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

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Jordon
Posts: 6
Joined: Fri Mar 29, 2013 12:29 am
Location: Seattle

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

Post by Jordon »

WoW2012 wrote: Sat May 01, 2021 10:50 am
willthrill81 wrote: Sat May 01, 2021 10:31 am Once the state verifies that I did have a LTC policy in place at the time of the opt out window, I'll drop my LTC policy and remain permanently opted-out.

That loophole is in the process of being closed.
Source? I can't find a lot of information about this whole thing.
User avatar
Silly Wabbit
Posts: 318
Joined: Sat Mar 25, 2017 9:54 pm

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

Post by Silly Wabbit »

I'm getting quotes in the $30-40/month range. Way cheaper than the .58% state rate!

It doesn't make sense to me that one can opt-out for life without maintaining coverage, but whatever.
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

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

Post by WoW2012 »

Silly Wabbit wrote: Sat May 01, 2021 12:01 pm I'm getting quotes in the $30-40/month range. Way cheaper than the .58% state rate!

It doesn't make sense to me that one can opt-out for life without maintaining coverage, but whatever.
You're right.
It doesn't make sense.
That's why that loophole is being closed.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

WoW2012 wrote: Sat May 01, 2021 10:50 am
willthrill81 wrote: Sat May 01, 2021 10:31 am Once the state verifies that I did have a LTC policy in place at the time of the opt out window, I'll drop my LTC policy and remain permanently opted-out.
That loophole is in the process of being closed.
Won't that require a change to the law?
The Sensible Steward
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

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

Post by WoW2012 »

willthrill81 wrote: Sat May 01, 2021 1:15 pm
WoW2012 wrote: Sat May 01, 2021 10:50 am
willthrill81 wrote: Sat May 01, 2021 10:31 am Once the state verifies that I did have a LTC policy in place at the time of the opt out window, I'll drop my LTC policy and remain permanently opted-out.
That loophole is in the process of being closed.
Won't that require a change to the law?
No.
The ESD writes the rules.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
z0r
Posts: 244
Joined: Sat Nov 10, 2012 12:50 am

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

Post by z0r »

I live in oregon and work for a wa company so obviously I want to avoid this thing. can anyone speculate what the mechanics will be? I assume wa will go after our payroll provider (it's one of the larger ones) to do automatic withholding. will I work with my hr and payroll provider to stop the withholding? do I need to file a wa state tax return with proof of coverage?
Topic Author
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

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

Post by Soon2BXProgrammer »

czaj wrote: Sat May 01, 2021 10:06 am Some reasons that self-insuring LTC makes sense to me:
....
- if LTC is necessary, in my mind “LTC” would be your only expense, fully replacing most other expenses. Most Bogleheads will likely have more than in their portfolio and SS to cover this.
While this is mostly true, it doesn't cover things like "family vacation homes" that families might want to pass to the next generation and continue to pay for.

We have such one in our family, and therefore medicaid is never an option, and selling to cover costs is not an option, etc. (its a water front piece of property on the puget sound )
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
prd1982
Posts: 1770
Joined: Sun Jan 08, 2017 3:43 pm

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

Post by prd1982 »

Forgive my observation/question; I'm on the east coast, not affected, but fascinated by this thread.

As I understand this, WA passed a law for universal iLTC that charges upper income earners more than the plan is worth, while charging those at the lower end of income spectrum less than the plan is worth. I'm not commenting on whether that is a good thing to do. But then there was an amendment that allowed the upper income earners to get their own private plan, which would be less costly than the public option and provide at least the same benefits. Do I have this right?

If so, I'm assuming upper income folks will get their own plan, and there will be a lot of advertising by LTC salespeople to make folks aware of it.
Assuming this happens, doesn't this mean that the funding mechanism for this act has been thrown way out of balance? Surely the legislature understands this. So why did they make the change to basically destroy the financials? I just feel I'm missing something.
Isabelle77
Posts: 958
Joined: Thu Dec 17, 2015 12:43 pm

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

Post by Isabelle77 »

prd1982 wrote: Sat May 01, 2021 4:23 pm Forgive my observation/question; I'm on the east coast, not affected, but fascinated by this thread.

As I understand this, WA passed a law for universal iLTC that charges upper income earners more than the plan is worth, while charging those at the lower end of income spectrum less than the plan is worth. I'm not commenting on whether that is a good thing to do. But then there was an amendment that allowed the upper income earners to get their own private plan, which would be less costly than the public option and provide at least the same benefits. Do I have this right?

If so, I'm assuming upper income folks will get their own plan, and there will be a lot of advertising by LTC salespeople to make folks aware of it.
Assuming this happens, doesn't this mean that the funding mechanism for this act has been thrown way out of balance? Surely the legislature understands this. So why did they make the change to basically destroy the financials? I just feel I'm missing something.
It's even worse than that. https://www.kuow.org/stories/wa-voters- ... on-problem

The opt-out period is only until this summer so if you don't have a LTC plan by July (I believe) then you have to pay the tax, so new people to the state, people not paying attention etc will have to pay. The bigger issue may be that Washington isn't allowed to invest the tax dollars they do receive.
Topic Author
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

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

Post by Soon2BXProgrammer »

prd1982 wrote: Sat May 01, 2021 4:23 pm Forgive my observation/question; I'm on the east coast, not affected, but fascinated by this thread.

As I understand this, WA passed a law for universal iLTC that charges upper income earners more than the plan is worth, while charging those at the lower end of income spectrum less than the plan is worth. I'm not commenting on whether that is a good thing to do. But then there was an amendment that allowed the upper income earners to get their own private plan, which would be less costly than the public option and provide at least the same benefits. Do I have this right?

If so, I'm assuming upper income folks will get their own plan, and there will be a lot of advertising by LTC salespeople to make folks aware of it.
Assuming this happens, doesn't this mean that the funding mechanism for this act has been thrown way out of balance? Surely the legislature understands this. So why did they make the change to basically destroy the financials? I just feel I'm missing something.
Mostly right... The Original law provided a one time opt out method for those that already had LTCi... It has like a year or two period. They realized that too many people would opt out.. So in this legislative session they massively shortened the opt out, to help balance the financials.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
Topic Author
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

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

Post by Soon2BXProgrammer »

Isabelle77 wrote: Sat May 01, 2021 5:05 pm The bigger issue may be that Washington isn't allowed to invest the tax dollars they do receive.
This was voted down by the people of the state, but most didn't understand what they had voted on.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
Isabelle77
Posts: 958
Joined: Thu Dec 17, 2015 12:43 pm

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

Post by Isabelle77 »

Soon2BXProgrammer wrote: Sat May 01, 2021 5:06 pm
Isabelle77 wrote: Sat May 01, 2021 5:05 pm The bigger issue may be that Washington isn't allowed to invest the tax dollars they do receive.
This was voted down by the people of the state, but most didn't understand what they had voted on.
Absolutely, and I imagine it will come up again.
downshiftme
Posts: 1142
Joined: Sun Mar 11, 2007 6:11 pm

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

Post by downshiftme »

As I understand this, WA passed a law for universal iLTC that charges upper income earners more than the plan is worth, while charging those at the lower end of income spectrum less than the plan is worth.
It's more complicated than that. Many "participants" will have no hope of ever meeting the qualifications for any benefits. Anyone less than 10 years from retirement will get no benefits. Anyone who moves out of state will get no benefits.

Washington state constitution prohibits an income tax. This is one of the test cases currently being enacted to determine the limits of that prohibition. In this case, the tax is explicitly a wage tax. In the other test case (a capital gains tax on gains above a $250,000 exemption) there are already court cases challenging the tax. In both cases, the politicians in favor or an income tax are looking for alternatives to enact an income based tax. The haphazard way the requirements to opt-in or opt-out of the Long Term Care Trust Act may reflect that the priority was to enact a tax, not to enable a benefit. Long term care benefits are already provided by the federal Medicaid program. These new benefits (if anyone can qualify for them) are quite limited in comparison.
calwatch
Posts: 1431
Joined: Wed Oct 02, 2013 1:48 am

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

Post by calwatch »

I haven't heard much talk about the inverse of opting in, for those who want to go the Barista FIRE route.

Already, many early retirees want to retire in Washington because of its (present) lack of income tax. According to the law, one only needs 500 hours of work per year to opt in, and self-employed people can simply opt in and pay premiums, and there appears to be no minimum premium or hours worked requirement for the self employed. One could, for instance, start a restaurant or store and lose money... does that mean they have opted in for that year without paying premiums? Apparently the Employment Security Department is supposed to come up with rules for this segment. Or is $36,500 not enough money for the average FIRE person to consider paying around a thousand in payroll tax (over the ten year vesting period), and some time working (that one might do anyway), for?
Topic Author
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

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

Post by Soon2BXProgrammer »

downshiftme wrote: Sat May 01, 2021 5:24 pm Long term care benefits are already provided by the federal Medicaid program. These new benefits (if anyone can qualify for them) are quite limited in comparison.
Medicaid is a state-federal joint program. This is a move by the legislature of the state of washington to move some of the burden to the people, and out of the general state funds by setting up a first line of defense. (it was one of the arguments i heard while listening in to the discussions)
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
czaj
Posts: 531
Joined: Sun Oct 04, 2015 4:01 pm

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

Post by czaj »

Soon2BXProgrammer wrote: Sat May 01, 2021 3:54 pm
czaj wrote: Sat May 01, 2021 10:06 am Some reasons that self-insuring LTC makes sense to me:
....
- if LTC is necessary, in my mind “LTC” would be your only expense, fully replacing most other expenses. Most Bogleheads will likely have more than in their portfolio and SS to cover this.
While this is mostly true, it doesn't cover things like "family vacation homes" that families might want to pass to the next generation and continue to pay for.

We have such one in our family, and therefore medicaid is never an option, and selling to cover costs is not an option, etc. (its a water front piece of property on the puget sound )
Definitely a reasonable example to not go the Medicaid option. Honestly, I was not even saying one had to go the Medicaid route. If someone’s already planning to age 100 with their portfolio and any SS/pension/annuity, you would have enough to shift expenses away from “normal” expenses to LTC expenses.
Topic Author
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

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

Post by Soon2BXProgrammer »

czaj wrote: Sat May 01, 2021 7:22 pm
Soon2BXProgrammer wrote: Sat May 01, 2021 3:54 pm
czaj wrote: Sat May 01, 2021 10:06 am Some reasons that self-insuring LTC makes sense to me:
....
- if LTC is necessary, in my mind “LTC” would be your only expense, fully replacing most other expenses. Most Bogleheads will likely have more than in their portfolio and SS to cover this.
While this is mostly true, it doesn't cover things like "family vacation homes" that families might want to pass to the next generation and continue to pay for.

We have such one in our family, and therefore medicaid is never an option, and selling to cover costs is not an option, etc. (its a water front piece of property on the puget sound )
Definitely a reasonable example to not go the Medicaid option. Honestly, I was not even saying one had to go the Medicaid route. If someone’s already planning to age 100 with their portfolio and any SS/pension/annuity, you would have enough to shift expenses away from “normal” expenses to LTC expenses.
I agree, but expenses can be more then one expects. My great aunt has been in a home for almost a decade due to dementia. she is 99 and healthier then an ox. While her portfolio has held up decently well, if she lives long enough she will run out of money. The home she stays in is definately more expensive then her previous independent living.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

Isabelle77 wrote: Sat May 01, 2021 5:05 pm
prd1982 wrote: Sat May 01, 2021 4:23 pm Forgive my observation/question; I'm on the east coast, not affected, but fascinated by this thread.

As I understand this, WA passed a law for universal iLTC that charges upper income earners more than the plan is worth, while charging those at the lower end of income spectrum less than the plan is worth. I'm not commenting on whether that is a good thing to do. But then there was an amendment that allowed the upper income earners to get their own private plan, which would be less costly than the public option and provide at least the same benefits. Do I have this right?

If so, I'm assuming upper income folks will get their own plan, and there will be a lot of advertising by LTC salespeople to make folks aware of it.
Assuming this happens, doesn't this mean that the funding mechanism for this act has been thrown way out of balance? Surely the legislature understands this. So why did they make the change to basically destroy the financials? I just feel I'm missing something.
It's even worse than that. https://www.kuow.org/stories/wa-voters- ... on-problem

The opt-out period is only until this summer so if you don't have a LTC plan by July (I believe) then you have to pay the tax, so new people to the state, people not paying attention etc will have to pay. The bigger issue may be that Washington isn't allowed to invest the tax dollars they do receive.
They have extended the deadline to have a LTCi policy in place for opt out purposes to November. I'm hoping that by mid-summer we'll have a little more clarification on the specifics of the opt out requirements (e.g., policy requirements). Right now, any LTCi plan would likely qualify legally for the opt out.
The Sensible Steward
BruDude
Posts: 4203
Joined: Wed Dec 29, 2010 11:28 pm
Location: Las Vegas

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

Post by BruDude »

Isabelle77 wrote: Thu Apr 29, 2021 11:57 am Scott Olson
Scott@ltcshop.com
Office: 877-727-9582


This is the agent we are using, he's on the west side but nowhere near us. Very reasonable quotes, we wound up choosing a Banker's Life policy that covers exactly what the new WA state plan will. $100 a day up to 365 days.
Scott has been around a long time and is a very knowledgeable dude. Good choice.
nerdymarketer
Posts: 197
Joined: Mon Sep 02, 2013 8:18 pm

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

Post by nerdymarketer »

WoW2012 wrote: Fri Apr 09, 2021 1:58 pm
whatsagoodname wrote: Fri Apr 09, 2021 11:49 am not sure whether this is allowed, please delete if it is not, but WoW2012 can you DM me? I can't DM on my side, yet. Thanks!

I will not DM with anyone on this forum.
No one on this forum is able to email me or send me a private message.
If you have a question for me, post it and I will reply.
@WoW2012 Do you sell LTCi? You've been extremely helpful in this thread and you mentioned clients, so if you are a broker, how do I get in touch with you? I would happily DM you to keep things private.
User avatar
LadyGeek
Site Admin
Posts: 95466
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

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

Post by LadyGeek »

^^^ Please respect WoW2012's wishes. Also see: No Solicitation
Please do not solicit business or website traffic on this forum.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
Topic Author
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

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

Post by Soon2BXProgrammer »

nerdymarketer wrote: Sun May 02, 2021 12:53 am @WoW2012 Do you sell LTCi? You've been extremely helpful in this thread and you mentioned clients, so if you are a broker, how do I get in touch with you? I would happily DM you to keep things private.
I am not going to speak for WoW2012, but i know on the Investment Advice side, there are multiple people on the forums who are "Investment Advisors" under the law, however they choose to participate on a blurry line that if they are anonymous and do not in any way reference their business, then it is less risk for them to participate in the forums. If they break the rules, and turn one forum member into a customer, then in theory all their written correspondence on the forums is subject to retention requirements, and all sorts of other rules such as being available for an audit. (and the written advertisement rules)

I am not sure if it applies to the insurance side of the industry but I assume it does.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
LeftCoastIV
Posts: 1030
Joined: Wed May 01, 2019 7:19 pm

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

Post by LeftCoastIV »

How is this not an income tax, as disallowed by the Washington State constitution?
bryanm
Posts: 424
Joined: Mon Aug 13, 2018 3:48 pm

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

Post by bryanm »

LeftCoastIV wrote: Sun May 02, 2021 10:55 am How is this not an income tax, as disallowed by the Washington State constitution?
The constitution does not ban income taxes. It requires taxes on property to be uniform. Here, I see no question as to constitutionality, because the tax is uniformly applied.

Edit to add relevant portion of WA Constitution (Article VII, Section 1): "All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only."
Topic Author
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

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

Post by Soon2BXProgrammer »

bryanm wrote: Sun May 02, 2021 1:08 pm
LeftCoastIV wrote: Sun May 02, 2021 10:55 am How is this not an income tax, as disallowed by the Washington State constitution?
The constitution does not ban income taxes. It requires taxes on property to be uniform. Here, I see no question as to constitutionality, because the tax is uniformly applied.

Edit to add relevant portion of WA Constitution (Article VII, Section 1): "All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only."
Agreed it is a "flat tax" on income, which is allowed. They made it effectively a progressive tax by making the benefit beneficial to those who pay the least, and regressive to those who pay the most... Therefore the net affect is that its a progressive tax. This is similar to how social security itself is created.
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
User avatar
truenyer
Posts: 406
Joined: Thu Oct 26, 2017 1:39 pm

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

Post by truenyer »

Isabelle77 wrote: Thu Apr 29, 2021 11:57 am Scott Olson
Scott@ltcshop.com
Office: 877-727-9582


This is the agent we are using, he's on the west side but nowhere near us. Very reasonable quotes, we wound up choosing a Banker's Life policy that covers exactly what the new WA state plan will. $100 a day up to 365 days.
Bankers Life certainly had the best rates. But very bad customer reviews. Did you factor that into your decision at all??
Isabelle77
Posts: 958
Joined: Thu Dec 17, 2015 12:43 pm

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

Post by Isabelle77 »

truenyer wrote: Sun May 02, 2021 3:46 pm
Isabelle77 wrote: Thu Apr 29, 2021 11:57 am Scott Olson
Scott@ltcshop.com
Office: 877-727-9582


This is the agent we are using, he's on the west side but nowhere near us. Very reasonable quotes, we wound up choosing a Banker's Life policy that covers exactly what the new WA state plan will. $100 a day up to 365 days.
Bankers Life certainly had the best rates. But very bad customer reviews. Did you factor that into your decision at all??
No, we have no intention of using the policy or holding onto to it longer than necessary. We only plan on living in Washington another 5-10 years. Retirement looks more like Idaho, Utah, or maybe Arizona.
User avatar
truenyer
Posts: 406
Joined: Thu Oct 26, 2017 1:39 pm

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

Post by truenyer »

Isabelle77 wrote: Sun May 02, 2021 4:52 pm
truenyer wrote: Sun May 02, 2021 3:46 pm
Isabelle77 wrote: Thu Apr 29, 2021 11:57 am Scott Olson
Scott@ltcshop.com
Office: 877-727-9582


This is the agent we are using, he's on the west side but nowhere near us. Very reasonable quotes, we wound up choosing a Banker's Life policy that covers exactly what the new WA state plan will. $100 a day up to 365 days.
Bankers Life certainly had the best rates. But very bad customer reviews. Did you factor that into your decision at all??
No, we have no intention of using the policy or holding onto to it longer than necessary. We only plan on living in Washington another 5-10 years. Retirement looks more like Idaho, Utah, or maybe Arizona.
Ok. So you’re in the bucket where you don’t want coverage anyway? Especially nearing retirement?
Isabelle77
Posts: 958
Joined: Thu Dec 17, 2015 12:43 pm

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

Post by Isabelle77 »

truenyer wrote: Sun May 02, 2021 5:34 pm
Isabelle77 wrote: Sun May 02, 2021 4:52 pm
truenyer wrote: Sun May 02, 2021 3:46 pm
Isabelle77 wrote: Thu Apr 29, 2021 11:57 am Scott Olson
Scott@ltcshop.com
Office: 877-727-9582


This is the agent we are using, he's on the west side but nowhere near us. Very reasonable quotes, we wound up choosing a Banker's Life policy that covers exactly what the new WA state plan will. $100 a day up to 365 days.
Bankers Life certainly had the best rates. But very bad customer reviews. Did you factor that into your decision at all??
No, we have no intention of using the policy or holding onto to it longer than necessary. We only plan on living in Washington another 5-10 years. Retirement looks more like Idaho, Utah, or maybe Arizona.
Ok. So you’re in the bucket where you don’t want coverage anyway? Especially nearing retirement?
I'm 44, and likely wouldn't be considering LTC regardless. But definitely not for another 10yrs or so. My husband's job is now remote (I only do some part-time copywriting) so we will consider leaving WA after the kids are out of high school and/or college, depending on if they stay in state. Aim for full retirement at 55-60.
User avatar
truenyer
Posts: 406
Joined: Thu Oct 26, 2017 1:39 pm

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

Post by truenyer »

Isabelle77 wrote: Sun May 02, 2021 6:24 pm
truenyer wrote: Sun May 02, 2021 5:34 pm
Isabelle77 wrote: Sun May 02, 2021 4:52 pm
truenyer wrote: Sun May 02, 2021 3:46 pm
Isabelle77 wrote: Thu Apr 29, 2021 11:57 am Scott Olson
Scott@ltcshop.com
Office: 877-727-9582


This is the agent we are using, he's on the west side but nowhere near us. Very reasonable quotes, we wound up choosing a Banker's Life policy that covers exactly what the new WA state plan will. $100 a day up to 365 days.
Bankers Life certainly had the best rates. But very bad customer reviews. Did you factor that into your decision at all??
No, we have no intention of using the policy or holding onto to it longer than necessary. We only plan on living in Washington another 5-10 years. Retirement looks more like Idaho, Utah, or maybe Arizona.
Ok. So you’re in the bucket where you don’t want coverage anyway? Especially nearing retirement?
I'm 44, and likely wouldn't be considering LTC regardless. But definitely not for another 10yrs or so. My husband's job is now remote (I only do some part-time copywriting) so we will consider leaving WA after the kids are out of high school and/or college, depending on if they stay in state. Aim for full retirement at 55-60.
Gotcha. I looked at how much getting (and keeping) a plan now is for benefits 35 years from now versus buying a new plan when 55. Obviously the premium total paid is less (35 years of premiums versus 16) but the total benefit available is much, much higher assuming inflation coverage (which is cheap at Bankers).

We would have never, ever considered getting LTC in our late30s but now that we’re here we might just get a “real” plan and keep it. The premiums don’t have any impact in our financials.
Kookaburra
Posts: 2045
Joined: Thu Apr 02, 2020 11:14 pm

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

Post by Kookaburra »

Is there an option for employers to pay for this 0.58% payroll tax on behalf of their employees?
User avatar
truenyer
Posts: 406
Joined: Thu Oct 26, 2017 1:39 pm

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

Post by truenyer »

Kookaburra wrote: Sun May 02, 2021 6:59 pm Is there an option for employers to pay for this 0.58% payroll tax on behalf of their employees?
I think so. The law makes it seem like they can if they want.
Kookaburra
Posts: 2045
Joined: Thu Apr 02, 2020 11:14 pm

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

Post by Kookaburra »

I am a WA resident and I want nothing to do with this tax. I also don't want to have a LTC policy at this point in my life. Can I purchase a policy simply to opt-out, and then once opted out just cancel the policy?
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

Kookaburra wrote: Sun May 02, 2021 7:18 pm I am a WA resident and I want nothing to do with this tax. I also don't want to have a LTC policy at this point in my life. Can I purchase a policy simply to opt-out, and then once opted out just cancel the policy?
Right now, it seems so, but WoW2012 has indicated that they will potentially be eliminating that possibility, meaning that you'll either have to pay the tax or carry a qualified LTCi policy.
The Sensible Steward
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

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

Post by WoW2012 »

truenyer wrote: Sun May 02, 2021 3:46 pm
Bankers Life certainly had the best rates. But very bad customer reviews. Did you factor that into your decision at all??

That's very strange. Bankers Life & Casualty pays more LTCi claims than any other company that sells long-term care insurance today.
Can you share a link to the bad reviews?
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
Topic Author
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

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

Post by Soon2BXProgrammer »

WoW2012 wrote: Sun May 02, 2021 8:23 pm
truenyer wrote: Sun May 02, 2021 3:46 pm
Bankers Life certainly had the best rates. But very bad customer reviews. Did you factor that into your decision at all??

That's very strange. Bankers Life & Casualty pays more LTCi claims than any other company that sells long-term care insurance today.
Can you share a link to the bad reviews?
I have an experience with Bankers life. My elderly (70s) father had to deal with them for my Great Aunt (age 99). It was a calamity of issues. We didn't know she had a policy until she had been in a home for 5+ years... So all the paperwork wasn't done at the right time. She only paid her policy for a while, so she had some benefit based on how much she paid in.

according to my father It was a mess trying to get them to approve the claim, but it might have been my father not knowing how to deal with them and getting's all stressed out. They refused to go back in time.. (LESSON: if you have LTC, make sure your future POAs know you have a policy). my father gave up pursuing that.

Now (a year or two later) they have almost paid all the claims she is owed, she only needs to live a few months and she will have exhausted her pile of money, so it isn't that big of a deal that they refused to back pay.

We only found out she had a policy because they sent a letter that their address or phone number was changing. We hadn't heard anything from them in the entire time we have been taking care of my great aunt. (and my Great aunt has no knowledge that she ever had paid for LTCi.. she doesn't know who we are either... so that isn't surprising.)
Last edited by Soon2BXProgrammer on Mon May 03, 2021 7:54 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.
User avatar
truenyer
Posts: 406
Joined: Thu Oct 26, 2017 1:39 pm

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

Post by truenyer »

Soon2BXProgrammer wrote: Sun May 02, 2021 8:32 pm
WoW2012 wrote: Sun May 02, 2021 8:23 pm
truenyer wrote: Sun May 02, 2021 3:46 pm
Bankers Life certainly had the best rates. But very bad customer reviews. Did you factor that into your decision at all??

That's very strange. Bankers Life & Casualty pays more LTCi claims than any other company that sells long-term care insurance today.
Can you share a link to the bad reviews?
I have an experience with Bankers life. My elderly (70s) father had to deal with them for my Great Aunt (age 99). It was a calamity of issues. We didn't know she had a policy until she had been in a home for 5+ years... So all the paperwork wasn't done at the right time. She only paid her policy for a while, so she had some benefit based on how much she paid in.

according to my father It was a mess trying to get them to approve the claim, but it might have been my father not knowing how to deal with them and getting's all stressed out. They refused to go back in time.. (LESSON: if you have LTC, make sure your future POAs know you have a policy). my father gave up pursuing that.

Now (a year or two later) they have almost paid all the claims she is owed, she only needs to live a few months and she will have exhausted her pile of money, so it isn't that big of a deal that they refused to back pay.

We only found out she had a policy because they sent a letter that their address or phone number was changing. We hadn't heard anything from them in the entire time we have been taking care of my great aunt.
https://www.bbb.org/us/il/chicago/profi ... -0654-4222

Obviously that is BBB. And people are going to complain more than praise. But compared to NYL and Mutual of Omaha they have many more complaints.

WoW2012: We still don’t know exactly who you are but what are your thoughts on Bankers Life?
Kookaburra
Posts: 2045
Joined: Thu Apr 02, 2020 11:14 pm

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

Post by Kookaburra »

I would like to opt out of this horsedoody requirement, which means I’ll need to get my own policy. LTCi is a totally new area for me, so I’m hoping for some help. Here are some initial questions I have:

1. Can someone confirm definitively that the deadline to have a personal policy in place has been extended to November?

2. Has there been any update on the minimum coverage needed to qualify for exemption?

3. Naturally I would like to obtain competitive quotes from the various LTCi providers in WA state. Can one good (non-captive) agent do this, or do I need to work with multiple agents to cover my bases?

4. Can anyone provide a referral to one or 2 good LTCi agents in the Seattle area? If so, please DM me with contact details.

5. How long does it typically take to get a policy in place once I apply for one? In other words, in order to meet the November deadline (but not pay for excess months since I really don’t want this policy), when should I apply?

6. If I want to cancel the policy at some point in the future, what do I need to do? Do I need to notify someone? Do I just stop paying premiums? And are there any costs to cancel?

Anything else you think I should be aware of?

Appreciate the help!
Last edited by Kookaburra on Sun May 02, 2021 11:07 pm, edited 1 time in total.
Kookaburra
Posts: 2045
Joined: Thu Apr 02, 2020 11:14 pm

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

Post by Kookaburra »

willthrill81 wrote: Sat May 01, 2021 9:08 pm They have extended the deadline to have a LTCi policy in place for opt out purposes to November. I'm hoping that by mid-summer we'll have a little more clarification on the specifics of the opt out requirements (e.g., policy requirements). Right now, any LTCi plan would likely qualify legally for the opt out.
Where did you confirm the extension to November?

Sounds like you and I are in the same situation, positioning to get the exemption.
WoW2012
Posts: 1455
Joined: Sun Dec 23, 2012 10:28 am

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

Post by WoW2012 »

truenyer wrote: Sun May 02, 2021 9:04 pm
https://www.bbb.org/us/il/chicago/profi ... -0654-4222

Obviously that is BBB. And people are going to complain more than praise. But compared to NYL and Mutual of Omaha they have many more complaints.
I clicked the link you shared and:

1) BBB gives Bankers Life & Casualty an A+ rating. Isn't A+ the highest rating given by BBB?
2) Bankers Life & Casualty has roughly 50,000 long-term care insurance claims every year!
3) Of the 64 "customer reviews", some going back to 2018, only 15 of them had to do with long-term care.
4) 15 complaints about a company that pays 50,000 LTCi claims every year, is that your concern?
5) In 2019,
Bankers Life & Casualty incurred $544 million in LTCi claims,
New York Life incurred $157 million in LTCi claims, and
Mutual of Omaha incurred $161 million in LTCi claims.
If you pay nearly 4x as much in claims it's not surprising to have 4x as many complaints.
Disclaimer: I am a licensed insurance professional and am certified as a long-term care insurance specialist.
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

Kookaburra wrote: Sun May 02, 2021 11:23 pm
willthrill81 wrote: Sat May 01, 2021 9:08 pm They have extended the deadline to have a LTCi policy in place for opt out purposes to November. I'm hoping that by mid-summer we'll have a little more clarification on the specifics of the opt out requirements (e.g., policy requirements). Right now, any LTCi plan would likely qualify legally for the opt out.
Where did you confirm the extension to November?

Sounds like you and I are in the same situation, positioning to get the exemption.
Here.
Update April 16, 2021: Employees now have until November 1, 2021, to purchase long-term care insurance if they wish to opt out of the Washington State Long-Term Care Program. On April 14, 2021, the House passed an amendment to the original Bill (SHB 1323), extending the deadline from July 24, 2021, to November 1, 2021.
https://www.jdsupra.com/legalnews/updat ... s'%20wages.
Kookaburra wrote: Sun May 02, 2021 11:04 pm I would like to opt out of this horsedoody requirement, which means I’ll need to get my own policy. LTCi is a totally new area for me, so I’m hoping for some help. Here are some initial questions I have:

1. Can someone confirm definitively that the deadline to have a personal policy in place has been extended to November?
See above.
Kookaburra wrote: Sun May 02, 2021 11:23 pm 2. Has there been any update on the minimum coverage needed to qualify for exemption?
Not that I'm aware of.
Kookaburra wrote: Sun May 02, 2021 11:23 pm 3. Naturally I would like to obtain competitive quotes from the various LTCi providers in WA state. Can one good (non-captive) agent do this, or do I need to work with multiple agents to cover my bases?
Yes, many agents can sell coverage from a number of different insurers.
Kookaburra wrote: Sun May 02, 2021 11:23 pm 4. Can anyone provide a referral to one or 2 good LTCi agents in the Seattle area? If so, please DM me with contact details.
Done.
Kookaburra wrote: Sun May 02, 2021 11:23 pm 5. How long does it typically take to get a policy in place once I apply for one? In other words, in order to meet the November deadline (but not pay for excess months since I really don’t want this policy), when should I apply?
I've been told by agents that you should apply at least two months before you want coverage to be in place. Given the November deadline, I'm going to apply by late August. I don't want to pay for a month unnecessarily, but the downside risk of potentially not having a policy in place by the deadline is comparatively much larger.
Kookaburra wrote: Sun May 02, 2021 11:23 pm 6. If I want to cancel the policy at some point in the future, what do I need to do? Do I need to notify someone? Do I just stop paying premiums? And are there any costs to cancel?
There are no costs to cancel. Just notify your insurer that you're dropping the policy. As of right now, once WA state verifies that you had a LTCi policy in place at the time of the deadline, which could take several years, you could drop the policy and remain permanently opted-out. However, WoW2012 reports that this is likely to be changed in order to require that you maintain a policy as long as you want to be opted out.
The Sensible Steward
User avatar
truenyer
Posts: 406
Joined: Thu Oct 26, 2017 1:39 pm

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

Post by truenyer »

willthrill81 wrote: Mon May 03, 2021 9:31 am
Kookaburra wrote: Sun May 02, 2021 11:23 pm
willthrill81 wrote: Sat May 01, 2021 9:08 pm They have extended the deadline to have a LTCi policy in place for opt out purposes to November. I'm hoping that by mid-summer we'll have a little more clarification on the specifics of the opt out requirements (e.g., policy requirements). Right now, any LTCi plan would likely qualify legally for the opt out.
Where did you confirm the extension to November?

Sounds like you and I are in the same situation, positioning to get the exemption.
Here.
Also here's the official law that was signed.
http://lawfilesext.leg.wa.gov/biennium/ ... pdf#page=1
milktoast
Posts: 625
Joined: Wed Jul 10, 2019 8:17 pm

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

Post by milktoast »

truenyer wrote: Mon May 03, 2021 9:40 am Also here's the official law that was signed.
http://lawfilesext.leg.wa.gov/biennium/ ... pdf#page=1
Thanks. So Nov 1st is the deadline.

Has anyone been able to purchase a qualifying policy or have a link to somewhere to purchase one? Ideally somewhere that isn't a high pressure sales job.

If there was a cap, I probably wouldn't bother opting out. But this ends up costing me well in excess of the max benefit.
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

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

Post by willthrill81 »

milktoast wrote: Mon May 03, 2021 10:25 am Has anyone been able to purchase a qualifying policy or have a link to somewhere to purchase one? Ideally somewhere that isn't a high pressure sales job.
I just PMed you with some info that might be helpful.
The Sensible Steward
jstorz
Posts: 78
Joined: Fri Sep 04, 2020 5:44 pm

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

Post by jstorz »

willthrill81 wrote: Mon May 03, 2021 10:46 am I just PMed you with some info that might be helpful.
I probably won't act on this until mid-summer, but would you mind doing the same for me? Thanks!
suemarkp
Posts: 1372
Joined: Sun Nov 12, 2017 7:18 pm
Location: Somewhere in WA State

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

Post by suemarkp »

I was in the process of emailing our Union focals as to why they hadn't told us this was coming and how to opt out. We are a highly paid group of engineers. Then i discovered that this bill excludes people covered by a collective bargaining agreement. So not only did SEIU sponsor this, they opted themselves, and most other unions, out of this. It appears that when the union contract is renewed, then how this gets implemented will come up.
Mark | Somewhere in WA State
User avatar
truenyer
Posts: 406
Joined: Thu Oct 26, 2017 1:39 pm

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

Post by truenyer »

suemarkp wrote: Mon May 03, 2021 2:37 pm I was in the process of emailing our Union focals as to why they hadn't told us this was coming and how to opt out. We are a highly paid group of engineers. Then i discovered that this bill excludes people covered by a collective bargaining agreement. So not only did SEIU sponsor this, they opted themselves, and most other unions, out of this. It appears that when the union contract is renewed, then how this gets implemented will come up.
To be fair, the law is two years old and was always meant to start in 2022. When was your contract last ratified? If it was before 2018 you won't be included at this point.

But if you're not included now and you are when your contract is next renewed, you probably won't have the opportunity to opt-out, since the law controls the opt-out period.
Kookaburra
Posts: 2045
Joined: Thu Apr 02, 2020 11:14 pm

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

Post by Kookaburra »

How does this new law and tax work for someone who is currently self-employed, does not have their own iLTC policy, and chooses not to opt-in to the state’s program... but then many years down the road becomes a W-2 employee?

Are they permanently opted out? Permanently opted in when they become a W-2 employee? Have a window of opportunity when they become a W-2 employee to purchase their own policy to opt out?
Topic Author
Soon2BXProgrammer
Posts: 3289
Joined: Mon Nov 24, 2014 10:30 pm

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

Post by Soon2BXProgrammer »

suemarkp wrote: Mon May 03, 2021 2:37 pm I was in the process of emailing our Union focals as to why they hadn't told us this was coming and how to opt out. We are a highly paid group of engineers. Then i discovered that this bill excludes people covered by a collective bargaining agreement. So not only did SEIU sponsor this, they opted themselves, and most other unions, out of this. It appears that when the union contract is renewed, then how this gets implemented will come up.
Can you provide a quote about the exclusion for people covered by a collective bargaining agreement?
Earned 43 (and counting) credit hours of financial planning related education from a regionally accredited university, but I am not your advisor.
Post Reply