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Washington State Long Term Care Employee Tax: What Are My Options?

By June 1, 2021June 2nd, 2021Employee Benefits, Insurance
WA State Long Term Care Employee Tax

Washington State has created the WA Cares fund that is paid 100% by the worker.  This employee paid payroll tax is 0.58% of every dollar you earn with no cap on income. 

Can a Washington State worker opt out of the payroll tax? Yes, if the worker has an individual Long Term Care insurance policy in-force they can opt out of the payroll tax. 

Is there a deadline to purchase a Long Term Care insurance policy to be able to opt out of the tax?  A policy must be purchased prior to November 1, 2021.

How can an individual obtain their own Long Term Care insurance policy?  There are a number of options, including Long Term Care policies and also Life insurance coverage with Long Term Care as an added benefit rider. These can be purchased out on the open market, or your employer can offer a group-based product that would qualify for the opt-out from the tax.

Ask your employer about a Company Group-based choice?  Life insurance with a Long-Term Care benefit rider is not only the quickest policy to implement, it is also much more attractive than typical Long Term Care policies since it adds a number of benefits including life insurance that is not provided by the state plan.

Advantages of group-based Life insurance with a Long-Term Care benefit rider?

  • Includes both Life and Long-Term Care coverage
  • Provides the needed exemption from the payroll tax.
  • Long Term Care benefits richer than State program
  • Portable to other states (unlike State program)
  • Employees can keep the policy even if they change jobs or employers
  • Minimal health underwriting (either no, 2, or 4 questions)
  • Turn-key enrollment.
  • Easy administration

Employer: What information is needed for a comparison of the WA LTC Tax and the Life/LTC premiums?

Your company’s name, type of industry, and a census of employees to include:

  • Name
  • Date of birth
  • Gender
  • Annual salary (including base and an estimation of commission, bonus, and overtime)

For more information, please contact our office at 360-452-2314 or email

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