu Jun 10, 2021 3:16 pm
StoopieHippo wrote: Thu Jun 10, 2021 3:09 pm We're still pretty far from the optimal age (DH is 43 this year), but just in case is still ok with me.
I am confused why does everyone think that the optimal age is older?
I've always heard that the optimal age is ~50-55 years old. I think it's a balance between how much you'd pay over the course of your lifetime and likelihood of needing the insurance. At 36 years old, I'm not likely to need it for a very long time (barring anything catastrophic, maybe I'd pay for 25-30 years before evening reaping the benefits of the plan)... vs at 50+ yrs old, I might need it in 10yrs.
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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 »

StoopieHippo wrote: Fri Jun 11, 2021 5:44 pm
Soon2BXProgrammer wrote: Thu Jun 10, 2021 3:16 pm
StoopieHippo wrote: Thu Jun 10, 2021 3:09 pm We're still pretty far from the optimal age (DH is 43 this year), but just in case is still ok with me.
I am confused why does everyone think that the optimal age is older?
I've always heard that the optimal age is ~50-55 years old. I think it's a balance between how much you'd pay over the course of your lifetime and likelihood of needing the insurance. At 36 years old, I'm not likely to need it for a very long time (barring anything catastrophic, maybe I'd pay for 25-30 years before evening reaping the benefits of the plan)... vs at 50+ yrs old, I might need it in 10yrs.
if you calculate the net present value of all the payments (to get effectively a lump sum cost), i think it will be an eye opening experience... The payment if you start at 36 is lower then starting the payment at 50 or 55. it just is most 36 year olds don't have the money/cashflow to buy a policy on top of everything else.. house, kids, college, cars, vacations, etc. (the nominal amount of the payment should be lower, and inflation will erode the real cost of that payment for you, so that by the time your retired, the payment isn't as significant in real terms, but with a policy that has a 2% or 3% compound inflation adjustment, the real benefit continues to rise)

Joke (only partially): at 36 the insurance salesman wants to sell you a whole life policy... with the fat commission, so he says you can wait till 50 or 55 to buy LTC.. since hopefully nothing will be wrong with you and you can get a "reasonable rate" for a 50 or 55 year old.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by StoopieHippo »

Soon2BXProgrammer wrote: Fri Jun 11, 2021 5:48 pm
StoopieHippo wrote: Fri Jun 11, 2021 5:44 pm
Soon2BXProgrammer wrote: Thu Jun 10, 2021 3:16 pm
StoopieHippo wrote: Thu Jun 10, 2021 3:09 pm We're still pretty far from the optimal age (DH is 43 this year), but just in case is still ok with me.
I am confused why does everyone think that the optimal age is older?
I've always heard that the optimal age is ~50-55 years old. I think it's a balance between how much you'd pay over the course of your lifetime and likelihood of needing the insurance. At 36 years old, I'm not likely to need it for a very long time (barring anything catastrophic, maybe I'd pay for 25-30 years before evening reaping the benefits of the plan)... vs at 50+ yrs old, I might need it in 10yrs.
if you calculate the net present value of all the payments (to get effectively a lump sum cost), i think it will be an eye opening experience... The payment if you start at 36 is lower then starting the payment at 50 or 55. it just is most 36 year olds don't have the money/cashflow to buy a policy on top of everything else.. house, kids, college, cars, vacations, etc. (the nominal amount of the payment should be lower, and inflation will erode the real cost of that payment for you, so that by the time your retired, the payment isn't as significant in real terms, but with a policy that has a 2% or 3% compound inflation adjustment, the real benefit continues to rise)

Joke (only partially): at 36 the insurance salesman wants to sell you a whole life policy... with the fat commission, so he says you can wait till 50 or 55 to buy LTC.. since hopefully nothing will be wrong with you and you can get a "reasonable rate" for a 50 or 55 year old.
Well good, cuz that's what I got lumped into with my husband's plan (3% compound inflation). ;) Yay me!
tomsense76
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by tomsense76 »

Do we need to hang onto a private LTC plan forever or do we only need it for a specific amount of time?

If the former, does anyone know how a private LTC plan increases insurance premiums from year-to-year? Wondering if there is a breakeven point where staying with the public option becomes worth it after all?

Must admit as someone in my early 30s I'm really not thrilled about either option. Feels like I'm throwing money away :(
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
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 »

tomsense76 wrote: Fri Jun 11, 2021 5:57 pm Do we need to hang onto a private LTC plan forever or do we only need it for a specific amount of time?

If the former, does anyone know how a private LTC plan increases insurance premiums from year-to-year? Wondering if there is a breakeven point where staying with the public option becomes worth it after all?

Must admit as someone in my early 30s I'm really not thrilled about either option. Feels like I'm throwing money away :(
I think that's the big question. The law is still in flux, but the current iteration says that once you opt out, you're done forever...so theoretically you could cancel after 1-2 years and be opted out still.
soulreapersteve
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by soulreapersteve »

definitelynotMike wrote: Fri Jun 11, 2021 4:38 pm
soulreapersteve wrote: Fri Jun 11, 2021 3:11 pm Hello,

I'm many decades away from expecting to utilize any form of LTC. The field I'm going into (nursing) start out @ mid 5 figures annually with no incentive/extra pay calculated and at this current time, as per published current union wage tables, top out at low 6 figures after 30 years (again, not calculating incentive or other pay).

For example: I'll probably make around 65k-70k base my first year. Someone with 30 years of experience is making around 120k/year at this time. What are thoughts for someone in my situation regarding the decision to simply pay the payroll tax or opt out? I plan on keeping a private policy for 2-3 years then dropping it completely if I were to go the opting out route.

The reason I ask is because I read somewhere else that people who make 2-300k+/yr are the main populations who should be opting out of this. Anyone making lower wages shouldn't affect them too much.
It ultimately comes down to the cost of a private plan, your current and future salary, and the amount of effort you're willing to put in for any savings and/or increased benefits of a private plan.

Here is a quick comparison of the annual cost of the tax and private plan premiums for <$100k salaries:

Image

If you plan to drop the private plan at some point after opting out of the tax then the longer-term savings calculation changes slightly.
Thank you for your response as this is exactly what I'm looking for. I was quoted for 650/year with a private plan.
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 »

There is also possible additional value for purchasing a private LTC policy for those who have (or plan to have) large HSA balances.

LTC insurance premium is an eligible HSA expense, so if you are fortunate enough to be healthy and not have much in medical expenses throughout your life, you can at least withdraw these qualified LTC premiums tax-free from your HSA.
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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 »

Has anybody found a plan that can still be established for people under 40?

Mutual of Omaha now requires you to be at least 40.
tomsense76
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by tomsense76 »

soulreapersteve wrote: Fri Jun 11, 2021 6:04 pm
definitelynotMike wrote: Fri Jun 11, 2021 4:38 pm
soulreapersteve wrote: Fri Jun 11, 2021 3:11 pm Hello,

I'm many decades away from expecting to utilize any form of LTC. The field I'm going into (nursing) start out @ mid 5 figures annually with no incentive/extra pay calculated and at this current time, as per published current union wage tables, top out at low 6 figures after 30 years (again, not calculating incentive or other pay).

For example: I'll probably make around 65k-70k base my first year. Someone with 30 years of experience is making around 120k/year at this time. What are thoughts for someone in my situation regarding the decision to simply pay the payroll tax or opt out? I plan on keeping a private policy for 2-3 years then dropping it completely if I were to go the opting out route.

The reason I ask is because I read somewhere else that people who make 2-300k+/yr are the main populations who should be opting out of this. Anyone making lower wages shouldn't affect them too much.
It ultimately comes down to the cost of a private plan, your current and future salary, and the amount of effort you're willing to put in for any savings and/or increased benefits of a private plan.

Here is a quick comparison of the annual cost of the tax and private plan premiums for <$100k salaries:

Image

If you plan to drop the private plan at some point after opting out of the tax then the longer-term savings calculation changes slightly.
Thank you for your response as this is exactly what I'm looking for. I was quoted for 650/year with a private plan.
Do you know what life time benefit that came with?

I could be wrong (definitely not an expert), but that sounds like that is on the higher side. Might be worth doing a bit more shopping.
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
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