2022 opened up with Washington employers not knowing whether to begin deducting employee premiums for the new Washington Cares Act or risk having to absorb the premium costs themselves.
Originally, employee premium deductions for this program were set to begin on January 1, 2022. But in the preceding months concerns about the program were raised across the board. In late 2021, Governor Inslee and the leaders of the State Senate and State House announced that they would be moving to postpone the premium collection start date. But as the start date was enacted into law when the statute was passed in 2019, there could be no delay in the premium start date without the legislature amending the statute. And the legislature did not even go into session until after the date employers were to begin collecting the premiums from employees.
Some employers decided to begin collecting the premiums and would refund them if the start date was delayed. Other employers elected to wait and see if the legislature acted to delay the start date.
Ultimately, a bill amending the premium start date was passed by the legislature and signed by the governor, retroactive to the beginning of the year. This bill (HB 1732) had four major components:
- Extended the date to begin collecting premiums from January 1, 2022, to July 1, 2023.
- Employers who had begun collecting the premiums before the bill was passed are required to refund that money to the employee within 120 days of the date they collected the premium.
- Extended the benefits start date from January 1, 2025, to July 1, 2026.
- Allowed individuals born before January 1, 1968, who do not meet the vesting requirements to receive partial payments based on the number of years they worked at least 500 hours and paid the premiums.
So, no premiums to be collected now, and for those employers who did begin deducting the premiums, they need to return the premiums no later than 120 days from the date the deduction was made.
As originally enacted, the Washington Cares Act provided a few exemptions from the program. Self-employed individuals were not required to participate, but could elect to do so within specified time frames. Likewise, individuals who had comparable insurance in place before November 1, 2021, have until December 31, 2022, to apply to be permanently exempt from the program (both premiums and benefits).
Based on the recommendations of the program Trust Commission, the legislature adopted and Governor Inslee signed HB 1733, which created four additional limited exemptions:
- US military veterans who have a service-connected disability of at least 70%.
- A spouse or registered domestic partner of an active duty US service member.
- Individuals working for a Washington employer under a non-immigrant visa for temporary workers.
- An individual working for a Washington employer but with a permanent address and primary residence out of state.
Individuals eligible under one of these four new categories must apply to the Employment Security Department (ESD) for an exemption; it is not automatic. If an individual is exempted under one of the four new exemptions has a change of status and no longer meets the exemption, they must notify the ESD and their employer within 90 days, after which they will be covered by the program and have to pay premiums.
Employees are responsible for applying to the ESD for any of the exemptions. If ESD grants an exemption, the notice will tell the employer when the exemption becomes effective. After the effective date of the exemption, the employer must cease withholding any premiums from the employee’s paycheck.
Many diverse interests have expressed concerns about different aspects of the WA Cares Act program. One reason that the premium start date and benefit start dates were extended by 18 months was to allow interested parties to have sufficient time to propose and consider various different amendments to the program.
While we do not yet know what proposed changes will receive traction or ultimately be enacted, we do anticipate that during the 2023 legislative session, changes will be made to the WA Cares program. Stay tuned!