Is Your State Considering a Payroll-Funded LTC Program?
There are currently 12 states looking to implement a Payroll-Funded LTC program similar to the one in WA. California is leading the way towards adopting a plan as early as 2023. The other states are: AK, CO, HI, IL, MI, MO, MN, NC, NY, OR, and UT.
As of 10/21/2021, 200,000+ Washingtonians have applied to “opt-out” of the Washington Cares Fund. In order to opt-out employees need to have in place an IRS code 7702b Long-Term Care Insurance Policy. The deadline to submit an exemption is 11/1/21.
I recommend you to review the program at https://wacaresfund.wa.gov. You will see the details of the program that Washington State initiated this year and goes into effect January 2022. This is important.... The WA State program ONLY has a lifetime benefit of $36,500, which is funded by a payroll tax of $.58 cents per $100 of payroll. There is no cap on the tax!!
Don’t be fooled by products on the market that are only accelerated benefit plans that fall under IRS Code 101g, these plans do not meet the definition of long-term care insurance.
Many carriers in WA (if not all) have paused the sale of new business due to the huge influx of applications that they received. Unfortunately, many are now left with no other option then to pay the tax.
If you are an advisor or insurance agent in any of these states AK, CA, CO, HI, IL, MI, MO, MN, NC, NY, OR, and UT (Resident or Non-Resident), now is the time to start educating your clients on what is coming and how they should plan for it.
Do not wait for these states to implement this program!
November is Long-Term Care Awareness Month and would be an ideal time to start your campaigns. Please reach out to one of our marketing specialists for email and social media content. 1-800-945-1953