WA Cares: Implementation timeline and new employee exemptions

Premium collection begins in July (Q3)

Worker contributions to the WA Cares Fund, the state’s new long-term care insurance program, start this summer. Beginning July 1, 2023, you must collect WA Cares premiums from your employees' wages and report their wages and hours at the end of each quarter—the same way you do now for Paid Leave. Reporting will begin October 2023 and will follow the same payment process as Paid Leave.

As an employer, you won’t pay any share of WA Cares premiums for your employees.

Previously approved exemptions are still valid

Workers who had private long-term care insurance on or before Nov. 1, 2021, were able to apply to ESD for an exemption from the WA Cares Fund until Dec. 31, 2022. Under current law, these exemptions are permanent; employees who have received an approved exemption will not be able to re-enroll in the program.

If your employees previously applied for a private insurance exemption and received an approval letter from ESD, their exemption is still valid. They do not need to re-apply.

You should keep their exemption letters on file. Employees who can’t find their exemption letter can download a copy from the Secure Access Washington account they used to apply for the exemption.

New exemption categories

Beginning Jan. 1, 2023, Washington workers became eligible for exemptions from WA Cares if any of the following apply to them:

• They live outside of Washington.

• They are the spouse or registered domestic partner of an active-duty service member of the U.S. armed forces.

• They have non-immigrant work visas.

• They are veterans with a 70% service-connected disability rating or higher.

Workers will qualify for these exemptions only as long as these circumstances apply. If workers no longer qualify for their exemption, they will be required to notify ESD and their employer within 90 days. Exception: Veterans with a 70% service-connected disability rating or higher will receive a permanent exemption.

Tracking employee exemptions

Some employees may choose to apply for an exemption from WA Cares coverage. It’s their responsibility to apply and—if approved—to notify you and give you a copy of their approval letter from ESD.

Once notified, you must:

• Not deduct WA Cares premiums from employees who’ve provided an ESD exemption approval letter. Note: this letter will list the date on which the employee’s exemption takes effect.

• Keep a copy of your employees’ approval letters on file.

It is the employee’s responsibility to notify you of any changes to their exemption status. Failure to do so can result in required back-payment of premiums and additional penalties.

Paid Leave: Premiums to increase in 2023

Resources for employers

Paid Family & Medical Leave benefits are an increasingly vital source of support for Washington workers. To keep pace with more people using the program, and as required by law, the premium rate increased in 2023.

Starting Jan. 1, 2023:

• The total premium rate is now 0.8%.

• Employers pay 27.24% of the total premium and employees pay
  72.76%.

• Employers will continue to report each employee's total gross wages, not including tips, and collect premiums up to the Social Security cap. Once an employee meets the Social Security cap, employers must stop collecting premiums but continue to report their wages.

• Businesses classified by the Employment Security Department as having fewer than 50 employees are not required to pay the employer portion of the premium. However, they must still collect the employee premium or pay the employees’ premiums on their behalf.

Why the premium rate is changing

Premiums, collected from employees and employers through quarterly reporting, fund the Paid Leave program. By law, we recalculate the Paid Leave premium rate annually in October. The premium rate is adjusted based on contributions from premiums and benefits paid during the previous year.

Important details:

• You can choose to withhold the entire 72.76% from your employee’s paycheck, or you can cover all or some of the premium on your employee’s behalf.

• If you are using a voluntary plan for family or medical leave, your calculations may be different. Visit paidleave.wa.gov/voluntary-plans for more.

• Premium withholdings are capped at the Social Security cap, which is updated annually. It is $160,200 in 2023.