Opinion: Long-term-care payroll tax — the state saw more than 110,000 exemption requests, as of Sunday

Elizabeth Hovde of the Washington Policy Center provides an update on those seeking an exemption from Washington’s new long-term-care payroll tax.

Elizabeth Hovde of the Washington Policy Center provides an update on those seeking an exemption from Washington’s new long-term-care payroll tax

Elizabeth Hovde
Washington Policy Center

On the first day Washington workers could apply to opt out of a coming payroll tax — if they had a private long-term-care insurance plan (making the term “opt out” somewhat misleading) — the site set up for exemption applications crashed within the first hour. That gave many people little hope that the Employment Security Department (ESD) could handle this part of the Legislature’s flawed law mandating a long-term-care program some people don’t want, others won’t need and many won’t qualify for.

Elizabeth Hovde
Elizabeth Hovde

But after the first few days of technological woe for people seeking exemption from a bad deal, the department seems to have things under control. 

That’s according to both an ESD spokesman and people still applying for exemption. Several people I know who applied actually already received approval letters from the state. They can show it to their employers so they aren’t stuck paying a 58-cent-per-$100 tax on their wages starting in January.

Nick Demerice, ESD’s director of public affairs,  says his team is getting through the applications according to plan and is not overwhelmed, even though it had more than 110,000 applications by the end of the day Oct. 10.  (There were 95,000 exemption requests the first week of the opt-out window written into the law. That window runs from Oct. 1, 2021, until Dec. 31, 2022. You need to have a private insurance plan for long-term care before Nov.1 to request an exemption.)

“Our fiscal note analysis predicted approximately 300,000 total exemption requests,” Demerice said. That number seems smart and far more likely than the number of opt-outs estimated when figuring the solvency of the long-term-care fund that this payroll tax was created to feed. 

Sen. Curtis King, R-Yakima, said in a recent meeting of the Long-Term Services and Support Trust Commission that actuarial studies estimated only 105,000 opt outs. We’re already over that at 110,000. This is yet another reason lawmakers would be wise to repeal the law. 

I’m anxious to see what the end number will do to a fund that is already in financial trouble. Hopefully, it won’t make the long-term-care tax rise or the insufficient lifetime benefit attached to the tax fall even sooner than anticipated. 

“How many we ultimately receive will be something we are all anxiously awaiting,” Demerice says.  

Read more about this regressive tax and the misguided law that created it here, and find out how to apply for an exemption here.

Elizabeth Hovde is the director of the Center for Health Care and Center for Worker Rights at the Washington Policy Center. She is a resident of Clark County.

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