Washington Sued Over Long-Term Care Law

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Posted by Drew Carlson on Thursday, December 2nd, 2021, 11:19 AM PERMALINK

Washington recently passed a new law mandating that workers sign up with the state’s long-term care program, the WA Cares Fund, and pay a payroll tax to finance it. This will be the nation’s first long-term care law. However, some are alleging that this law is not only burdensome but illegal.  

On November 9, opponents of the law filed a class-action lawsuit to stop the payroll tax from taking effect this January. The lawsuit alleges that the long-term care law violates the Employee Retirement Income Security Act (ERISA) and federal protections for older workers. 

The law imposes a .58% payroll tax to pay for the WA Cares Fund in exchange for a benefits program where, starting in 2025, workers who have trouble with at least three “activities of daily living” can receive funds for care such as installing wheelchair ramps, rides to the doctor, and in-home care. The program comes with a lifetime cap of $36,500, though the government can adjust this based on inflation.  

To access these funds, a worker must have paid into the program for a total of ten years with at least five being uninterrupted, or three of the previous six years. The program also requires recipients to reside within Washington to receive the benefits. The only way someone can opt-out of the program is if they had a long-term care plan already in place by November 1st. 

According to the suit, the restrictions on who can access the funds run afoul of ERISA, a federal law mandating specific standards for most retirement and health plans in the private sector. ERISA has a nonforfeiture rule which prevents workers from being denied benefits from a program they paid into.  

This is a problem for the long-term care law since Idaho or Oregon residents who work in Washington must pay the tax but cannot access the benefits. Washington residents who paid into the program but retired to another state are similarly barred. The suit claims that these restrictions violate the nonforfeiture rule since these workers paid for the benefit but cannot use it. 

The lawsuit also accuses the WA Cares Fund of age discrimination since older workers won’t be eligible for the benefits if they’re within ten years of retirement. Not only does this mean the law fails to help the sort of people it was written for, but the lawsuit claims it also violates the Older Workers Benefit Protection Act.  

Finally, the lawsuit claims that the treatment of Idaho and Oregon workers violates the Equal Protection Clause of the Constitution since they are being treated disparately compared to their fellow workers. The district attorney of Idaho held similar views, issuing a cease-and-desist order to Jay Inslee concerning the tax against Idaho residents.  

The order declares, “The Program is discriminatory and unconstitutional as to Idaho residents who work in Washington. To avoid legal action, please ensure that Washington refrains from implementing or enforcing the program against Idaho residents.” 

The WA Cares Fund is yet another poorly conceived government welfare program. It claims to want to help people, whether they like it or not but then bars them from the same benefits it promised while taking their money. It is a poor law being used as a pretext for yet another tax. 

Photo Credit: “Washington State Capitol” by Steve Voght is licensed under CC BY-SA 2.0.

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