Time Sensitive: New Long-Term Care Insurance & Tax 10/15/21

Dear Faculty, Staff, and Student Staff members, 

As previously communicated and reported in the news, the Washington State Legislature established a long-term care insurance benefit for eligible individuals in an effort to make long-term care more affordable. Starting January 1, 2022, Washington employers are required to collect premiums from employees in the form of a payroll tax deducted from paychecks, which will fund the Washington State Long Term Care Trust (WA Cares Fund) that ultimately pays benefits, up to a total of $36,500, to eligible Washingtonians. The tax is $0.58 per $100 of earnings and applies to all faculty and staff, including student staff.

We want to remind you of a limited one-time option to apply for an exemption to opt out if you already have private long-term care insurance, equal to or better than the state plan. If you are interested in purchasing an individual long-term care policy, the state requires that it be in place by November 1, 2021, in order to qualify for exemption.

How do I apply for an exemption to opt out?
You must have purchased a qualifying private long-term care insurance plan before November 1, 2021.

• Once you have purchased a plan, you must submit an exemption application directly to the Employment Security Department (ESD). The online exemption application is located here. Exemption applications will be accepted through December 31, 2022. Please note that Human Resources does not make a determination on whether a plan qualifies for the exemption and therefore all exemption requests and applications must go through the Employment Security Department. 

Once an application is submitted, ESD will review the application and if approved, provide you with an exemption approval letter. ESD will not notify employers.

What happens if my exemption request is approved?

• You will no longer be eligible for the program and will not have an option to re-enroll.
• The state will permanently disqualify you from accessing WA Cares benefits.

How do I notify Human Resources that I have an approved exemption?
You will be required to present a copy of your exemption approval letter to Human Resources. Puget Sound is required to withhold non-refundable WA Cares premiums if you do not provide your exemption approval letter.

• To submit your exemption approval letter, please submit a copy or photo of your approval letter to Human Resources using the Exemption Approval Letter Submission Form or drop it off directly in Human Resources.
• Exemptions will take effect the quarter after your application is approved. Please note that for payroll to remove you from the payroll tax, we must receive the exemption approval letter prior to the effective date of your exemption. For example, if your exemption approval letter is dated January 5 payroll will stop withholding the payroll tax on April 1 (your exemption approval date). We must have the approval letter prior to April 1 as we cannot refund any taxes collected.  

 
What if I do not qualify for an exemption?
There is nothing you need to do. Payroll deductions will start automatically the first payroll of January 2022. More information on the program is available here.

Should you have any questions, please contact Human Resources at hr@pugetsound.edu.              

Sincerely,

Erin Ruff and your Human Resources colleagues
Erin Ruff, SHRM-CP | Director of Human Resources / Interim Associate Vice President for Human Resources