Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

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chupapa
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by chupapa »

so what is the minimum requirement when looking for LTCi? one of the agent I talked to mentioned this:
the minimum amount of coverage someone should purchase if they want to opt-out of the Washington LTC Trust Act is:
$100 daily benefit
$36,500 lifetime maximum
3% compound inflation growth with no cap
30 day elimination period
does it need 3% compound inflation and 30 da elimination period?
definitelynotMike
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by definitelynotMike »

chupapa wrote: Sun May 23, 2021 3:56 pm so what is the minimum requirement when looking for LTCi? one of the agent I talked to mentioned this:
the minimum amount of coverage someone should purchase if they want to opt-out of the Washington LTC Trust Act is:
$100 daily benefit
$36,500 lifetime maximum
3% compound inflation growth with no cap
30 day elimination period
does it need 3% compound inflation and 30 da elimination period?
In terms of opting out there are no requirements other than it be classified as a LTC plan (as defined in RCW 48.83.020). There was some early talk that the ESD rules would require a plan that offers at least the same benefits as the State's, but those didn't materialize so any valid LTCi plan will work.
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willthrill81
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

definitelynotMike wrote: Mon May 24, 2021 12:09 pm
chupapa wrote: Sun May 23, 2021 3:56 pm so what is the minimum requirement when looking for LTCi? one of the agent I talked to mentioned this:
the minimum amount of coverage someone should purchase if they want to opt-out of the Washington LTC Trust Act is:
$100 daily benefit
$36,500 lifetime maximum
3% compound inflation growth with no cap
30 day elimination period
does it need 3% compound inflation and 30 da elimination period?
In terms of opting out there are no requirements other than it be classified as a LTC plan (as defined in RCW 48.83.020). There was some early talk that the ESD rules would require a plan that offers at least the same benefits as the State's, but those didn't materialize so any valid LTCi plan will work.
Correct. Right now, any LTC plan as defined in the referenced statute qualifies for the opt out.
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chupapa
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by chupapa »

when people say it's permanent opt out, so they won't come back and check again? like when you change the job later or something you have to proof every year that you still have the policy
daave
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by daave »

chupapa wrote: Mon May 24, 2021 1:36 pm when people say it's permanent opt out, so they won't come back and check again? like when you change the job later or something you have to proof every year that you still have the policy
They will give you some sort of certificate/record saying you're opted out, which you present to future employers. There is no funding for the ESD to do ongoing verification years in future.
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batpot
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by batpot »

Soon2BXProgrammer wrote: Sat May 22, 2021 11:20 am
sbh8 wrote: Sat May 22, 2021 11:05 am Is there any reason to not get the cheapest plan possible to opt out of the tax? LTCi was not on my radar yet. I am in my late 30s.
The flip side is.. maybe its a reasonable decision to buy a small but reasonable policy that is decent but less than the tax. (Such as one with $100 day benefit for 2 years but with a 2% compound inflation adjustor)
If nothing else it has forced people to consider it...but I'm too young.
As rates vary by age, rule of thumb I've seen is around 50 years old is the optimal balance between premium, and years of payments.

However, the one advantage of the WA plan is you stop paying when you stop getting a W2, while private plans you pay until death.
If you're low income, and a little more than 10 years from retirement (the vestment duration), it would probably make a lot of sense to just take the WA plan, but you also have to spend your retirement year in WA.
Whakamole
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Whakamole »

prd1982 wrote: Fri May 21, 2021 8:33 pm
willthrill81 wrote: Fri May 21, 2021 8:09 pm
prd1982 wrote: Fri May 21, 2021 6:38 pm
WoW2012 wrote: Fri May 21, 2021 6:34 pm
prd1982 wrote: Fri May 21, 2021 6:30 pm Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
Why do you think you can drop coverage within a couple of months without consequence?
I thought once you were approved as having LTCi, you could drop coverage.
As long as you have proof that you were covered by a policy on 11/1/2021, the law is clear that you qualify for the permanent opt out. This is a legitimate, legal loophole, and the ESD cannot 'close it' afterward; only the legislature could, but I don't think that even they could do it retroactively.
So back to my question. Why would an insurance company write a policy they expect to be canceled in a couple of months? It has got to cost them and the agent more than the premiums.
For simplified issue, they checks seem to be mostly automated. If it's less expensive to create the policy (especially for the bulk plans that large employers are setting up), with a strong incentive for people to sign for these due to the impending deadline and hassle of a traditional policy, and these policies will be cancelled next year - the insurance company may be turning a profit. I hope they do, at least; they're providing a public service.
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batpot
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by batpot »

Whakamole wrote: Mon May 24, 2021 3:39 pm For simplified issue, they checks seem to be mostly automated. If it's less expensive to create the policy (especially for the bulk plans that large employers are setting up), with a strong incentive for people to sign for these due to the impending deadline and hassle of a traditional policy, and these policies will be cancelled next year - the insurance company may be turning a profit. I hope they do, at least; they're providing a public service.
Agree, I think this is a massive windfall for the LTCI companies.
Kookaburra
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Kookaburra »

WoW2012- hoping you can chime in on a couple questions re: LTCi policies.

1. If one has a policy, can they cancel anytime by simply not paying their premium? Or is there a process to go through?

2. As follow-up to question #1, is there a penalty fee to cancel?

3. When one applies for LTCi, can they request it start on a specific future date that might be past when it takes to underwrite and approve. For example, apply in June, get approval in September, but request it take effect on Oct 31?

Thank you in advance for your help!
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batpot
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by batpot »

Kookaburra wrote: Tue May 25, 2021 10:11 am WoW2012- hoping you can chime in on a couple questions re: LTCi policies.

1. If one has a policy, can they cancel anytime by simply not paying their premium? Or is there a process to go through?

2. As follow-up to question #1, is there a penalty fee to cancel?

3. When one applies for LTCi, can they request it start on a specific future date that might be past when it takes to underwrite and approve. For example, apply in June, get approval in September, but request it take effect on Oct 31?

Thank you in advance for your help!
These are excellent questions to ask your agent before you sign up.
boombaz
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by boombaz »

I didn't see this mentioned in the thread so far: I work for a late stage pre-IPO tech company that I expect to IPO within the next two years. The tax hit from this one-time windfall of W-2 income may range from $50k to $200k for me, which makes opting-out of the LTCi wage tax an obvious choice.
SweetFire
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by SweetFire »

I read the whole thread and found that this is the list of companies selling LTC in WA, thanks to WoW2012
Bankers Life & Casualty
Federal Long-Term Care Insurance Program (for federal employees and retirees and their spouses)
Genworth (only if you buy directly from the home office, not offered through agents/brokers)
Knights of Columbus (for members of the fraternal organization)
LifeSecure (worksite only)
Mutual of Omaha
National Guardian Life
New York Life
Northwestern Mutual
Thrivent
Transamerica (worksite only)

Should I request a quote on their website or is there a consensus on which one is best. Also does anyone have any recommendation for an agent.
Kookaburra
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Kookaburra »

Has there been any update from ESD on minimum coverage requirements of a private LTC policy used as a basis for exemption?

How are folks approaching the inflation benefit aspect in terms of obtaining policies simply for exemption? I’ve seen posts with references to 0%, 2%, and 3%. I don’t even know what the State’s program offers as a point of comparison.
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willthrill81
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

Kookaburra wrote: Tue Jun 01, 2021 4:24 pm How are folks approaching the inflation benefit aspect in terms of obtaining policies simply for exemption? I’ve seen posts with references to 0%, 2%, and 3%. I don’t even know what the State’s program offers as a point of comparison.
I think it depends on whether you plan on keeping the policy or cancelling it after November 1st. If you plan on keeping it, 2% is probably fine since the state plan's benefit will be adjusted for inflation. If you plan on cancelling your policy later this year, then you don't need any inflation adjustment.
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Kookaburra
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Kookaburra »

willthrill81 wrote: Tue Jun 01, 2021 4:29 pm
Kookaburra wrote: Tue Jun 01, 2021 4:24 pm How are folks approaching the inflation benefit aspect in terms of obtaining policies simply for exemption? I’ve seen posts with references to 0%, 2%, and 3%. I don’t even know what the State’s program offers as a point of comparison.
I think it depends on whether you plan on keeping the policy or cancelling it after November 1st. If you plan on keeping it, 2% is probably fine since the state plan's benefit will be adjusted for inflation. If you plan on cancelling your policy later this year, then you don't need any inflation adjustment.
I plan on cancelling after approval/verification . Doesn’t the possible need for an inflation benefit depend on what the ESD comes back with in terms of minimum criteria for exemption? If they end up requiring a policy at least as good as the state’s program, then having 0% might not cut it.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

Kookaburra wrote: Tue Jun 01, 2021 4:41 pm
willthrill81 wrote: Tue Jun 01, 2021 4:29 pm
Kookaburra wrote: Tue Jun 01, 2021 4:24 pm How are folks approaching the inflation benefit aspect in terms of obtaining policies simply for exemption? I’ve seen posts with references to 0%, 2%, and 3%. I don’t even know what the State’s program offers as a point of comparison.
I think it depends on whether you plan on keeping the policy or cancelling it after November 1st. If you plan on keeping it, 2% is probably fine since the state plan's benefit will be adjusted for inflation. If you plan on cancelling your policy later this year, then you don't need any inflation adjustment.
I plan on cancelling after approval/verification . Doesn’t the possible need for an inflation benefit depend on what the ESD comes back with in terms of minimum criteria for exemption? If they end up requiring a policy at least as good as the state’s program, then having 0% might not cut it.
Do you believe that they will institute minimum criteria shortly before November 1st? At this point, I don't see how they legally can. The law is clear that any LTCi policy qualifies for the opt-out.
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Kookaburra
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Kookaburra »

willthrill81 wrote: Tue Jun 01, 2021 4:46 pm
Kookaburra wrote: Tue Jun 01, 2021 4:41 pm
willthrill81 wrote: Tue Jun 01, 2021 4:29 pm
Kookaburra wrote: Tue Jun 01, 2021 4:24 pm How are folks approaching the inflation benefit aspect in terms of obtaining policies simply for exemption? I’ve seen posts with references to 0%, 2%, and 3%. I don’t even know what the State’s program offers as a point of comparison.
I think it depends on whether you plan on keeping the policy or cancelling it after November 1st. If you plan on keeping it, 2% is probably fine since the state plan's benefit will be adjusted for inflation. If you plan on cancelling your policy later this year, then you don't need any inflation adjustment.
I plan on cancelling after approval/verification . Doesn’t the possible need for an inflation benefit depend on what the ESD comes back with in terms of minimum criteria for exemption? If they end up requiring a policy at least as good as the state’s program, then having 0% might not cut it.
Do you believe that they will institute minimum criteria shortly before November 1st? At this point, I don't see how they legally can. The law is clear that any LTCi policy qualifies for the opt-out.

My understanding is that the Act currently only references RCW 48.83.020 which doesn’t specify criteria. But after having re-read this entire post, it seems the ESD can still “write or change the rules” over the next few months with respect to minimum criteria (inflation adjustment, Elimination period, etc.). Or is that not the case?

Back in April, there were numerous replies about soon-to-be-released update from ESD on minimum criteria. But then I never saw anything come of that. I know the ESD is notoriously slow. So I’m wondering if we are all still in limbo waiting on them, or if people are proceeding assuming that any policy will do, even if coverage isn’t as good as the state’s program?
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willthrill81
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

Kookaburra wrote: Tue Jun 01, 2021 4:52 pm
willthrill81 wrote: Tue Jun 01, 2021 4:46 pm
Kookaburra wrote: Tue Jun 01, 2021 4:41 pm
willthrill81 wrote: Tue Jun 01, 2021 4:29 pm
Kookaburra wrote: Tue Jun 01, 2021 4:24 pm How are folks approaching the inflation benefit aspect in terms of obtaining policies simply for exemption? I’ve seen posts with references to 0%, 2%, and 3%. I don’t even know what the State’s program offers as a point of comparison.
I think it depends on whether you plan on keeping the policy or cancelling it after November 1st. If you plan on keeping it, 2% is probably fine since the state plan's benefit will be adjusted for inflation. If you plan on cancelling your policy later this year, then you don't need any inflation adjustment.
I plan on cancelling after approval/verification . Doesn’t the possible need for an inflation benefit depend on what the ESD comes back with in terms of minimum criteria for exemption? If they end up requiring a policy at least as good as the state’s program, then having 0% might not cut it.
Do you believe that they will institute minimum criteria shortly before November 1st? At this point, I don't see how they legally can. The law is clear that any LTCi policy qualifies for the opt-out.

My understanding is that the Act currently only references RCW 48.83.020 which doesn’t specify criteria. But after having re-read this entire post, it seems the ESD can still “write or change the rules” over the next few months with respect to minimum criteria (inflation adjustment, Elimination period, etc.). Or is that not the case?

Back in April, there were numerous replies about soon-to-be-released update from ESD on minimum criteria. But then I never saw anything come of that. I know the ESD is notoriously slow. So I’m wondering if we are all still in limbo waiting on them, or if people are proceeding assuming that any policy will do, even if coverage isn’t as good as the state’s program?
In this post is reasoning for why I don't believe that the law allows the ESD to say that a LTCi policy doesn't qualify. The law says that LTCi qualifies and puts no restrictions on it. I don't believe that the ESD can change the legal definition of LTCi down the road.
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Point
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Point »

My guess is it does not travel with you state to state as you move. Ie, it’s a tax with little benefit. Not to mention that it covers very little needed when the time comes.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

willthrill81 wrote: Fri May 21, 2021 9:11 pm I'm pretty sure that they cannot legally refuse legitimate customers.
Of course they can. Some companies have already stopped accepting applications from anyone under the age of 40.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

WoW2012 wrote: Tue Jun 01, 2021 10:23 pm
willthrill81 wrote: Fri May 21, 2021 9:11 pm I'm pretty sure that they cannot legally refuse legitimate customers.
Of course they can. Some companies have already stopped accepting applications from anyone under the age of 40.
The state's insurance commissioner will allow them to refuse customers for no objective reason?
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ondarvr
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by ondarvr »

I've read the rules several times, but still have questions about qualifying for benefits under this policy.

At 65 I don't plan to work much longer, not more than 3 three year or so.

It says to qualify you need to have worked for 3 of the last 6 years and contributed to the program.

It also I says that benefits will begin in 2025.

From this I understand that if I work for three years after 1/1/2022 and retire, I should qualify for benefits.

At 65 a qualifying LTC plan to opt out of the state plan would cost me more than the state plan for the three years. I don't plan on buying a LTC because if I do need LTC I plan to sell my house, which is paid for.

So if I work 3 years I at least get this benefit at very reasonable cost.

Am I wrong in my understanding of this?
downshiftme
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by downshiftme »

From this I understand that if I work for three years after 1/1/2022 and retire, I should qualify for benefits.
If you work for three years, and then you retire, you need to use the long term care benefit during the next three years. After that you no longer qualify as paying in three of the last six years. So of you need long term care almost immediately, you might be able to claim a benefit. Otherwise, you need to pay in for the full ten years to qualify for benefits.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

willthrill81 wrote: Tue Jun 01, 2021 10:39 pm
WoW2012 wrote: Tue Jun 01, 2021 10:23 pm
willthrill81 wrote: Fri May 21, 2021 9:11 pm I'm pretty sure that they cannot legally refuse legitimate customers.
Of course they can. Some companies have already stopped accepting applications from anyone under the age of 40.
The state's insurance commissioner will allow them to refuse customers for no objective reason?
Age is objective.
Health is objective.
Choice of benefits is objective.

Yes, the insurance commissioner will allow insurance companies to refuse policies for someone because of their age or their health or because they apply for benefits that do not meet the companies minimum standards. (Nearly every LTC insurance company has already raised the minimum required benefit amounts for new applications for Washington residents).

As an agent I can refuse an applicant based upon subjective reasons or objective reasons.

#BeNiceToYourInsuranceAgent
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

ondarvr wrote: Tue Jun 01, 2021 11:43 pm I've read the rules several times, but still have questions about qualifying for benefits under this policy.

At 65 I don't plan to work much longer, not more than 3 three year or so.

It says to qualify you need to have worked for 3 of the last 6 years and contributed to the program.

It also I says that benefits will begin in 2025.

From this I understand that if I work for three years after 1/1/2022 and retire, I should qualify for benefits.

At 65 a qualifying LTC plan to opt out of the state plan would cost me more than the state plan for the three years. I don't plan on buying a LTC because if I do need LTC I plan to sell my house, which is paid for.

So if I work 3 years I at least get this benefit at very reasonable cost.

Am I wrong in my understanding of this?

Your understanding is wrong.
After you've been retired for 4 years, you will no longer qualify for benefits under the Trust Act because you will no longer be satisfying the "worked 3 of the last 6 years" requirement.

2022 working, not yet covered
2023 working, not yet covered
2024 working, not yet covered
2025 retired but covered since you worked 3 of last 6 years
2026 retired but covered since you worked 3 of last 6 years
2027 retired but covered since you worked 3 of last 6 years
2028 retired but not covered since you have not worked 3 of the last 6 years
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

prd1982 wrote: Fri May 21, 2021 6:38 pm
WoW2012 wrote: Fri May 21, 2021 6:34 pm
prd1982 wrote: Fri May 21, 2021 6:30 pm Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
Why do you think you can drop coverage within a couple of months without consequence?
I thought once you were approved as having LTCi, you could drop coverage.
Why would you think that?
Is that the intent of this law?
The law does allow for verification by the ESD separate from the "attestation period".
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

WoW2012 wrote: Wed Jun 02, 2021 10:22 am
prd1982 wrote: Fri May 21, 2021 6:38 pm
WoW2012 wrote: Fri May 21, 2021 6:34 pm
prd1982 wrote: Fri May 21, 2021 6:30 pm Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
Why do you think you can drop coverage within a couple of months without consequence?
I thought once you were approved as having LTCi, you could drop coverage.
Why would you think that?
Is that the intent of this law?
The law does allow for verification by the ESD separate from the "attestation period".
Because the law says that those who have a LTCi policy in place on 11/1/2021 qualify for the opt out. I haven't seen anything in the law that says that the policy must be maintained for the opt out to remain in effect. Everything says that the opt out is permanent.
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WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

willthrill81 wrote: Wed Jun 02, 2021 10:25 am
WoW2012 wrote: Wed Jun 02, 2021 10:22 am
prd1982 wrote: Fri May 21, 2021 6:38 pm
WoW2012 wrote: Fri May 21, 2021 6:34 pm
prd1982 wrote: Fri May 21, 2021 6:30 pm Given that you will be able to drop coverage within a couple of months, why would any LTCi company or salesperson write a policy on a WA resident before the cutoff date? I’m sure the company would lose money.
Why do you think you can drop coverage within a couple of months without consequence?
I thought once you were approved as having LTCi, you could drop coverage.
Why would you think that?
Is that the intent of this law?
The law does allow for verification by the ESD separate from the "attestation period".
Because the law says that those who have a LTCi policy in place on 11/1/2021 qualify for the opt out. I haven't seen anything in the law that says that the policy must be maintained for the opt out to remain in effect. Everything says that the opt out is permanent.
We'll see.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Kookaburra
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Kookaburra »

WoW2012 wrote: Wed Jun 02, 2021 10:10 am
As an agent I can refuse an applicant based upon subjective reasons or objective reasons.

#BeNiceToYourInsuranceAgent
Wow. And this why the insurance industry has the reputation that it does.
#BeNiceToYourCustomers
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Soon2BXProgrammer
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Soon2BXProgrammer »

Kookaburra wrote: Wed Jun 02, 2021 10:47 am
WoW2012 wrote: Wed Jun 02, 2021 10:10 am
As an agent I can refuse an applicant based upon subjective reasons or objective reasons.

#BeNiceToYourInsuranceAgent
Wow. And this why the insurance industry has the reputation that it does.
#BeNiceToYourCustomers
Insurance Agents work for the Insurance company. They are required by their contracts with their companies to protect the company.

The term "agent" means "a person who acts on behalf of another person or group." which means they are an agent of the insurance company. They write insurance that they think is good business for the insurance agency.

Insurance agents are NOT agents of the customer.

This is similar to "registered representative" of a broker/dealer in the investment world.
Last edited by Soon2BXProgrammer on Wed Jun 02, 2021 11:08 am, edited 1 time in total.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by prd1982 »

Kookaburra wrote: Wed Jun 02, 2021 10:47 am
WoW2012 wrote: Wed Jun 02, 2021 10:10 am
As an agent I can refuse an applicant based upon subjective reasons or objective reasons.

#BeNiceToYourInsuranceAgent
Wow. And this why the insurance industry has the reputation that it does.
#BeNiceToYourCustomers
Why, in this case. If you get a job offer at 500K/yr, but then find out they plan to lay you off after a month, I bet you would decline as well.
Kookaburra
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Kookaburra »

Soon2BXProgrammer wrote: Wed Jun 02, 2021 11:07 am
Kookaburra wrote: Wed Jun 02, 2021 10:47 am
WoW2012 wrote: Wed Jun 02, 2021 10:10 am
As an agent I can refuse an applicant based upon subjective reasons or objective reasons.

#BeNiceToYourInsuranceAgent
Wow. And this why the insurance industry has the reputation that it does.
#BeNiceToYourCustomers
Insurance Agents work for the Insurance company. They are required by their contracts with their companies to protect the company.

The term "agent" means "a person who acts on behalf of another person or group." which means they are an agent of the insurance company. They write insurance that they think is good business for the insurance agency.

Insurance agents are NOT agents of the customer.

This is similar to "registered representative" of a broker/dealer in the investment world.
That’s not really the point here. How about #BeNiceToEveryone
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Soon2BXProgrammer
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Soon2BXProgrammer »

Kookaburra wrote: Wed Jun 02, 2021 11:17 am
Soon2BXProgrammer wrote: Wed Jun 02, 2021 11:07 am
Kookaburra wrote: Wed Jun 02, 2021 10:47 am
WoW2012 wrote: Wed Jun 02, 2021 10:10 am
As an agent I can refuse an applicant based upon subjective reasons or objective reasons.

#BeNiceToYourInsuranceAgent
Wow. And this why the insurance industry has the reputation that it does.
#BeNiceToYourCustomers
Insurance Agents work for the Insurance company. They are required by their contracts with their companies to protect the company.

The term "agent" means "a person who acts on behalf of another person or group." which means they are an agent of the insurance company. They write insurance that they think is good business for the insurance agency.

Insurance agents are NOT agents of the customer.

This is similar to "registered representative" of a broker/dealer in the investment world.
That’s not really the point here. How about #BeNiceToEveryone
I am not arguing the "be nice" statement. I agree be nice. there is nothing nice or not nice about deciding that someone's risk profile isn't profitable.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

Kookaburra wrote: Wed Jun 02, 2021 10:47 am
WoW2012 wrote: Wed Jun 02, 2021 10:10 am
As an agent I can refuse an applicant based upon subjective reasons or objective reasons.

#BeNiceToYourInsuranceAgent
Wow. And this why the insurance industry has the reputation that it does.
#BeNiceToYourCustomers
As an insurance agent who specializes in long-term care insurance here in Washington, I'm passing out "get out of jail free" cards. Don't be mean to the people who are authorized to give you that card.

Sadly, at least 25% of those who want to opt-out won't be able to because they can't health-qualify for long-term care insurance. Make sure you work with a specialist who knows who will and who won't insure you.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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willthrill81
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

WoW2012 wrote: Wed Jun 02, 2021 10:36 am
willthrill81 wrote: Wed Jun 02, 2021 10:25 am
WoW2012 wrote: Wed Jun 02, 2021 10:22 am
prd1982 wrote: Fri May 21, 2021 6:38 pm
WoW2012 wrote: Fri May 21, 2021 6:34 pm

Why do you think you can drop coverage within a couple of months without consequence?
I thought once you were approved as having LTCi, you could drop coverage.
Why would you think that?
Is that the intent of this law?
The law does allow for verification by the ESD separate from the "attestation period".
Because the law says that those who have a LTCi policy in place on 11/1/2021 qualify for the opt out. I haven't seen anything in the law that says that the policy must be maintained for the opt out to remain in effect. Everything says that the opt out is permanent.
We'll see.
From my reading of the law, it would have to be changed in order for the ESD to deny the opt out to those have a policy on 11/1/2021 but don't maintain the policy beyond that date. As it is currently written, the law is very clear that those with a LTCi policy on 11/1/2021 are permanently opted out.
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WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

willthrill81 wrote: Wed Jun 02, 2021 11:40 am
WoW2012 wrote: Wed Jun 02, 2021 10:36 am
willthrill81 wrote: Wed Jun 02, 2021 10:25 am
WoW2012 wrote: Wed Jun 02, 2021 10:22 am
prd1982 wrote: Fri May 21, 2021 6:38 pm

I thought once you were approved as having LTCi, you could drop coverage.
Why would you think that?
Is that the intent of this law?
The law does allow for verification by the ESD separate from the "attestation period".
Because the law says that those who have a LTCi policy in place on 11/1/2021 qualify for the opt out. I haven't seen anything in the law that says that the policy must be maintained for the opt out to remain in effect. Everything says that the opt out is permanent.
We'll see.
From my reading of the law, it would have to be changed in order for the ESD to deny the opt out to those have a policy on 11/1/2021 but don't maintain the policy beyond that date. As it is currently written, the law is very clear that those with a LTCi policy on 11/1/2021 are permanently opted out.
The law has already been changed 3x.
Stopping tax cheats is a good thing, isn't it?
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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willthrill81
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by willthrill81 »

WoW2012 wrote: Wed Jun 02, 2021 12:01 pm
willthrill81 wrote: Wed Jun 02, 2021 11:40 am
WoW2012 wrote: Wed Jun 02, 2021 10:36 am
willthrill81 wrote: Wed Jun 02, 2021 10:25 am
WoW2012 wrote: Wed Jun 02, 2021 10:22 am

Why would you think that?
Is that the intent of this law?
The law does allow for verification by the ESD separate from the "attestation period".
Because the law says that those who have a LTCi policy in place on 11/1/2021 qualify for the opt out. I haven't seen anything in the law that says that the policy must be maintained for the opt out to remain in effect. Everything says that the opt out is permanent.
We'll see.
From my reading of the law, it would have to be changed in order for the ESD to deny the opt out to those have a policy on 11/1/2021 but don't maintain the policy beyond that date. As it is currently written, the law is very clear that those with a LTCi policy on 11/1/2021 are permanently opted out.
The law has already been changed 3x.
Stopping tax cheats is a good thing, isn't it?
Taking advantage of the law as it is written is not cheating or tax evasion.
The Supreme Court in Gregory v. Helvering, 293 U.S. 465 (1935) defined permissible tax avoidance as actions that “reduce, avoid, minimize, or alleviate taxes through wholly legitimate means”.
https://klasing-associates.com/tax-evas ... s%E2%80%9D.
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Kookaburra
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Kookaburra »

WoW2012 wrote: Wed Jun 02, 2021 11:39 am
Kookaburra wrote: Wed Jun 02, 2021 10:47 am
WoW2012 wrote: Wed Jun 02, 2021 10:10 am
As an agent I can refuse an applicant based upon subjective reasons or objective reasons.

#BeNiceToYourInsuranceAgent
Wow. And this why the insurance industry has the reputation that it does.
#BeNiceToYourCustomers
As an insurance agent who specializes in long-term care insurance here in Washington, I'm passing out "get out of jail free" cards. Don't be mean to the people who are authorized to give you that card.
I would be interested to understand how selling a policy is giving a “get out of jail free card.” I think you give yourself too much credit.
Whakamole
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Whakamole »

willthrill81 wrote: Tue Jun 01, 2021 10:39 pm
WoW2012 wrote: Tue Jun 01, 2021 10:23 pm
willthrill81 wrote: Fri May 21, 2021 9:11 pm I'm pretty sure that they cannot legally refuse legitimate customers.
Of course they can. Some companies have already stopped accepting applications from anyone under the age of 40.
The state's insurance commissioner will allow them to refuse customers for no objective reason?
The state's insurance commissioner would love to have people under 40 pay this tax for as long as they work in the state, whether they plan to stay or not. It's part of the scam.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

Kookaburra wrote: Wed Jun 02, 2021 12:44 pm

I would be interested to understand how selling a policy is giving a “get out of jail free card.” I think you give yourself too much credit.
Because without an LTCi policy people are in the WaLTCTA tax jail.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
chupapa
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by chupapa »

I am still confused whether we can have the permanent opt out or we will eventually end up having LTCi for as long as until we still work and live in WA. Please correct me if i am wrong, currently any LTCi will be qualify for opt out?
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Soon2BXProgrammer
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Soon2BXProgrammer »

chupapa wrote: Thu Jun 03, 2021 12:11 pm I am still confused whether we can have the permanent opt out or we will eventually end up having LTCi for as long as until we still work and live in WA. Please correct me if i am wrong, currently any LTCi will be qualify for opt out?
currently there is no definition for what qualifies as LTCi in the law except, that they call out that life insurance with living benefit riders that don't test for activities of daily living, do NOT count.

You need to assume you need to pay for the LTCi. the state legislature has changed the law multiple times, i wouldn't take the risk of cancelling after a month after the opt out period.

I would buy something that you might consider keeping... Say $100/day, 2 years, with 2% compound inflation. It will probably be less then the tax if your high income, and over the long run the inflation adjuster will keep it worth something. if your young any policy without an inflation adjuster is probably worthless by the time you would make a claim. (unless you picked some crazy face value today, but the issue with that is that its more expensive because they are providing more insurance for when your young, and more then likely you don't need it.. so its providing the biggest real benefit at the wrong time in life).
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
chupapa
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by chupapa »

Soon2BXProgrammer wrote: Thu Jun 03, 2021 12:22 pm
chupapa wrote: Thu Jun 03, 2021 12:11 pm I am still confused whether we can have the permanent opt out or we will eventually end up having LTCi for as long as until we still work and live in WA. Please correct me if i am wrong, currently any LTCi will be qualify for opt out?
currently there is no definition for what qualifies as LTCi in the law except, that they call out that life insurance with living benefit riders that don't test for activities of daily living, do NOT count.

You need to assume you need to pay for the LTCi. the state legislature has changed the law multiple times, i wouldn't take the risk of cancelling after a month after the opt out period.

I would buy something that you might consider keeping... Say $100/day, 2 years, with 2% compound inflation. It will probably be less then the tax if your high income, and over the long run the inflation adjuster will keep it worth something. if your young any policy without an inflation adjuster is probably worthless by the time you would make a claim. (unless you picked some crazy face value today, but the issue with that is that its more expensive because they are providing more insurance for when your young, and more then likely you don't need it.. so its providing the biggest real benefit at the wrong time in life).
what do you mean by 2 years? mean the policy will valid only 2 years?
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Soon2BXProgrammer
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Soon2BXProgrammer »

chupapa wrote: Thu Jun 03, 2021 9:42 pm
Soon2BXProgrammer wrote: Thu Jun 03, 2021 12:22 pm
chupapa wrote: Thu Jun 03, 2021 12:11 pm I am still confused whether we can have the permanent opt out or we will eventually end up having LTCi for as long as until we still work and live in WA. Please correct me if i am wrong, currently any LTCi will be qualify for opt out?
currently there is no definition for what qualifies as LTCi in the law except, that they call out that life insurance with living benefit riders that don't test for activities of daily living, do NOT count.

You need to assume you need to pay for the LTCi. the state legislature has changed the law multiple times, i wouldn't take the risk of cancelling after a month after the opt out period.

I would buy something that you might consider keeping... Say $100/day, 2 years, with 2% compound inflation. It will probably be less then the tax if your high income, and over the long run the inflation adjuster will keep it worth something. if your young any policy without an inflation adjuster is probably worthless by the time you would make a claim. (unless you picked some crazy face value today, but the issue with that is that its more expensive because they are providing more insurance for when your young, and more then likely you don't need it.. so its providing the biggest real benefit at the wrong time in life).
what do you mean by 2 years? mean the policy will valid only 2 years?
sorry, two years of benefits at $100/day.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
chupapa
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by chupapa »

Soon2BXProgrammer wrote: Thu Jun 03, 2021 9:55 pm
chupapa wrote: Thu Jun 03, 2021 9:42 pm
Soon2BXProgrammer wrote: Thu Jun 03, 2021 12:22 pm
chupapa wrote: Thu Jun 03, 2021 12:11 pm I am still confused whether we can have the permanent opt out or we will eventually end up having LTCi for as long as until we still work and live in WA. Please correct me if i am wrong, currently any LTCi will be qualify for opt out?
currently there is no definition for what qualifies as LTCi in the law except, that they call out that life insurance with living benefit riders that don't test for activities of daily living, do NOT count.

You need to assume you need to pay for the LTCi. the state legislature has changed the law multiple times, i wouldn't take the risk of cancelling after a month after the opt out period.

I would buy something that you might consider keeping... Say $100/day, 2 years, with 2% compound inflation. It will probably be less then the tax if your high income, and over the long run the inflation adjuster will keep it worth something. if your young any policy without an inflation adjuster is probably worthless by the time you would make a claim. (unless you picked some crazy face value today, but the issue with that is that its more expensive because they are providing more insurance for when your young, and more then likely you don't need it.. so its providing the biggest real benefit at the wrong time in life).
what do you mean by 2 years? mean the policy will valid only 2 years?
sorry, two years of benefits at $100/day.
so what happens after 2 years then? you need to renew the policy?
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Soon2BXProgrammer
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Soon2BXProgrammer »

chupapa wrote: Fri Jun 04, 2021 12:19 am
Soon2BXProgrammer wrote: Thu Jun 03, 2021 9:55 pm
chupapa wrote: Thu Jun 03, 2021 9:42 pm
Soon2BXProgrammer wrote: Thu Jun 03, 2021 12:22 pm
chupapa wrote: Thu Jun 03, 2021 12:11 pm I am still confused whether we can have the permanent opt out or we will eventually end up having LTCi for as long as until we still work and live in WA. Please correct me if i am wrong, currently any LTCi will be qualify for opt out?
currently there is no definition for what qualifies as LTCi in the law except, that they call out that life insurance with living benefit riders that don't test for activities of daily living, do NOT count.

You need to assume you need to pay for the LTCi. the state legislature has changed the law multiple times, i wouldn't take the risk of cancelling after a month after the opt out period.

I would buy something that you might consider keeping... Say $100/day, 2 years, with 2% compound inflation. It will probably be less then the tax if your high income, and over the long run the inflation adjuster will keep it worth something. if your young any policy without an inflation adjuster is probably worthless by the time you would make a claim. (unless you picked some crazy face value today, but the issue with that is that its more expensive because they are providing more insurance for when your young, and more then likely you don't need it.. so its providing the biggest real benefit at the wrong time in life).
what do you mean by 2 years? mean the policy will valid only 2 years?
sorry, two years of benefits at $100/day.
so what happens after 2 years then? you need to renew the policy?
you pay until you use it... but long term care has a limited number of days or years of benefits . (there used to be uncapped benefits, but those policies have mostly disappeared or are too expensive). A lot of people die within two years of needing LTC, another huge chunk dies within 3... but there is a long tail for those that only need it due to memory care, such as my aunt who has been in a facility for a decade+.

The WA state plan is basically a $100/day policy that pays for a year, it comes with a "potential' of inflation adjustor if the fund is actuarially sound.

$100/day doesn't cover ltc but its a start, and can help fill in on top of Social Security, etc. we pay $7000/mo for a facility for my aunt. So if you take that fee, subtract her social security, pension, etc, a $100/day policy would go a long way to cover the gap..

When you increase the length of potential payments of a policy it gets more and more expensive. So.. if you want to stay less than the tax, with something that might be useful, some small policy with a compound inflation benefit is the way to do that. it isn't going to cover all potential LTC costs and made planning for ltc a non issue, but it is a middle ground between self insuring and buying an expensive/full featured policy, and the cost could be reasonable.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
TheHouse7
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by TheHouse7 »

daave wrote: Thu May 13, 2021 9:52 pm WA DSHS has put together a website, http://www.wacaresfund.wa.gov/private-insurance/, which clarifies:
  • Exemptions are permanent, there's no re-attestation each year that you're still covered
  • To get an exemption, any LTCI plan as defined under RCW 48.83.020 will do
  • You need the coverage by Nov 1 2021 to get an exemption
  • You must apply for the exemption between Oct 1 2021 and Dec 31 2021
My employer offers a group plan which does not require a health exam, and with the minimal possible benefit costs $20/month. Seems I should be able to get this for 1-2 months, and for $20-40 total avoid a 0.58% payroll tax for the long term (which would cost me several thousand $/year). I also got quotes from a local agent which were closer to $40/month (healthy 32 year old male).
Thank you for this being (healthy 34 year old male), I do not have a group plan with my employer.
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.
RoyHobbs9
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by RoyHobbs9 »

"The initial premium rate is fifty-eight hundredths of one percent of the individual's wages. Beginning January 1, 2024, and biennially thereafter, the premium rate shall be set by the pension funding council at a rate no greater than fifty-eight hundredths of one percent." -- RCW 50B.04.080

I know there is a small panel in charge of making sure this remains solvent that is supposed to review it every 2 years. Could that panel recommend to the lawmakers that the tax needs to be increased (every 2 years)? I read somewhere that analysts thought the tax needed to start at .66% so I'm worried that it will increase in the future despite what is in the RCW. What is stopping that from being revised?

Thanks in advance,
Healthy 45 year-old
Last edited by RoyHobbs9 on Wed Jun 09, 2021 1:29 pm, edited 1 time in total.
Topic Author
Soon2BXProgrammer
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Soon2BXProgrammer »

RoyHobbs9 wrote: Wed Jun 09, 2021 1:13 pm "The initial premium rate is fifty-eight hundredths of one percent of the individual's wages. Beginning January 1, 2024, and biennially thereafter, the premium rate shall be set by the pension funding council at a rate no greater than fifty-eight hundredths of one percent." -- RCW 50B.04.080

I know there is a small panel in charge of making sure this remains solvent that is supposed to review it every 2 years. Could that panel recommend to the lawmakers that the tax needs to be increased (every 2 years)? I read somewhere that analysts thought the tax needed to start at .66% so I'm worried that it will increase in the future despite what is in the RCW. What is stopping that from being revised?

Thanks in advance,
Healthy 45 year-old
There is no guarantee what the tax will be in the future to keep the program solvent. If you don't want to pay the tax, the best?? option is to get a small LTCi policy. The largest deciding factor is how large is your income.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
WoW2012
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by WoW2012 »

RoyHobbs9 wrote: Wed Jun 09, 2021 1:13 pm "The initial premium rate is fifty-eight hundredths of one percent of the individual's wages. Beginning January 1, 2024, and biennially thereafter, the premium rate shall be set by the pension funding council at a rate no greater than fifty-eight hundredths of one percent." -- RCW 50B.04.080

I know there is a small panel in charge of making sure this remains solvent that is supposed to review it every 2 years. Could that panel recommend to the lawmakers that the tax needs to be increased (every 2 years)? I read somewhere that analysts thought the tax needed to start at .66% so I'm worried that it will increase in the future despite what is in the RCW. What is stopping that from being revised?

Thanks in advance,
Healthy 45 year-old

Because of the low interest rates caused by COVID, the state's actuary has recommended the "premium" be increased from .58% to .70%.

OR

Pass a law that allows the funds to be invested in equities.

The way the law was first written in 2019, it is more likely that they will lower the benefits or make eligibility stricter, rather than increase the tax.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
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