Washington State Adopts Employee-Paid Long-Term Care Insurance

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Last month, both chambers of the Washington state legislature passed a bill that would create the nation’s first state program to provide employees with long-term care benefits. Employees would pay a 0.58 percentage of wage premium in return for a maximum of $36,500 in long-term care benefits, with that amount indexed for inflation. Employers would be required to collect the premiums but would not have any direct financial obligation associated with the program.

In order to claim benefits, employees must work a minimum of 500 hours per year for three of the six years prior to requesting benefits, or 10 years total with at least five years of uninterrupted work. Employees with private long-term care insurance coverage are exempt from the program. The benefits would supplement those provided under Medicare, which generally does not pay for many forms of long-term care.

A number of other states are considering measures to provide long-term care. Some of these proposals involve public support for long-term care coverage, while others seek to follow a private funding strategy such as that in the Washington bill. Given a rapidly aging population, lack of such insurance coverage may become a significant issue for many retirees.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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