Lakewood Chamber of Commerce
Board of Directors
Policy Position
Endorse Initiative 2124 – Washington Cares Opt-out
May 28, 2024
The Lakewood Chamber of Commerce Board of Directors endorses changing WA Cares Fund to a voluntary program instead of a mandatory one.
In 2019, the Legislature created the nation’s first mandatory, state-run long-term care benefit law—the WA Cares Fund, paid by worker contributions – a 0.58% payroll tax.
An employee’s lifetime benefits are capped at $36,500 and can be spent on qualified long-term care expenses. Starting in July 2026, benefits can be paid to employees who have contributed to the program for ten years, with no gaps in contributions greater than five years (in most cases). Some employees nearing retirement may qualify for prorated benefits, and some employees with a sudden need for care may also be able to access benefits.
A change in 2024 makes benefits portable for people who move out-of-state.
I-2124 adds a subsection to the WA Cares Fund statute requiring current employees to affirmatively elect to stay in the WA Cares Fund program and allows participants to opt out at any time. It also repeals the section limiting exemptions for most employees to those with alternative long-term care (LTC) coverage as of November 2021. These changes would make WA Cares Fund a voluntary program instead of mandatory. There is no provision in the initiative for refunding premiums already paid to the program by WA Cares Fund participants who choose to opt out.
If passed, the effective date would be December 5, 2024, 30 days after the election.
It’s becoming painfully clear that the lifetime benefit attached to the state’s mandatory long-term-care program will not be adequate even for Washingtonians who someday may qualify for WA Cares’ dollars.
It’s time for the state to update its website, even if it doesn’t update the inadequate benefit amount it promises workers who might one day qualify for WA Cares. Not doing so allows for more false hope.
The state has already been erroneously messaging that people can have “peace of mind” about long-term care because WA Cares exists. They can’t. Many workers won’t qualify for WA Cares, no matter how much money they pay into the fund during their working years or even their need for long term care.
Without WA Cares, some workers could save or invest money in better ways to help with potential long-term care. Lower-income workers could use the money for life needs they have today, instead of a possible life need in the future. Sometimes, these workers will be financing LTC for workers with higher incomes and more resources. Ouch.
The state should repeal its LTC law as soon as possible. It should have done away with WA Cares before voters have an opportunity to make WA Cares optional in November with Initiative 2124.
Instead of a payroll tax that harms workers, lawmakers should increase people’s awareness about long-term care and enact reforms that create a healthy, price-competitive insurance market. Most of all, lawmakers should protect Medicaid. That’s a safety-net taxpayers already provide people in need of help with LTC financing.