MYNORTHWEST NEWS

Bipartisan group of state lawmakers ask Gov. Inslee to pause long-term care insurance tax

Sep 24, 2021, 12:15 PM

Long term care...

A long-term care insurance tax goes into effect in Washington in January. (Getty Images)

(Getty Images)

A bipartisan group of state senators issued a letter to Gov. Jay Inslee this week, calling on him to suspend Washington’s upcoming long-term care insurance tax that is set to take effect in January.

Private long-term care insurance all but impossible to get ahead of new state tax

Unless a state resident has private, long-term care insurance by the end of October, most will have to pay the tax. All W2 employees who average 12.5 hours per week will start to see the deductions for a long-term care tax as of Jan. 1, 2022. A person earning $50,000 a year will pay $290 a year in additional taxes.

People with their own care policies can opt out, but those cost thousands of dollars a year. Those policies also need to be in place before the end of October.

With the deadline to opt out fast approaching — and insurance companies reportedly not taking on new policies for those looking for alternatives — state lawmakers are pushing to have the program paused.

“Many employees are seeking to become exempt from the new tax in this fragile economy, but they face a November 1 deadline to acquire insurance that is currently unavailable,” the letter from the group of state senators reads, in part. “Your intervention to suspend the tax and insurance purchase deadline would provide temporary relief to employees who face a major new tax and give time for the Legislature to work on a solution.”

Washingtonians create petition against long-term care tax

The coalition features prominent lawmakers from both sides of the aisle, including Republicans John Braun, Phil Fortunato, Mike Padden, and Judy Warnick, and Democrats Mark Mullet, Steve Hobbs, and Tim Sheldon, among others, totaling 23 state senators in all.

The hope from lawmakers who signed onto the letter is that a pause will allow for more time to better define the opt-out process, clarify how it effects workers who reside in neighboring states, and “avoid disruptions of the private insurance market.”

A coalition of 165 employers, business groups, local governments, and labor unions issued a similar plea to Gov. Inslee in mid-September, urging the formation of a bipartisan legislative leadership group to address the numerous concerns with the long-term care tax, and to consider pausing collection of the new payroll tax.

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Bipartisan group of state lawmakers ask Gov. Inslee to pause long-term care insurance tax