Inslee signs bills to delay WA Cares tax

Washington’s highly touted and highly contentious long-term care program will be delayed by at least 18 months while lawmakers work amend the program.

Gov. Jay Inslee signed bills last week to delay the WA Cares payroll tax on Washington workers just days after the Senate voted 46-3 in favor of delaying the collection of premiums and WA Cares Fund’s implementation. The House of Representatives voted 91-6 in favor of the same bill.

Inslee’s action pauses the collection of premiums. The collection is scheduled to begin July 1, 2023, instead of Jan. 1.

The tax would have taken 58 cents for every $100 made by Washington workers. A person with an annual income of $70,000 would have $406 deducted yearly.

Since the collection of premiums was meant to go into effect at the beginning of January, HB 1732 also requires employers to refund employees any premiums deducted before July 1, 2023.

The WA Cares Fund would provide Washingtonians, who meet the eligibility criteria, with services such as home-delivered meals, care transition coordination, memory care and wheelchair ramps. Each person will have coverage up to $36,500 over their lifetime.

The floor debate on HB 1732 had support from Democrats and Republicans.

“It allows for that 18-month delay so that we can address a few of the issues that we’ve heard about to ensure that the program is as effective and efficient as we can make it,” said Rep. Pat Sullivan, D-Covington.

Rep. Joe Schmick, R-Colfax, said he was in favor of passing HB 1732 to fix the challenges that it presents. One of those problems was the number of people who opted out of the program last year. 

According to the Employment Security Department, as of Dec. 2, more than 430,000 people have opted out of participating in the WA Cares Fund, meaning they will not receive benefits from it, nor will they be contributing to it.

Rep. Drew Stokesbary, R-Auburn, said the plan, as it stands, is unsustainable. He said, according to the state actuary, “This plan is expected to run out of money by year 2075,” and that is based on an assumption of 105,000 people opting out. As of now, Stokesbary said more than 450,000 individuals have opted out of the program.

Stokesbary voted in favor of HB 1782 but said he wished there was a way to permanently delay the program and explore alternatives.

Eight amendments were introduced to HB 1732 before voting took place in the House of Representatives. None were adopted. Inslee announced last month he favored delaying implementation of the program and its tax to give lawmakers the opportunity to make refinements.

“I have been in ongoing discussions with legislators about the long-term care bill, which is set to begin collecting funds in January. This bill will help provide much-needed care and coverage for Washingtonians as they age. However, legislators have identified some areas that need adjustments and I agree,” said Inslee. “We need to give legislators the opportunity to make refinements to the bill. Therefore, I am taking measures within my authority and ordering the state Employment Security Department not to collect the premiums from this program from employers before they come due in April.”

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