WA paychecks will take a hit this summer. Long-term care tax is about to get real | Opinion

Washington state citizens will start seeing less take-home pay starting this July and there’s not much they can do about it — at least for the moment.

A united, public outcry might have some effect, but likely not until next year when lawmakers convene again. Then, maybe, they will consider making changes that should have been made this year.

Despite knowing the WA Cares long-term care program still has problems, the Legislature and Gov. Jay Inslee are allowing it to get rolling this summer.

The mandatory insurance plan was approved in 2019 but its implementation was delayed until now.

Now it’s real.

We imagine that once people see the hit to their paychecks this summer, the majority won’t be happy.

This will be especially true when most realize they can’t opt out and it’s a tax for services they may never need or be able to use.

Beginning July 1, the state will take 58 cents on every $100 a worker earns in order to cover future long-term care costs. For someone who earns $50,000 annually, that amount adds up to $290 a year.

If you want a quick way to figure out your own payroll deduction, go to the WA Cares Fund website and use the calculator tool. It also explains in detail how the program is supposed to work and who is exempt from paying into the fund.

Currently, federal employees who work in Washington state are exempt and so are employees of tribal businesses — unless the tribe has chosen to opt into the program.

There also are exemptions for military families, disabled veterans who are getting care through the Department of Veterans Affairs and people who are working in Washington state but have a home address elsewhere.

In addition, people who are self-employed don’t have to pay into the program, but there is a way for them to opt in if they choose.

Two years ago, the state allowed people to forego using the state program if they bought their own private long-term care insurance by Nov. 21, 2021. Insurance companies were flooded with requests during the exemption window and many citizens weren’t able to buy plans in time.

This kind of opt-out provision is no longer available.

So what will people get for their money?

Workers required to pay into the system will be vested after 10 years and potentially eligible to receive a lifetime benefit of $36,500 toward in-home nursing care needs.

The idea behind the forced long-term care insurance program is that too many people haven’t planned for the possibility of needing expensive nursing care. Creating this fund is supposed to help provide a way for people to pay for in-home care so they don’t have to go into a nursing home.

Like many new government programs, the intent is admirable. It’s the details and the implementation that’s causing concerns.

For all the talk about Washington state’s unfair regressive sales tax, this also is a regressive tax.

Think about it. Every worker is supposed to pay into the program, but people living paycheck to paycheck can least afford to take the deductions. And it may very well be that their contributions help buoy a system that provides benefits to others but not to them.

There also is concern that payroll taxes often need to increase over time to keep a program viable, so who knows for certain if the long-term care tax rate will have to go up.

As it stands now, the plan won’t follow WA state citizens if they leave the state. It also can’t be transferred from one spouse to another when one passes away.

These tweaks were introduced this past session, but they unfortunately went nowhere.

For now, payroll deductions are coming for millions of workers in Washington state for a program that still needs work.

Public pressure is the way to make sure lawmakers get it done next year.