Lawsuit Filed Against Washington’s New Long Term Care Tax

A new federal lawsuit seeks to block the WA Cares Fund payroll tax from going into effect.

A group of businesses and people filed the suit Tuesday to stop the mandatory tax on most workers in Washington that would fund a long-term care program.

The lawsuit was submitted in federal court for the Western District of Washington in Seattle.

Opponents of the program say it breaks numerous laws and doesn't provide enough coverage for meaningful long-term care.

Supporters say it'll act as a safety net for people who will need benefits the state can't afford to pay for.

People are allowed to opt out of the program, but were required to have their own long term care insurance by November 1.

It'll be possible to file for an exemption from the law until the end of next year, December 31, 2022.

The program does not apply to federal employees, offers tribes a choice on whether to participate and doesn't automatically enroll self-employed people.

It requires most workers to pay .58% of their gross salary into a trust fund, which translates to 58-cents for every $100 earned. A person making $50,000 would pay about $290 a year into their account.

The fund will provide a maximum of $36,500, for people to use on housing, in-home care, and home renovations related to long term care such as wheel chair ramps.

The tax starts on January 1, but funds cannot be used until 2025.

The plan cannot be used by people who later move out of state.

It also cannot be used by people who work in Washington, but live across the border in another state like Oregon or Idaho, which is a major objection of the lawsuit.

All six of the individual people who are plaintiffs in the lawsuit will not be eligible for the benefits because they either live out of state, plan to retire out of state or plan to retire before they've paid enough into the savings account to draw benefits.

The lawsuit claims the WA Cares program violates numerous federal laws, including the Equal Protection Clause of the Fourteenth Amendment, the Right to Travel, and Privileges and Immunities Clause as well as the Older Workers Benefit Protection Act.

The lawsuit also claims the new law is preempted and subject to provisions in the Employee Retirement Income Security Act of 1974.

There are three businesses who are plaintiffs in the suit - Pacific Bells, LLC, BrunswikSt., LLC, and WOW Distributing, Inc.

Governor Jay Inslee is named as a defendant, as are the Washington Employment Security Department and the Washington Department of Social and Health Services.