January 27, 2022

Volume XII, Number 27

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Washington Governor and Legislative Leaders Announce Delay in Long-Term Care Fund

On December 17, 2021, Washington Governor Jay Inslee, Senate Majority Leader Andy Billig, and House Speaker Laurie Jinkins released a joint statement announcing that the premium assessment under the Washington Cares Fund would be delayed. Employers had been set to collect premiums from Washington employees starting on January 1, 2022, but with this announcement, state leaders have “strongly encourage[d]” employers to “pause on collecting premiums.”

Background

In 2021, Washington established a long-term care benefit program for Washington workers called the WA Cares Fund. The program was set to implement a mandatory 0.58 percent payroll deduction on employee wages to create a state trust fund, which, beginning in 2025, would be used to fund certain long-term care costs for eligible Washington workers. Employers were set to begin collecting premiums from employees on January 1, 2022.

Recent Challenges

A citizens’ initiative (I-1436) was introduced on June 29, 2021, which proposed allowing workers the choice to opt in or out of the state’s long-term care insurance scheme, as the law had previously allowed only a one-time opt-out window. Then, on November 9, 2021, a class action lawsuit was filed in the U.S. District Court for the Western District of Washington alleging that the law was preempted by the Employee Retirement Income Security Act (ERISA), was unconstitutional, unlawfully discriminated against employees based on age and residency, and violated other laws. The lawsuit asked the court to enjoin enforcement.

The Latest Announcement

Governor Inslee said in the joint statement that he was ordering the state’s Employment Security Department not to collect premiums from the program until the legislature addresses some of the law’s issues.

What Does This Mean for Employers With Washington Employees?

Employers will not be subject to penalties and interest for not withholding premiums from employees’ wages during the transition period. Senator Billig and Speaker Jinkins said in the joint statement that allowing employers to pause premium collections would give the legislature “time to pass legislation extending implementation dates until next year.” The lawmakers also stated that the legislature would work on developing improvements to the WA Cares Fund in the 2022 legislative term.

Washington is expected to provide additional clarification on the WA Cares Fund through regulations. The legal challenges to the program are expected to continue based on preemption grounds under ERISA.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume XI, Number 352
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About this Author

Adam Pankratz, Ogletree Deakins Law Firm, Labor and Employment Litigation Attorney
Shareholder

Mr. Pankratz represents corporations and management in a myriad of employment-related and complex commercial matters, including litigation involving discrimination, retaliation, harassment, wage and hour, wrongful termination, ADA and FMLA leave issues, and other matters in state and federal courts and administrative agencies. Mr. Pankratz has experience successfully representing employers in executive termination, non-compete and unfair competition disputes.  Mr. Pankratz has extensive experience representing employers both locally and nationally on various employment...

206-693-7053
Kathryn P. Fletcher Attorney Litigation Employment Ogletree Deakins Seattle
Of Counsel

Ms. Fletcher represents employers in all aspects of employment claims and litigation in federal and state courts, at arbitration, mediation, and before administrative agencies, including matters involving wrongful termination, discrimination, sexual harassment, disability and religious accommodation, retaliation, wage and hour, and breach of contract claims. She has successfully defended cases before the United States Court of Appeals for the Ninth Circuit and the Washington State Court of Appeals.

Ms. Fletcher advises employers on personnel...

206-876-5317
Emma A. Healey Attorney Litigation Ogletree Deakins Seattle
Associate

Emma received her undergraduate degree in Business Administration from the University of Washington. She went on to graduate with honors from the University of Washington School of Law. During law school, Emma worked as a law clerk for the Washington State Attorney General’s Office and as a judicial extern at the United States District Court in Seattle, Washington for the Honorable John C. Coughenour. Emma was the Executive Online Editor for the Washington Law Review and served as a Hazelton Research Fellow.

206-693-7051
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