Time is running out for long-term care exemption

September 7, 2021

For the past several months, BIAW has been sharing information about the state’s new long-term care tax. But until now, we were pointing people to their personal insurance agent or financial advisor for an alternative long-term care solution.

As previously mentioned, employers must start collecting the new tax from their employees in January 2022—unless employees purchase a different long-term care solution and secure an exemption from the state. Employees will pay this tax for the rest of their working lives and receive only $36,000 in lifetime benefits.

To qualify for the exemption, an employee must purchase a private long-term care solution by Nov. 1, 2021 then apply for and receive an exemption from the state’s Employment Security Department between Oct. 1, 2021 and Dec. 31, 2022. Then they must provide the exemption notice to their employers.

There are significant differences between the state plan and private plans detailed here. Only certain plans are eligible.

Group long-term care solution available

If your employees wish to opt out and they have not secured an alternative long-term care solution now, time is running out. Allstate Workplace and the Kaiser Insurance Agency with Allstate, a member of the Building Industry Association of Whatcom County, are still offering and accepting groups of 10 or more eligible employees. But your paperwork needs to be in by Sept. 15.

This voluntary program offers more choices than the mandatory premium assessment employees will pay in perpetuity unless they receive an exemption. Key benefits include:

• It’s a life insurance policy first and a long-term care benefit second.
• Portability: Meaning employees can take the policy to another employer or state.
• Employees can terminate the policy if needed and still receive some premium back as a refund.
• Immediate vesting.
• Ability to add spouse or domestic partner so they can potentially benefit from the lifetime exemption as well.

The Allstate plan offers age-based premiums that remain the same for the life of the contract as the employee participates. A 20-year-old employee could receive a $75,000 benefit for $30.55 each month for life or a $40,000 benefit for $17.30 a month. Find more details in this comparison document. 

Next steps

The Kaiser Insurance Agency with Allstate is available to help. The only documents needed to secure a spot are the New Customer Agreement Form and the employee worksheet (excel ) with names, birthdates and tobacco use. Reach out to Dennis Kaiser at DENNISKAISER@ALLSTATE.COM by Sept. 15!

If you’re a BIAW member offering a long-term care alternative, please contact BIAW Communications Director Janelle Guthrie to be added to this post.