Washington State amends WA Cares Fund: Key changes effective from January

Erin A. Webber President and Managing Director Littler Mendelson P.c.
Erin A. Webber President and Managing Director - Littler Mendelson P.c.
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Washington State has enacted amendments to the WA Cares Fund, a publicly funded long-term care insurance program. The changes come through Senate Bill 5291, signed into law on May 20, 2025, and will largely take effect on January 1, 2026.

The WA Cares Fund was initially established under the Long-Term Services and Supports Trust Act in April 2021. It is financed by a payroll deduction of 0.58%, with premium collection starting in July 2023. Benefits are set to be available from July 2026 for those who qualify.

Senate Bill 5291 introduces several significant changes. Workers moving out of Washington can maintain their coverage if they have contributed for at least three years. Those who previously opted out due to private insurance can rejoin the program until July 1, 2028.

A new framework allows private insurers to offer supplemental long-term care policies that complement WA Cares benefits. Qualification requirements have been simplified by removing the need for five consecutive years of contributions within a ten-year period.

Additional provisions include reimbursement for ineligible tax payments, exemptions for active-duty military and temporary visa holders, annual inflation adjustments, a pilot program to test benefit delivery systems, and employer recordkeeping and reporting requirements.

Starting July 1, 2026, employees or self-employed individuals relocating outside Washington may choose to continue participation under certain conditions. They can access benefits outside Washington beginning in July 2030 but cannot withdraw once they elect continued participation.

For those with private plan exemptions wishing to join WA Cares again, there is an opportunity until July 1, 2028. The Employment Security Department (ESD) will provide information on this option starting January 1, 2026.

SB 5291 also authorizes supplemental private long-term care insurance plans that must meet specific standards such as providing at least twelve months of coverage after WA Cares benefits are exhausted and offering flexible premium options.

The bill simplifies contribution requirements for qualifying workers. Previously requiring ten years without a break of five consecutive years is now adjusted so that workers contributing for at least ten years qualify without restarting if they leave the workforce temporarily.

Exemptions are provided for active-duty service members starting January 1, 2026; these exemptions end within ninety days post-military discharge or separation. Temporary worker nonimmigrant visa holders are automatically exempt unless opting in upon gaining permanent residency or citizenship.

Benefits will be adjusted annually based on inflation using Seattle’s consumer price index data for urban wage earners and clerical workers. A pilot program aims to test benefit delivery systems before full implementation in July 2026.

Employers must adhere to new recordkeeping and reporting requirements including retaining records for six years and facing penalties for failing compliance measures such as report submissions or premium remittance delays.

In light of SB 5291’s enactment, employers should review payroll systems for compliance with new rules while identifying eligible employees for exemptions or opt-in opportunities alongside considering supplemental insurance offerings as part of employee benefits packages.



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