WA Cares Fund (WA money grab) (insurance, how much, unemployed)

[Hemlock140]

I suppose to most it seems good that the state is providing a long term care program for it's residents, but they way it's being done is very questionable. If you actually read the fine print or attend a presentation as I did today, you will find that:

You can opt out only if you prove having an equivalent plan already by 11/1/2021 (I do)
Even if you do, the state must approve your opt-out by 12/30/2021 or you will be charged out of your pay check 1/1/2021 until 4/1/2021, even if you had the equivalent plan in November/December.

When your opt-out is approved they will not refund what you have paid

If you are 8-9 years to retiring, you will pay those years but will not get the full benefit since it takes 10 years to be fully vested.

If you move to another state before needing the benefit you will lose it, but your money is gone, it will not be refunded.

The lifetime maximum benefit is $36,500, which is less than today's cost for just one year of assisted living.

The cost to the employee taken out of their paycheck is .58% of every $100 of W2 earnings - regardless of your age, so if you get a raise, promotion or better job, your deduction goes up. In your 20s now? Your cost will go up every time you get a raise over you next 40+ years.

Private policies like mine are fixed premium over your lifetime.

The link below is to the site, but you may find it slow as many others are now finding out about this from their employers.

http://www.wacaresfund.wa.gov/

[Botev1912]

Originally Posted by Hemlock140

I suppose to most it seems good that the state is providing a long term care program for it's residents, but they way it's being done is very questionable. If you actually read the fine print or attend a presentation as I did today, you will find that:

You can opt out only if you prove having an equivalent plan already by 11/1/2021 (I do)
Even if you do, the state must approve your opt-out by 12/30/2021 or you will be charged out of your pay check 1/1/2021 until 4/1/2021, even if you had the equivalent plan in November/December.

When your opt-out is approved they will not refund what you have paid

If you are 8-9 years to retiring, you will pay those years but will not get the full benefit since it takes 10 years to be fully vested.

If you move to another state before needing the benefit you will lose it, but your money is gone, it will not be refunded.

The lifetime maximum benefit is $36,500, which is less than today's cost for just one year of assisted living.

The cost to the employee taken out of their paycheck is .58% of every $100 of W2 earnings - regardless of your age, so if you get a raise, promotion or better job, your deduction goes up. In your 20s now? Your cost will go up every time you get a raise over you next 40+ years.

Private policies like mine are fixed premium over your lifetime.

The link below is to the site, but you may find it slow as many others are now finding out about this from their employers.

http://www.wacaresfund.wa.gov/

What happens if you are unemployed today and start a job on Jan 1 for example? Or if you change jobs between that time?

[Hemlock140]

Originally Posted by Botev1912

What happens if you are unemployed today and start a job on Jan 1 for example? Or if you change jobs between that time?

As I understand it from the presentation yesterday:

Changing jobs - You will continue in the same program but it comes out of your new employer's check.
If you start a job on January 1 they will take the money out of your check unless you give them a copy of your approved opt-out before you start.

Changing jobs - You will continue in the same program but it comes out of your new employer's check.

[flyingsaucermom]

How likely is this to be challenged in court? It is just so ridiculous.

[PS90]

Totally agree.

1) The $36,500 maximum is the maximum, no matter how much money you make (you pay more if you make more), and no matter how many years you contribute. After you reach your maximum benefit, you have to continue to contribute, so you're literally throwing money away after that.

2) The flyer from the WA Dept of Health that is promoting this fiasco actually mentions that "7 in 10 Washingtonians will need long-term care in their lifetime". So, right away 3 in 10 of us will have completely thrown the money away.

3) If you contribute to the full maximum benefits, but then move out of state, you've thrown that money away unless you move back to WA for long-term care.

4) According to my financial guy, there are currently no public insurance companies underwriting any new long-term care policies, because those companies are afraid of people signing-up to get the exemption and then dropping the insurance policy. So, basically, if you don't have a private long-term care policy by now, you're stuck paying for this.

How is this legal?

[Pomelo]

Originally Posted by PS90

How is this legal?

No clue, it is clearly a marginal income tax for W-2 income labeled something other than marginal income tax. I would not refer to WA as a no income tax state anymore, as the vast majority of people will pay 1% income tax.

[Hemlock140]

Originally Posted by PS90

Totally agree.

1) The $36,500 maximum is the maximum, no matter how much money you make (you pay more if you make more), and no matter how many years you contribute. After you reach your maximum benefit, you have to continue to contribute, so you're literally throwing money away after that.

2) The flyer from the WA Dept of Health that is promoting this fiasco actually mentions that "7 in 10 Washingtonians will need long-term care in their lifetime". So, right away 3 in 10 of us will have completely thrown the money away.

3) If you contribute to the full maximum benefits, but then move out of state, you've thrown that money away unless you move back to WA for long-term care.

4) According to my financial guy, there are currently no public insurance companies underwriting any new long-term care policies, because those companies are afraid of people signing-up to get the exemption and then dropping the insurance policy. So, basically, if you don't have a private long-term care policy by now, you're stuck paying for this.

How is this legal?

That one sentence would be rare, because most people going on LTC would not then be working again. It is possible, though.

[Hemlock140]

Originally Posted by flyingsaucermom

How likely is this to be challenged in court? It is just so ridiculous.

The problem is the lack of publicity, this got passed quietly and many people are still not even aware of it. I suppose when the $100k salary people start getting dinged for $580/year they may take notice, or when the $250k income people see their deduction adding up to $1,450/year.

[leastprime]

See the other thread on the WA Cares.

JMO,
The WA plan is priced to encourage people to search out a plan and then lock them into whatever plan they can get even if not the State's plan.

It is insurance but most will never be eligible for the benefit, except for the few.
It is method to payroll tax to offset current cost of LTC medicaid.

[PS90]

Originally Posted by Hemlock140

That one sentence would be rare, because most people going on LTC would not then be working again. It is possible, though.

I don't remember exactly, but it states something about you having to contribute to WA Cares monthly for 5 years, or 3 out of 6 years, to get the max $36,500 benefit. Therefore, if you work in WA for 20 years, you get the max benefit after 5 years - but then you don't get to stop paying this tax, so you just contributed 15 years to the pot that doesn't gain you anything. That was what I meant.