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

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

Post by intendi »

BestCoast123 wrote: Wed Jun 30, 2021 4:53 pm
intendi wrote: Wed Jun 30, 2021 4:04 pm Anyone have further insight on the chances the loophole to cancel after the initial attestation will survive?
It's not a loophole. Exemptions are for life.

http://www.wacaresfund.wa.gov/private-insurance/
That's the way I understand it too but then I read things like this:

"There is nothing currently in the program that prevents you from dropping your individual coverage at some point in the future after opting out of program; however, this loophole and potential lapsing policies is a major concern, so the state may decide to implement an annual certification process in the future."

https://www.coldstream.com/blog/2021/04 ... -care-act/

What a mess.
Arena08
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Arena08 »

Just spoke with my local NY Life agent, and he assured me that they are still offering traditional long term care policies to Washington state residents under the age of 40. He also said he has heard of no intent from the company to discontinue doing so, for what that's worth. I also spoke with Scott Olson mentioned earlier in the thread and he indicated there are very few options for those under the age of 40 in WA in terms of traditional LTC insurance policies. What he is doing for most clients under 40 is now a life insurance based product that has a LTC insurance rider that qualifies for the opt out (must have 2 of the 6 debilitating act of living qualifying factors with monthly benefit and no lump sum payout).

This is a frustrating situation where it seems the state is trying to almost prevent people from realizing the auto opt-in policy, and the insurance companies are working to prevent people from being able to opt out.
Last edited by Arena08 on Thu Jul 01, 2021 12:37 pm, edited 1 time in total.
BruDude
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

Cox3497 wrote: Thu Jul 01, 2021 11:58 am Just spoke with my local NY Life agent, and he assured me that they are still offering traditional long term care policies to Washington state residents under the age of 40. He also said he has heard of no intent from the company to discontinue doing so, for what that's worth. I also spoke with Scott Olsen mentioned earlier in the thread and he indicated there are very few options for those under the age of 40 in WA in terms of traditional LTC insurance policies. What he is doing for most clients under 40 is now a life insurance based product that has a LTC insurance rider that qualifies for the opt out (must have 2 of the 6 debilitating act of living qualifying factors with monthly benefit and no lump sum payout).

This is a frustrating situation where it seems the state is trying to almost prevent people from realizing the auto opt-in policy, and the insurance companies are working to prevent people from being able to opt out.
Scott Olsen is one of the most knowledgeable LTC people in the business, I'd trust whatever he is telling you. The issue for the insurance companies is they know that the people buying these policies are going to have a very high lapse ratio. As soon as they get their exemption, many will terminate coverage. That is very bad for their overall block of business and the numbers they have to report to shareholders. The policies being sold still have the same underwriting and servicing costs as any other LTC policy, but the premiums for under age 40 (and even for 40-50) are dirt cheap with a potentially high lapse ratio. That isn't something they are too interested in, so they are increasing policy requirements. Not a great situation.
Arena08
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Arena08 »

BruDude wrote: Thu Jul 01, 2021 12:15 pm
Cox3497 wrote: Thu Jul 01, 2021 11:58 am Just spoke with my local NY Life agent, and he assured me that they are still offering traditional long term care policies to Washington state residents under the age of 40. He also said he has heard of no intent from the company to discontinue doing so, for what that's worth. I also spoke with Scott Olson mentioned earlier in the thread and he indicated there are very few options for those under the age of 40 in WA in terms of traditional LTC insurance policies. What he is doing for most clients under 40 is now a life insurance based product that has a LTC insurance rider that qualifies for the opt out (must have 2 of the 6 debilitating act of living qualifying factors with monthly benefit and no lump sum payout).

This is a frustrating situation where it seems the state is trying to almost prevent people from realizing the auto opt-in policy, and the insurance companies are working to prevent people from being able to opt out.
Scott Olsen is one of the most knowledgeable LTC people in the business, I'd trust whatever he is telling you. The issue for the insurance companies is they know that the people buying these policies are going to have a very high lapse ratio. As soon as they get their exemption, many will terminate coverage. That is very bad for their overall block of business and the numbers they have to report to shareholders. The policies being sold still have the same underwriting and servicing costs as any other LTC policy, but the premiums for under age 40 (and even for 40-50) are dirt cheap with a potentially high lapse ratio. That isn't something they are too interested in, so they are increasing policy requirements. Not a great situation.
That's exactly how he explained it to me. I'm just a little worried that WA state may come back with a "that's a life insurance policy with LTC rider and doesn't qualify" since it seems like they really aren't acting in all that good of faith to begin with. I'm looking forward to seeing his quote and the quote from NYLife since it seems a lot of forum participants have done business with them as well.
czaj
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by czaj »

I've applied for two policies just in case. Looks like they both use LTCG for the interview; given this, I assume only one interview is necessary between the two applications?
BruDude
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

czaj wrote: Thu Jul 01, 2021 4:46 pm I've applied for two policies just in case. Looks like they both use LTCG for the interview; given this, I assume only one interview is necessary between the two applications?
Doubtful since each company will have their own underwriting questions.
czaj
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by czaj »

BruDude wrote: Thu Jul 01, 2021 6:05 pm
czaj wrote: Thu Jul 01, 2021 4:46 pm I've applied for two policies just in case. Looks like they both use LTCG for the interview; given this, I assume only one interview is necessary between the two applications?
Doubtful since each company will have their own underwriting questions.
Ah, makes sense. Thought it might be standardized. Thanks!
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 »

BruDude wrote: Thu Jul 01, 2021 12:15 pm Scott Olsen is one of the most knowledgeable LTC people in the business, I'd trust whatever he is telling you
Don't trust him blindly, seems like lot of people are contacting him [OT comment removed by admin LadyGeek].
I contacted Olsen for a quote and he was only quoting very expensive policies with all the bell and whistles, I got much cheaper (about 4x less) quotes elsewhere.
BruDude
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

SweetFire wrote: Thu Jul 01, 2021 9:40 pm
BruDude wrote: Thu Jul 01, 2021 12:15 pm Scott Olsen is one of the most knowledgeable LTC people in the business, I'd trust whatever he is telling you
Don't trust him blindly, seems like lot of people are contacting him [OT comment removed by admin LadyGeek].
I contacted Olsen for a quote and he was only quoting very expensive policies with all the bell and whistles, I got much cheaper (about 4x less) quotes elsewhere.
If you just tell him what exactly you want I’m sure he would quote it for you. Not everyone wants a minimum benefit policy. I can’t blame him for not wanting to waste his time with these minimum benefit policies either. It’s going to be a nightmare for agents when the chargebacks hit after people cancel their policies. Lot of work for very little money. LTC doesn’t pay nearly as much in commission percentage as life insurance and the UL/LTC combo policies also pay less than regular ones.
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 »

Most people only want the minimum to opt out.

Scott frames it as he will not sell you anything except this deluxe super expensive policy 'because of liability reasons'. What liability? [OT comment removed by admin LadyGeek]
paradisenostril
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by paradisenostril »

SweetFire wrote: Thu Jul 01, 2021 9:40 pm
BruDude wrote: Thu Jul 01, 2021 12:15 pm Scott Olsen is one of the most knowledgeable LTC people in the business, I'd trust whatever he is telling you
Don't trust him blindly, seems like lot of people are contacting him [OT comment removed by admin LadyGeek].
I contacted Olsen for a quote and he was only quoting very expensive policies with all the bell and whistles, I got much cheaper (about 4x less) quotes elsewhere.
Similar experience. When I checked with a captive agent at the company he gave me a quote from, Olsen's plan cost about 2x more and had very similar coverages.
BruDude
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

SweetFire wrote: Thu Jul 01, 2021 9:59 pm Most people only want the minimum to opt out.

Scott frames it as he will not sell you anything except this deluxe super expensive policy 'because of liability reasons'. What liability? [OT comment removed by admin LadyGeek]
Don’t know what to tell you. I don’t know Scott personally or how he operates his business but he’s been around a long time and knows a whole lot more about LTC than 99% of agents.
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 »

BruDude wrote: Thu Jul 01, 2021 10:06 pm Don’t know what to tell you. I don’t know Scott personally or how he operates his business but he’s been around a long time and knows a whole lot more about LTC than 99% of agents.
Yeah I also saw he has written a book about LTC which has good ratings so he might be knowledgeable, but [OT comment removed by admin LadyGeek] definitely not the right person to buy a policy from.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by LadyGeek »

I removed several off-topic comments. As a reminder, see: General Etiquette
At all times we must conduct ourselves in a respectful manner to other posters.
This includes being respectful to others, not just forum members.
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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 »

SweetFire wrote: Thu Jul 01, 2021 9:59 pm Most people only want the minimum to opt out.

Scott frames it as he will not sell you anything except this deluxe super expensive policy 'because of liability reasons'. What liability? [OT comment removed by admin LadyGeek]
Can you give an example of what you mean by a "deluxe super expensive policy"?
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
mapofuniverse
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by mapofuniverse »

I've gotten a quote from NYLife for cheapest policy:
- $370/yr for me and my wife
- policy max $36,500
- benefit 2 yrs
- facility services $50/day
- home care $25/day
and Nonforfeiture benefit rider that allows you to cancel after 3 years (which we plan to do). Even after cancelling after 3 years, the policy is still there in case WA comes back in 5years and checks whether we have LTC policy (it was explained to me like that). We'll be using this just as a way to opt-out of WA tax.
czaj
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by czaj »

mapofuniverse wrote: Fri Jul 02, 2021 7:39 pm I've gotten a quote from NYLife for cheapest policy:
- $370/yr for me and my wife
- policy max $36,500
- benefit 2 yrs
- facility services $50/day
- home care $25/day
and Nonforfeiture benefit rider that allows you to cancel after 3 years (which we plan to do). Even after cancelling after 3 years, the policy is still there in case WA comes back in 5years and checks whether we have LTC policy (it was explained to me like that). We'll be using this just as a way to opt-out of WA tax.
Interesting. The agent I was working with told me that NYL wouldn’t go lower than $54,750.
Indigo
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Indigo »

SweetFire wrote: Thu Jul 01, 2021 10:09 pm
BruDude wrote: Thu Jul 01, 2021 10:06 pm Don’t know what to tell you. I don’t know Scott personally or how he operates his business but he’s been around a long time and knows a whole lot more about LTC than 99% of agents.
Yeah I also saw he has written a book about LTC which has good ratings so he might be knowledgeable, but [OT comment removed by admin LadyGeek] definitely not the right person to buy a policy from.
I had a different experience and purchased a LTC policy through him for a $50k benefit. My approach might have been different than yours. I will probably keep my policy for at least a couple of years or longer. At least I might get some benefit from it rather than the one the state offers. I’m also open to exploring whether a more “deluxe” policy would be a good idea for my situation. Perhaps agents aren’t so keen to do business with people who will turn around and cancel in a few months.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

Indigo wrote: Sat Jul 03, 2021 10:27 am
SweetFire wrote: Thu Jul 01, 2021 10:09 pm
BruDude wrote: Thu Jul 01, 2021 10:06 pm Don’t know what to tell you. I don’t know Scott personally or how he operates his business but he’s been around a long time and knows a whole lot more about LTC than 99% of agents.
Yeah I also saw he has written a book about LTC which has good ratings so he might be knowledgeable, but [OT comment removed by admin LadyGeek] definitely not the right person to buy a policy from.
I had a different experience and purchased a LTC policy through him for a $50k benefit. My approach might have been different than yours. I will probably keep my policy for at least a couple of years or longer. At least I might get some benefit from it rather than the one the state offers. I’m also open to exploring whether a more “deluxe” policy would be a good idea for my situation. Perhaps agents aren’t so keen to do business with people who will turn around and cancel in a few months.
If the policyholder cancels in the first year the entire commission is charged back and the agent makes $0 so it’s a lot of work for nothing when that happens. Wouldn’t be surprised to hear prolific LTC agents won’t sell minimum benefit policies because of the potential for large amounts of chargebacks. If the agent has too many policies lapse the insurance company can also terminate their contract.
jtower68
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by jtower68 »

Just a word of caution for those looking at the "cheapest" policies. As other commenters pointed out above, these insurers know the flood of applications coming in are only for opt-out purposes, and they may end up declining you if their underwriting expenses are high and they believe you are at risk of canceling the policy after a year, etc.

Just letting you know it's OK to pay a little bit more for a better LTC policy, so that the company has a higher chance of approving your application (since they'll be more inclined to get your premium dollars). IE: NYLife has been indicating Asset Flex having an easier path to approval even though it is more expensive. Pay more up front in order to make sure you permanently keep WA state from adding another line item on your paystub.
johan851
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by johan851 »

jtower68 wrote: Sat Jul 03, 2021 1:47 pm Just a word of caution for those looking at the "cheapest" policies. As other commenters pointed out above, these insurers know the flood of applications coming in are only for opt-out purposes, and they may end up declining you if their underwriting expenses are high and they believe you are at risk of canceling the policy after a year, etc.

Just letting you know it's OK to pay a little bit more for a better LTC policy, so that the company has a higher chance of approving your application (since they'll be more inclined to get your premium dollars). IE: NYLife has been indicating Asset Flex having an easier path to approval even though it is more expensive. Pay more up front in order to make sure you permanently keep WA state from adding another line item on your paystub.
Do you know if it's possible to ask for different coverage limits once the application is submitted? I have an application in process with Genworth, medical screening is done and I'm not sure if it's moved to underwriting yet. My initial application was for a bare bones policy, but as I've seen this play out over the last few weeks it seems like beefing it up is a good idea.
jtower68
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by jtower68 »

johan851 wrote: Sat Jul 03, 2021 4:15 pm
jtower68 wrote: Sat Jul 03, 2021 1:47 pm Just a word of caution for those looking at the "cheapest" policies. As other commenters pointed out above, these insurers know the flood of applications coming in are only for opt-out purposes, and they may end up declining you if their underwriting expenses are high and they believe you are at risk of canceling the policy after a year, etc.

Just letting you know it's OK to pay a little bit more for a better LTC policy, so that the company has a higher chance of approving your application (since they'll be more inclined to get your premium dollars). IE: NYLife has been indicating Asset Flex having an easier path to approval even though it is more expensive. Pay more up front in order to make sure you permanently keep WA state from adding another line item on your paystub.
Do you know if it's possible to ask for different coverage limits once the application is submitted? I have an application in process with Genworth, medical screening is done and I'm not sure if it's moved to underwriting yet. My initial application was for a bare bones policy, but as I've seen this play out over the last few weeks it seems like beefing it up is a good idea.
Yep, you can always modify the policy while the application is in-flight. Keep your insurance company happy to have you as a customer... they hold all the cards. Call them first thing on Tuesday and explore better options. A lot of WA residents who are looking for minimum coverage policies are going to be in for a rude awakening. Not only that, having a better policy increases our odds of getting exemption come October 1st. We don't know if the state will pull a fast one on us later and increase the threshold requirements for granting an opt-out letter.
johan851
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by johan851 »

jtower68 wrote: Sat Jul 03, 2021 4:36 pmYep, you can always modify the policy while the application is in-flight. Keep your insurance company happy to have you as a customer... they hold all the cards. Call them first thing on Tuesday and explore better options. A lot of WA residents who are looking for minimum coverage policies are going to be in for a rude awakening. Not only that, having a better policy increases our odds of getting exemption come October 1st. We don't know if the state will pull a fast one on us later and increase the threshold requirements for granting an opt-out letter.
Awesome, and well put. I'll do that first thing Tuesday.
s7efen
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by s7efen »

I had applied for a policy with newyorklife maybe 2 months ago and am undergoing the interview/underwriting part of the process soon.

i had talked with the rep and I wasn't explicit about plans to cancel- they informed me that I had to hold the policy for at least one year, i don't mind doing that either. i'm just curious if there's a risk I get denied as a result of the underwriting process?

26/male, healthy outside minor sports related injuries, no family history of illness.

if so, would it be worth paying for a slightly stronger plan to discourage them from dropping me on the chance that I cancel my plan?
johan851
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by johan851 »

Does anyone have the latest on the requirements for a qualifying LTC policy? I read what specifics of the law I could find. The only thing I saw spelled out was a requirement for inflation adjustment, either 3% anually or tied to CPI.

Based on that, I updated my policy to...
  • $3,000/mo or $36,000 annually
  • 2 years for total $72,000 benefit
  • 3% inflation adjustment
  • No non-forfeiture coverage
My remaining concern is that the annual benefit of $36,000 falls $500 short of the WA program benefit of $36,500. The total benefit is much higher, however.

My next option up is for $4,500/mo. 50% higher premiums but still a net win for me in terms of the tax. Now that I type it out I should probably just increase the premium to the higher amount, but curious if there's specific guidance.
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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 »

johan851 wrote: Tue Jul 06, 2021 11:52 am Does anyone have the latest on the requirements for a qualifying LTC policy? I read what specifics of the law I could find. The only thing I saw spelled out was a requirement for inflation adjustment, either 3% anually or tied to CPI.

Based on that, I updated my policy to...
  • $3,000/mo or $36,000 annually
  • 2 years for total $72,000 benefit
  • 3% inflation adjustment
  • No non-forfeiture coverage
My remaining concern is that the annual benefit of $36,000 falls $500 short of the WA program benefit of $36,500. The total benefit is much higher, however.

My next option up is for $4,500/mo. 50% higher premiums but still a net win for me in terms of the tax. Now that I type it out I should probably just increase the premium to the higher amount, but curious if there's specific guidance.
There is no specific guidance in the law, the first policy should work as an exemption.

However, the second policy tied with what you might receive in SS, would be a significant help in covering the costs of LTC for two years if you keep the policy. if your planning to keep the policy, i'd think long and hard about what makes sense to buy that is still less then the tax. (of course if your playing the opt out game, then things are different)
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
Isabelle77
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Isabelle77 »

Wanted to update (warn) everyone on our progress in obtaining a policy for my husband with Banker's Life. He first applied in April and still hasn't received final approval. There's nothing holding it up, everything's complete and he doesn't have any health issues or anything that needs to be looked into more closely, there's just a huge backup.

So if you're thinking about getting a policy, I'd probably start the process asap.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

johan851 wrote: Tue Jul 06, 2021 11:52 am Does anyone have the latest on the requirements for a qualifying LTC policy? I read what specifics of the law I could find. The only thing I saw spelled out was a requirement for inflation adjustment, either 3% anually or tied to CPI.

Based on that, I updated my policy to...
  • $3,000/mo or $36,000 annually
  • 2 years for total $72,000 benefit
  • 3% inflation adjustment
  • No non-forfeiture coverage
My remaining concern is that the annual benefit of $36,000 falls $500 short of the WA program benefit of $36,500. The total benefit is much higher, however.

My next option up is for $4,500/mo. 50% higher premiums but still a net win for me in terms of the tax. Now that I type it out I should probably just increase the premium to the higher amount, but curious if there's specific guidance.
Where did you see an inflation adjustment requirement? I have not seen that anywhere and it isn't stated in the definition of LTC insurance on the WA state website. That would prevent any of the life/LTC combo policies from qualifying since they don't have inflation adjustment.
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

Isabelle77 wrote: Tue Jul 06, 2021 1:08 pm Wanted to update (warn) everyone on our progress in obtaining a policy for my husband with Banker's Life. He first applied in April and still hasn't received final approval. There's nothing holding it up, everything's complete and he doesn't have any health issues or anything that needs to be looked into more closely, there's just a huge backup.

So if you're thinking about getting a policy, I'd probably start the process asap.
Normal underwriting time is a couple months. I would expect an additional month or two given the influx of applications. Definitely best to get started ASAP for many reasons, I would not wait until the last minute on this one.
johan851
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by johan851 »

BruDude wrote: Tue Jul 06, 2021 1:39 pm Where did you see an inflation adjustment requirement? I have not seen that anywhere and it isn't stated in the definition of LTC insurance on the WA state website. That would prevent any of the life/LTC combo policies from qualifying since they don't have inflation adjustment.
I think I misread, I saw a set of requirements for the Long-Term Care Partnership Program.
oakleyram
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by oakleyram »

I'm late to this but for the under 40s, any opt-out options I should look into besides NY Life Assetflex? I spent the weekend educating myself on this whole mess and sent in a quote request. Still waiting to hear back after the holiday weekend
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CardinalRule
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by CardinalRule »

A brief piece on the Act on one of the Seattle television stations this week:

Wash. state to start collecting new long-term care tax in January
https://komonews.com/news/local/wash-st ... in-january
Indigo
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Indigo »

My policy says, "This is NOT intended to be a Tax-Qualified Long-Term Care Insurance policy under Section 7702B(b) of the Internal Revenue Code, as enacted by "The Health Insurance Portability and Accountability Act of 1996". Benefits received under this policy may be taxable as income.

Should I be concerned with this phrasing?

The policy is from Bankers Life and is "Long Term Care Insurance" " Facility Care and Home and Community Based Care Benefits"

I read thorough RCW 48.83.020 and it seems to fit even though it's not tax qualified.

"(5) "Long-term care insurance" means an insurance policy, contract, or rider that is advertised, marketed, offered, or designed to provide coverage for at least twelve consecutive months for a covered person. Long-term care insurance may be on an expense incurred, indemnity, prepaid, or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital. Long-term care insurance includes any policy, contract, or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity."

BTW, I really appreciate all the help provided by this forum. Thanks!
johan851
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by johan851 »

I've started a second application as a backup - approval sounds like it's taking a long time, and I'm concerned that if I'm denied coverage I won't have time to line another option up. I had heart surgery shortly after birth to correct an issue, and this has thrown insurers for a loop in the past.

I'm assuming I'm fully within my rights to pass on a policy even after underwriting and everything else. I don't know if this is poor form, a hassle for the agent, etc. Does anyone happen to have experience applying for two policies simultaneously and then turning one of them down?
greenpanda
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by greenpanda »

I want to say thank you to everyone who has posted on this thread, it has been really helpful for me! Just knowing that I should go straight to NY Life saved me a lot of time and hassle. I talked with a NY Life agent today, and as others have mentioned he also said they plan to stop accepting applications for long term care insurance for people under 40 in the middle of July.
Indigo
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Indigo »

johan851 wrote: Wed Jul 07, 2021 11:06 pm I'm assuming I'm fully within my rights to pass on a policy even after underwriting and everything else. I don't know if this is poor form, a hassle for the agent, etc. Does anyone happen to have experience applying for two policies simultaneously and then turning one of them down?
My policy application states that I have 30 days to cancel and get a refund of any premium paid.

I was able to get my application through on the same day I applied. I'm waiting on the final paperwork which I should receive next week. Perhaps it went quickly since I'm in good health.

I've also heard that you can hold more than one policy.
oakleyram
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by oakleyram »

greenpanda wrote: Wed Jul 07, 2021 11:20 pm I want to say thank you to everyone who has posted on this thread, it has been really helpful for me! Just knowing that I should go straight to NY Life saved me a lot of time and hassle. I talked with a NY Life agent today, and as others have mentioned he also said they plan to stop accepting applications for long term care insurance for people under 40 in the middle of July.
How were you able to get in touch with an agent? I sent in a quote request on NY Life website but am still waiting for somebody to contact me
BruDude
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

oakleyram wrote: Thu Jul 08, 2021 11:58 am
greenpanda wrote: Wed Jul 07, 2021 11:20 pm I want to say thank you to everyone who has posted on this thread, it has been really helpful for me! Just knowing that I should go straight to NY Life saved me a lot of time and hassle. I talked with a NY Life agent today, and as others have mentioned he also said they plan to stop accepting applications for long term care insurance for people under 40 in the middle of July.
How were you able to get in touch with an agent? I sent in a quote request on NY Life website but am still waiting for somebody to contact me
Try googling "new york life agent _________" with your city in the blank spot and call one directly.
BruDude
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

Market update - Mutual of Omaha is not selling any new LTC policies in WA until after the tax goes into effect. National Guardian Life is now requiring a minimum premium of $2,000 regardless of chosen benefits. Nightmare.
tj
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by tj »

BruDude wrote: Fri Jul 09, 2021 12:51 pm Market update - Mutual of Omaha is not selling any new LTC policies in WA until after the tax goes into effect. National Guardian Life is now requiring a minimum premium of $2,000 regardless of chosen benefits. Nightmare.
Are you surprised? It sounds like this legislation was very poorly designed - giving people really easy options to dodge the tax. The amount of claw back will be huge.
BruDude
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

tj wrote: Fri Jul 09, 2021 1:33 pm
BruDude wrote: Fri Jul 09, 2021 12:51 pm Market update - Mutual of Omaha is not selling any new LTC policies in WA until after the tax goes into effect. National Guardian Life is now requiring a minimum premium of $2,000 regardless of chosen benefits. Nightmare.
Are you surprised? It sounds like this legislation was very poorly designed - giving people really easy options to dodge the tax. The amount of claw back will be huge.
Not surprised in the least. I mentioned earlier in the thread that anyone on the fence should apply immediately before more of these restrictions are put in place.
BruDude
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

Another product update that people might find useful for those that just want to meet the minimums. Securian Financial (Minnesota Life) has a life insurance/LTC hybrid policy with a $50k minimum benefit. The premium is higher because the policy is paid up in 15 years, but you can get 100% of your premiums back after 15 years or 80% of your premiums back in earlier years if you cancel before year 11.

Example I just ran - 42 year old male, $50k benefit, premium $1528 per year for 15 years. 80% return of premium available after year 1 through year 11, then scales up to 100% after year 15. Securian sent out an email to agents stating that it is their opinion that this policy meets the WA state requirements to qualify as LTC, but does state that they cannot give tax advice and to check with a CPA to be sure (I'm sure the CPA won't give a definitive answer either at this point).
Last edited by BruDude on Fri Jul 09, 2021 8:29 pm, edited 1 time in total.
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 »

tj wrote: Fri Jul 09, 2021 1:33 pm
BruDude wrote: Fri Jul 09, 2021 12:51 pm Market update - Mutual of Omaha is not selling any new LTC policies in WA until after the tax goes into effect. National Guardian Life is now requiring a minimum premium of $2,000 regardless of chosen benefits. Nightmare.
Are you surprised? It sounds like this legislation was very poorly designed - giving people really easy options to dodge the tax. The amount of claw back will be huge.
I wouldn't call it easy, from seeing the lengthy forms you need to fill out. I know people who don't qualify for private LTCI for baffling reasons and will have to pay for a terrible policy that they won't use. I know many people who have no knowledge of this tax and will be unpleasantly surprised in January. The length in this thread, and people scrambling for policies with the few private insurers left and even considering hybrid life insurance policies - on Bogleheads! - says that is far from easy.

I think the Washington State Lottery pays out a higher percentage of income than this state policy ever will.
Arena08
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Arena08 »

Just an update on NY Life. My agent now tells me emails went out this Tuesday indicating traditional LTC insurance policies to the under 40 crowd will cease as of July 16th (in line with some of the earlier posts, but different than what I was initially told). Just wanted to make sure everyone knows that is the deadline to docusign with NY life if you are under the age of 40.
czaj
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by czaj »

Cox3497 wrote: Fri Jul 09, 2021 8:19 pm Just an update on NY Life. My agent now tells me emails went out this Tuesday indicating traditional LTC insurance policies to the under 40 crowd will cease as of July 16th (in line with some of the earlier posts, but different than what I was initially told). Just wanted to make sure everyone knows that is the deadline to docusign with NY life if you are under the age of 40.
I assume this is referring to the application of the policy and not signing on with the policy (since there is no way you could apply, go through underwriting, and approved for coverage by then).
Arena08
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Arena08 »

Yes, basically have signed the application such that it is then sent back to NY Life to underwriting. I don't expect to have the policy delivered for quite some time after that.
oakleyram
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by oakleyram »

I talked to NY Life agent and was also told that last day to apply for traditional LTC for age 30s was July 15th

However, the premium I was quoted for Asset Flex was $700 and cheaper than LTC which was around $1000. Since I don't anticipate keeping the plan longer than a few years and would prefer to pay cheapest premium, I just went with Asset Flex especially since quite a few members here signed up for that one. Also I figure that if the state happens to require annual verification and I am forced to keep it longer than I want, I can get some type of surrender funds back eventually

Now that I'm typing this though, does it seem strange that LTC would be more expensive than Asset Flex? The terms she put in for the policy all seemed pretty standard so didn't seem shady to me
KyleAAA
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by KyleAAA »

It's a really odd program. Apparently you can buy the cheapest policy that qualifies for exemption by the deadline, cancel it after 1 year, and avoid the extra tax for life. You just need a qualifying policy on the specific date. You don't need to maintain it. That was my reading, at least
BruDude
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by BruDude »

KyleAAA wrote: Sat Jul 10, 2021 10:11 pm It's a really odd program. Apparently you can buy the cheapest policy that qualifies for exemption by the deadline, cancel it after 1 year, and avoid the extra tax for life. You just need a qualifying policy on the specific date. You don't need to maintain it. That was my reading, at least
And that is exactly why companies are taking their products off the market, age restricting policies, and requiring higher minimum benefits and premiums. Insurance companies don’t want this business.
Arena08
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Re: Washington State Long Term Care Trust Act - 0.58% payroll tax - $36,500 lifetime maximum benefit

Post by Arena08 »

A quick update for the under 40 crowd. As mentioned in some of my earlier posts, I spoke with NY Life and Scott Olson mentioned on this thread. After speaking with Scott, he indicated he would get back to me the following day with options involving life insurance based policies with qualifying long term care riders. After not hearing back from him for over a week, I again contacted him and he emailed back indicating he no longer intends to work policies for the under 40 crowd. While I understand his preference to work with strictly long term care policies, a timely email indicating such would have been appreciated, especially given the rapidly changing nature of what insurance companies are offering for the under 40 crowd.

So it looks like I'll be putting in for a LTC policy with NY Life. Good luck to all as they seek to avoid this unfortunate situation.
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