Washington state passed the nation’s first publicly operated long-term care insurance program in 2019 to help offset assisted living and other costs.
But employment experts say the Long-Term Services and Supports Trust program is a “compliance nightmare for employers, employees and the state.” And questions exist about whether the Employee Retirement Income Security Act of 1974 preempts the state’s ability to regulate this area.
Under the program, those who pay into the system for 10 years and remain in the state can receive up to $100 per day, for a $36,500 total lifetime benefit. A monthly mandatory payroll tax of 58 cents on every $100 in income is scheduled to go into effect in 2022, with benefits first payable in 2025.
All adult workers would contribute to a trust, which will pay for “a comprehensive array of long-term care services and supports,” including assisted living communities, skilled nursing facilities, in-home care and expenses such as meal delivery or construction of wheelchair ramps.
The program won the endorsement of the Washington Health Care Association, LeadingAge Washington, AARP and other organizations.
A blog post from Seattle-based Davis Wright Tremaine LLP, however, says that the Washington long-term care insurance program mandates a benefit that is “arguably preempted by ERISA.” The law firm called the statute “a compliance nightmare for employers, employees, and the state.”
Under ERISA’s definition of benefit plans, long-term care is an ERISA-covered plan and is subject to its rules and regulations, the law firm said. The post recommends that employers that want to challenge the statute consider filing a declaratory action in federal court on the grounds of ERISA preemption.
The Washington Legislature now is considering a substitute bill that would provide a window for limited individual exemptions to the program. House Bill 1323 would provide exemptions for employees who have long-term care insurance.