Gov Inslee Delays Long Term Care Tax

Gov Inslee Delays Long Term Care Tax

*Updated December 22, 2021

Washington State Senate Republican Leader, John Braun, and House Republican Leader, J.T. Wilcox released the following statement today in response to Jay Inslee’s delay of LTC tax announcement last week:

“The governor’s announcement last week that the ‘Washington Cares’ long-term care tax would be delayed led everyone to believe that the tax would not be collected from their paychecks come January. State employees received notice that only those who have already been granted an exemption to the program will not have the tax deducted. Otherwise, the tax will be collected as originally planned. How is this a delay? How has the governor helped matters? He hasn’t. The governor’s announcement changed nothing. The only thing it did was publicly acknowledge that the program is a mess.

“We need to go into a special session before the state begins collecting the tax and repeal this bill – even if it’s over the holidays, using virtual technology to meet on short notice. The program is so unpopular that more than 400,000 Washingtonians applied for an exemption and thousands of others want out but couldn’t get a private policy before the deadline. Why? Because the way the law is written drove insurance carriers to pull out of Washington.

“Under the current law, it is legally questionable if anyone who has the money deducted from their paycheck won’t receive it back – not even if they are granted an exemption. People are angry. The governor stands to make them even angrier if he fails to have the legislative branch address this before January 1.”

After hundreds of thousands of Washington residents scrambled to obtain private long term care insurance by the November 1 deadline, Governor Jay Inslee announced today that he would be delaying the collection of the LTC tax until the legislature can “sort through the issues.”

Washington employees were told they could apply for an exemption to opt-out of the LTC tax if they could obtain private insurance by the November deadline. “There are 12 companies [in the state] that can sell long-term care stand-alone policies, and 22 can sell riders, and we’re finding that none of the companies are writing new business right now,” said Kara Klotz, communications manager for the state Office of the Insurance Commissioner. Not many options available for folks to opt out.

The new tax was set to take effect January 1, 2022. In a press conference today, Governor Jay Inslee, along with Speaker Jinkins and Leader Billig, announced that the collection of this tax would be delayed.

“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. 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. My actions mean that the state will not collect those funds until the Legislature sorts through these issues. While legislation is under consideration to pause the withholding of LTC fees, employers will not be subject to penalties and interest for not withholding fees from employees’ wages during this transition.”

– Gov. Jay Inslee

“In addition to delaying the premium assessment, we also support employers pausing premium collections from employees in Washington so lawmakers can take necessary action. While we cannot direct employers not to collect, we strongly encourage them to pause on collecting premiums from employees, giving us time to pass legislation extending implementation dates until next year. We know that this extra time will allow us to find solutions and craft updates to the Fund that allows Washingtonians to age with dignity in their own homes.”

– Sen. Andy Billig and Speaker Laurie Jinkins. 

As Representative Jim Walsh stated on Facebook:

This is a win. Though the mechanics of it are constitutionally dubious and wouldn’t hold up to reasonable court scrutiny. Anyway, it wouldn’t have happened without the pressure created by I-1436.But we still have to keep gathering signatures for 1436. It will hold the Gov and the Speaker to their words.

Representative Jenny Graham from Washington’s 6th District in Spokane said on Facebook today:

“The Long Term Health Care paycheck deductions are postponed until April. We will try to repeal the legislation all together. It isn’t fair or sustainable as Republicans said from the beginning. Another option would be for the majority party to make the program opt in instead of opt out. If you received an exemption because you procured your own long term health care, you will have to decide what you do next. I suggest waiting until the majority party decides if they are going to follow through with the deeply unpopular policy.

Please continue to sign those petitions – have your family and friends and coworkers sign them. Saying no to another tax is something people of every political persuasion can get behind.