In 2022, the State of Washington started to require that all residents have long term care and mandated a new payroll tax where people were taxed to pay for their future, state sponsored LTC. The LTC benefits provided by the State of Washington will be very small and not enough to cover any substantial care- only a max of $36,500 annually. The LTC benefits will also not even begin to be paid out until July 2026 at the earliest.
The state did allow residents to be exempt from the tax, provided they purchased their own private LTC coverage from an outside company. However, this exemption meant the demand for LTC was high in Washington, carriers became bogged down, and some even stopped accepting new LTC applications from Washington. All these factors prevented Washington residents from securing the coverage needed to be exempt from the tax.
Now that this program has been approved in Washington, many other states around the country are currently in the process of implementing or discussing a similar mandate. These states include California, Illinois, Michigan, Massachusetts, Pennsylvania, New York, Vermont, New Hampshire, Rhode Island, and more. Clients in these states should be proactive about purchasing LTC to avoid the potential tax mandate and make sure they secure their coverage before the public rush makes the demand at LTC carriers too extreme.
Each state is different so give Wholehan Marketing a call and we can help find a plan that suits your client and state!