Will You Plan Your Long Term Care Or Let Washington State Do It For You?

Long Term Care Insurance According to WA

Long Term Care Insurance According to WA

We already know that almost 70% of people are expected to need long-term care services at some point during their lives. People are hurt and disabled in car accidents and other situations all the time so long term care isn't necessarily for just when we get old. 

Waiting until you need care to buy coverage is not an option. You won’t qualify for long-term care insurance if you already have a debilitating condition. 

So our state is initially doing us a favor by helping us save for our long term care. However, there are definite pros and cons to their new payroll deduction law called HB1087 that you should be aware of.

Beginning January 1, 2022, HB1087 takes effect.

If you are a Washington State W-2 employee, a .58% pay roll tax for mandatory long term care insurance takes effect unless you are granted an exception to “opt out”. That means you need a better policy in force prior to applying for the “opt-out.” 

Our Concerns About HB1087

Our Concerns About HB1087

◦The policy is limited to $100 a day for 1 year, with a $36,500 maximum payout. In 2020 Fidelity announced that the average 65-year-old couple would spend $295,000 to pay for medical expenses throughout retirement so this amount is a drop in the bucket. See our Long Term Care Calculator to see the current and projected costs of care needed in your future.

◦Long term care benefits are only available to employees in the state of Washington and are not transferable. 

◦Higher paid employees still pay .58% with no ceiling, yet the benefit is capped at $36,500.

◦Must pay three of the past six years or ten years without a break of five or more years to get any benefit. Long term investment to get a small amount of benefit.

◦Residents that move out of state for longer than 5 years will forfeit benefits and premiums. So if you move out of state, you can't take it with you and all your investment will be lost.

◦Qualification for benefits is more strict than most private Long Term Care policies.

WHY WOULD ANYONE ENROLL IN HB1087?

WHY WOULD ANYONE ENROLL IN HB1087?

There may be reasons why you should go ahead and not opt out:

  • It is mandatory and automatic for all W-2 employees unless you have an approved alternative policy in force.
  • They haven’t compared or shopped and don’t realize what they are purchasing.
  • Procrastination, “I can do it later.”
  • They have health concerns and can’t qualify for good rates (all the more reason to compare)
  • They are too old: (HB1087 can’t discount by age or health)
  • You miss the deadline of October 31, 2021 to get your own private plan.

How Can I Better My Future And Opt Out?

Our first priority is helping you take care of yourself and your family. Let us help you develop your alternative plan not only because of the deadline but you may not qualify later as your health may restrict you in the future and prices will most likely increase.

WHAT COUNTS FOR YOU TO BE ABLE TO OPT OUT OF THE HB1087 PAYROLL TAX?

Stand-alone Long Term Care Policies, and most hybrid policies. (Life Insurance and LTC together)

Your private plan needs to be in place by October 31, 2021 to count for the “Opt Out!” SPECIAL UPDATE: Some insurance companies now have a deadline for applying by August 31, 2021!

Your BEST “OPT OUT” WINDOW: October 1, 2021 to December 31st, 2021 

Consider hybrid Life/Long Term Care policies that qualify, so that if you die before or during a long term care claim, tax free dollars are paid to your family or estate.

Book an appointment at your convenience now below or fill out the form below and let us show you the options that make the most sense to you and your family!

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