What to Know About Washington State’s Publicly Funded Long-Term Care Insurance

Washington State is the first state in the nation to create a publicly funded insurance program providing residents with a basic level of long-term care benefits. 

Participation is mandated unless an employee opts out, which must happen before November 1, 2021.

An overview of the program and its potential impact on individuals and businesses follows.

Long-Term Services and Supports (LTSS) Program Details

There were many motivating factors when Governor Jay Inslee signed the Washington Long-Term Services and Supports (LTSS) Trust Act and established the LTSS Trust Program and Commission in May 2019, including:

  • Private long-term care insurance is expensive and isn’t covered by Medicare or other health insurance plans.
  • The majority of individuals over 65 years old require long-term care services, and viability for family caregivers is decreasing.
  • The program provides relief to Medicaid.

How Is the LTSS Program Funded?

The program will be fully funded by Washington workers through a payroll deduction starting in January 2022. 

Beginning January 1, 2022, a 0.58% mandatory payroll premium will be assessed against all W-2 wages uncapped. Rates can change and will be assessed biannually.


How Can Individuals Qualify for LTSS Benefits?

Revised Code of Washington (RCW) 48.83.020 defines long-term care for the state of Washington and includes the following:

  • Long-term care riders on life insurance and annuities
  • Qualified long-term care contracts
  • Long-term care riders or policies purchased under group coverage

Washington residents will be considered vested if they’ve:

  • Paid premium for at least 10 years without a break of five consecutive years or for three of the last six years
  • Worked at least 500 hours per year in each of the qualifying years

Individuals qualify to receive benefits if they’re unable to perform three of 10 Activities of Daily Living (ADLs) without assistance.


Benefits will be available beginning January 1, 2025. Benefits aren’t portable; individuals who leave Washington forfeit their benefits.

How Are Benefits Determined for LTSS Participants?

Participants receive benefits as reimbursements of approved services rendered.

Each vested participant is allotted 365 benefit units. Each unit is worth $100, and participants can use one benefit unit per day. The resulting total benefit pool available is $36,500.


Private long-term care insurance is expensive and isn’t covered by Medicare or other health insurance plans.

Benefits can increase or decrease annually by vote of the LTSS Trust Commission.

Impact for Individuals

Other than a cost savings, personal long-term care insurance can provide the following benefits:

  • Guaranteed premiums
  • Guaranteed long-term care benefits
  • Inflation protection
  • Death benefit
  • Return of premium or cash value upon surrender
  • Customized benefits

How Do Residents Opt Out of the LTSS Program?

Residents who purchase personal long-term care insurance prior to November 1, 2021, can apply for an exemption from the program and payroll deduction.


Individuals with more than 10 years until retirement and income above $200,000 may benefit from buying personal insurance and opting out of the program.

Applications for an exemption will be accepted from October 1, 2021, to December 31, 2022.

Impact on Individuals

Individuals with more than 10 years until retirement and income above $200,000 may benefit from buying personal insurance and opting out of the program.

Guidance to Make Your Decision

The grid below shows the estimated cumulative payroll deduction to age 65 for various age bands and income amounts. Use this grid to help determine if you’ll benefit from opting out of the state program.

The grid assumes the following information:

  • 65 is the retirement age
  • 2% annual income growth
  • 0.58% deduction in all years
  • $36,500 in the current Washington LTSS Trust total long-term care benefit pool
est cumulative payroll deduction to retirement chart

What Should Employers Know About the LTTS Program?

Employers with employees located in Washington State should track developments regarding the state’s new program and make applicable payroll tax deductions starting January 1, 2022.

In advance, employers should consider informing employees of the new law, including:

  • Its effect on their paycheck
  • The brief period to purchase long-term care insurance before November 1, 2021
  • The exemption window between October 1, 2021, and December 31, 2022

Employers may also want to provide long-term care insurance to employees; however, employers that choose this option must provide a plan equal to or better than the state plan.

We’re Here to Help

To learn more about the new LTSS program and how it could impact your personal finances, retirement plan, or business, contact your Moss Adams professional.

Contact Us with Questions


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