Washington State LTC Mandate

What You Need to Know

Important new development from the State of Washington: On December 17, 2021, Governor Inslee’s office announced the delay to the collection of LTC premium through payroll withholdings affecting Washington State residents. As a result of this announcement, PayPal is no longer required to withhold the long-term care premium on all Washington employees' compensation (salary, bonuses, PTO, severance pay, etc.) for the state’s long-term care program, effective January 1, 2022. You will not see an LTC premium withholding on your first 2022 paycheck. We will continue to monitor developments as it’s released by the State of Washington.

What is long-term care insurance?

Long-term care insurance provides up to $100 per day (lifetime limit of $36,500) to help pay for in-home or assisted living expenses, such as bathing, dressing, eating, and medication management. 

How the state mandate affects you 

PayPal is now required to deduct 0.58 cents per $100 of income from your pay for all regular employees earning income in Washington. What does this potentially look like? Consider this example: If you make $50,000, then $24 per month will be deducted from your pay beginning January 1, 2022. There is no income limit for the withholding—all income is subject to this mandate.

This money withheld from your pay will fund the state’s Washington Cares Fund. Long-term care benefits will be available to qualifying individuals beginning in 2025. More information and important details about how this may affect you are available on the state's website.

Due to the December 17th announcement from the State of Washington, PayPal will no longer be deducting LTC premiums via payroll until further guidance.

View the official announcement

Eligibility for long-term care

You’re eligible to receive long-term care benefits through the state program if you:

  • Paid into the Washington Cares Fund for either 3 out of the last 6 years, or at least 10 years at any point in life without a break of 5 or more years 
  • Worked 500 hours each year during the years you contributed to the Washington Cares Fund 
  • Are at least 18 years old
  • Live in Washington state

Need to opt out? Time is limited!

There is a one-time window to opt out of paying into the Washington Cares Fund. If you opt out, you waive the right to receive long-term care benefits under the state program

If a qualified, private long-term care plan would fit your needs better than the state’s plan (based on your future living situation or retirement plans), you can apply for a permanent exemption with the state, but your coverage must be in effect before November 1, 2021. 

Things to know

Benefits provided under a private long-term care policy are typically richer than a state-provided plan. 

You must live in Washington when the need for long-term care arises. If not, you cannot receive the state benefit even if you paid into the fund as required.   

If you obtain long-term care coverage after November 1, you won’t be able to opt out of the state program. You’ll be responsible to pay both the private long-term care insurance premiums and the Washington Cares Fund withholdings.

The state exemption is permanent—once you opt out of the fund, you cannot opt back in.

Consult a financial advisor before choosing the best option for you. PayPal offers financial coaching to all eligible employees through Ayco.

Interested in learning more about individual LTC plan options and costs?

Get a quote today

How to submit an opt-out waiver

You can apply for an opt-out exemption October 1, 2021, through December 31, 2022. Watch for details on how to apply electronically.

After you receive your state exemption, you must provide a copy of your approval letter to PayPal to stop the long-term care premium withholdings. Scan, upload, and attach your approved exemption letter via the Bridge (only accessible within the PayPal firewall):

  • Click the green Contact Us icon on the lower right-hand corner of any site page.
  • Click Submit a Ticket. 
  • Select Payroll from the category drop-down menu. 

To prevent the withholding from being deducted before the first payroll period in 2022, submit your exemption approval letter by January 6, 2022. You cannot receive a refund for any premium withholdings made prior to submitting your approval letter. State exemptions can be submitted through December 2022.

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