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February 2022: Washington Delays Implementation of Long-Term Care Legislation

15 Feb


Update Applicable to:
All employers in the state of Washington

What happened?
On January 27, 2022, Governor Jay Inslee signed House Bills 1732 (HB 1732) and 1733 (HB 1733), which delay implementation and propose several reforms to the Washington Cares Act.

What are the details?
The new bills came after legislative leaders announced an intention to delay premium collections for the Washington Cares Fund in December 2021 and to clarify employer obligations under the Act. The delay will allow legislators more time to address the concerns that led to recent court challenges and a citizens’ initiative with the goal of improving the program.

HB 1732 delays implementation of the Washington Cares Act, including employers’ obligation to deduct premiums from employee pay, until July 1, 2023. The Act requires Washington employers to collect a 0.58 percent payroll tax from all employees, and collections were previously set to begin on January 1, 2022.

Under the new law, any premiums already collected from Washington employees in 2022 are to be refunded within 120 days of being collected.

Under HB 1733, the Employment Security Department will begin accepting and approving applications for voluntary exemptions on January 1, 2023. These exemptions exceed those available under the Act as originally enacted and will allow individuals who already have coverage or who are not likely to receive benefits to permanently opt-out. Importantly, military spouses, employees with nonimmigrant visas, and employees who reside in another state but work in the state of Washington may request an exemption from the premium deductions.

Ogletree Deakins suggests that “[d]ue to the implementation delay, employers currently are not required to collect premiums for the Washington Cares Fund from their Washington employees. For employers that started collecting the payroll tax premiums from their Washington employees on January 1, 2022, HB 1732 requires those employers to refund any collected premiums to the employees.”

The Washington Employment Security Department published instructions for employers. Instructions can be found here.

For more information, please see the links below:

Washington Cares Fund Act (House Bill 1323)

House Bill 1732

House Bill 1733

Governor Inslee’s Long-Term Care Delay Announcement (12/17/2021)

WA Employment Security Department Instructions

Article 1Article 2

What do employers need to do?
Employers should review the links provided above and should not collect any more premiums for the Washington Cares Fund. It is advised by multiple law firms to begin refunding any collected premiums to the employees within 120 days of the date premiums were collected.

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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