WACares Fund Long Term Services and Supports Trust

WACares Fund Long Term Services and Supports Trust Personnel/Payroll Association Meeting April Amundson, Policy Manager Kelly Lindseth, LTSS Manager

OLYMPIA, Wash. (AP) — Washington is poised to become the first state to establish an employee-paid program creating an insurance benefit to help offset the costs of long-term care, a step advocates say will help an aging population that is likely not prepared for the increasing costs needed for daily assistance.

Why is this important? More than 90% of seniors are uninsured for long-term care. According to AARP of Washington, 70% of residents 65 and older will require some type of assistance to live independently. Many assume that Medicare covers long-term care, but that's not the case except for limited care for skilled nursing care or rehabilitation. Qualifying for public coverage under Medicaid involves spending down lifetime savings to poverty level. Long term care is not covered by most insurance plans, with few private long-term care insurance plans currently existing and is unaffordable to many citizens generally requiring you to pass a health screening. According to AARP of Washington, the median retirement savings for people over 65 is just $148, 000, while the lifetime cost of care can average as high $266, 000.

The Path to WACares Fund 2022 2021 2019 State Legislature Passed SSHB 1087 • • ESD Collects Premiums DSHS Administers Benefit HCA Tracks Lifetime Benefit State Actuary Performs Actuarial Audit Functions 2020 ESD Agency Request Legislation SSB 6267 Passes. Amends exemptions and some definitions. HB 1323 October 1 ESD accepts exemptions through December 2022. January 1, Employers deduct premiums from employee wages. 2025 January 1, Benefit becomes available for qualified individuals

What the law will do? The benefit of $36, 500 can be used for a range of services and supports, including: Professional care in your home, a licensed residential facility or a nursing facility Training, pay and support for family members who provide care Adaptive equipment and technology like wheelchair ramps and medication reminder devices Home-delivered meals Home safety evaluations Rides to the doctor 5

What agencies are involved? • Administer benefits • Manage providers • Apply for demo waiver from CMS DSHS HCA • Process payments • Track benefit usage • Coordination of benefits LEAD AGENCY • Administer optional registrations and removals • Collect premiums and wage reports • Determine qualified individuals January 15, 2022 ESD State Actuary • Provide actuarial analysis to support Trust Fund solvency

Who is eligible? ‘Eligible beneficiary’ means a qualified individual who is 18 or older, residing in the state of Washington, determined to meet the minimum level of assistance with activities of daily living necessary to receive benefits through the trust program… RCW 50 B. 04. 010(6) ‘Qualified individual’ is someone who has paid into LTSS premiums for the equivalent of either: a) 10 years, 5 of those years without interruption • Working at least 500 hours during each of the 10 years OR b) 3 years within the last 6 years • Working at least 500 hours during each of the 3 years. RCW 50 B. 04. 010(14) & RCW 50 B. 04. 050

How different is LTSS from PFML for ESD? Clearly the purpose of the benefit is different, however there is a lot that is the same: • Employee, Employer, Employment, Wages (with exceptions) • Employers deduct premiums, report, and pay these premiums to ESD • Self-employed and federally recognized tribes can elect coverage • Employees covered by a CBA in existence on or before 10/19/2017 do not have to participate • To the extent possible, performance of investigations for premium compliance Notable differences (besides purposes for our program): • Premium amount & no employer contribution • No SSN wage cap on premium collection • ESD does not administer the benefits portion of this program Paid Family and Medical Leave | Employment Security Department 8

ESD Responsibility: Exemptions October 1, 2021 - December 31, 2022 – Accept exemption applications • “Exempt employee” means someone who has been granted a premium assessment exemption by ESD (SSB 6267). • Exempt employee must attest that they have long-term care insurance purchased before 11/1/2021. • Exemptions begin the quarter following approval. • Employees are not entitled to any refunds of premiums taken prior to approval. • Exempt employees are responsible for providing written notification to their employers. • Failure to notify does not entitle an employee to a premium refund. • After notification to the employer, employers are responsible to refund premiums deducted after the notification. • Exempt employees can never become a qualified individual. Paid Family and Medical Leave | Employment Security Department 9

ESD Responsibility: Premium Collection • Every employee contributes $0. 58 per $100 of earnings. [CATEGORY NAME] $52, 075/year • Premiums go into dedicated Trust Fund that can only be used for this program. • If you have private long-term care insurance by Nov. 1, 2021, you may apply to permanently withdraw from benefits Oct. 1, 2021 thru Dec. 31, 2022. January 15, 2022 [CATEGORY NAME] $302/year

ESD Responsibility: Premium Collection January 1, 2022 – Receive reports and collect premiums from employers. January 1, 2022 – Self-employed individuals can elect to participate. • Premium rate is initially set at 0. 58 of 1% of individual wages. • Beginning 1/1/2024, then biennially, premium rate is set by the LTSS Council at no more than 0. 58 of 1% of individual wages. • No employer contribution. • Employers report and pay collected premiums to ESD. RCW 50 B. 04. 080 Someone who makes $750 per week will pay $4. 35 into the Trust. Paid Family and Medical Leave | Employment Security Department 11

ESD Responsibility: determinations Qualified Individual January 1, 2025 – Vesting and Eligibility To meet vesting criteria, you must have earned your WA Cares benefit by working and contributing: • At least ten years at any point in your life without a break of five or more years within those ten years, or • Three of the last six years • And at least 500 hours per year during those years, then RCW 50 B. 04. 010(14) & RCW 50 B. 04. 050 Paid Family and Medical Leave | Employment Security Department 12

Paid Family and Medical Leave | Employment Security Department 13

Communication and outreach timeline January 15, 2022

Key Strategies and Next Steps • Create a unified Employer Experience for Paid Leave and Medical Leave • Integrated project plan and schedule for launch • DSHS & ESD collaboration of public awareness Paid Family and Medical Leave | Employment Security Department 15

Thank You To learn more, please visit: • WA Cares Fund wacaresfund. wa. gov • Sign up for ESD’s employer newsletter wacaresfund. wa. gov/employers • ESD Rulemaking for WACares Fund/LTSS https: //esd. wa. gov/newsroom/rulemaking/ltss Benjamin Veghte, Ph. D. DSHS Kelly Lindseth ESD April Amundson ESD WA Cares Fund Director benjamin. veghte@dshs. wa. gov WA Cares Fund Program Manager klindseth@esd. wa. gov Leave and Care Policy and Rules Manager april. amundson@esd. wa. gov January 15, 2022

Questions? Paid Family and Medical Leave | Employment Security Department 17