What Is the WA Cares Fund?

The Short Version

The WA Cares Fund is a mandatory, publicly-administered long-term care insurance program for Washington State workers. Since January 1, 2022, most W-2 employees working in Washington have had 0.58% of their gross wages automatically withheld to fund it. In exchange, workers who meet vesting requirements become eligible for a lifetime benefit — currently set at a base of $36,500 — to help cover long-term care costs later in life.

It is the first program of its kind in the United States. No other state has implemented a mandatory public long-term care insurance fund.

Legislative History

The program was created by the Washington State Legislature through the Long-Term Services and Supports Trust Act, signed into law in 2019. The impetus was a policy gap that had been building for decades: long-term care — nursing homes, in-home aides, assisted living — is extraordinarily expensive and almost never covered by standard health insurance or Medicare.

Medicaid does cover long-term care costs, but only after a patient has spent down most of their personal assets. The WA Cares Fund was designed to give middle-income workers a meaningful safety net that wouldn't require financial ruin as a prerequisite.

Collection of the payroll tax was originally set to begin in January 2022. However, after the opt-out window in late 2021 triggered a large surge of exemption applications — many workers rushed to purchase private long-term care insurance to permanently opt out — the Legislature briefly delayed implementation before reinstating the program with some amendments in 2023.

Who Is Covered?

The program covers most W-2 wage earners working in Washington State. Specifically, you are subject to the payroll tax if:

• You are employed by a Washington State employer
• Your wages are reportable to Washington State
• You have not received a permanent exemption from the Employment Security Department (ESD)

Self-employed individuals, sole proprietors, and independent contractors are not automatically enrolled but may opt in voluntarily. Federal employees and tribal government employees are generally excluded. Workers who received a permanent exemption during the 2021 opt-out window are permanently exempt and cannot re-enroll.

What Does the Tax Rate Look Like in Practice?

The current rate is 0.58% of gross wages with no income cap. This is a meaningful distinction from programs like Social Security, which has an annual earnings ceiling above which no additional tax is collected. WA Cares collects on every dollar you earn.

For a Washington worker earning $80,000 per year, the annual premium is $464. For someone earning $200,000, it's $1,160 per year. The benefit they would eventually be eligible for is the same: the base $36,500 (inflation-adjusted). This structure means higher earners contribute significantly more while receiving an identical maximum benefit — a gap our ROI calculator is designed to make visible.

What Does the Benefit Actually Cover?

The WA Cares Fund benefit is paid as a daily dollar allotment — currently equivalent to roughly $100/day — toward approved long-term care services. These include:

• In-home care — personal care aides, homemaker services, skilled nursing visits
• Adult day programs — daytime supervision and care outside the home
• Residential care — assisted living facilities and memory care units
• Nursing home care — skilled nursing facility stays
• Equipment and modifications — home modifications, adaptive equipment, assistive technology
• Transportation — rides to medical and care appointments
• Caregiver training and support — training for family members providing unpaid care

To access benefits, a participant must demonstrate a need for assistance with at least three Activities of Daily Living (ADLs) — things like bathing, dressing, eating, or transferring — or have a cognitive impairment such as dementia that requires supervision.

Importantly, the $36,500 base benefit is a lifetime cap, not an annual benefit. At $100/day, the full benefit would cover approximately one year of continuous care. This is intentionally positioned as a supplemental benefit — a bridge — rather than a comprehensive long-term care solution.

How Does WA Cares Compare to Private Long-Term Care Insurance?

Private long-term care insurance policies vary widely, but many offer higher benefit caps, longer benefit periods, and more flexibility in benefit structure. However, they come with significant drawbacks: premiums can be expensive, they are medically underwritten (meaning health problems can disqualify you), and the private LTC insurance market has contracted sharply as insurers have found the product unprofitable.

WA Cares, by contrast, is guaranteed-issue — no one can be denied based on health status — and premiums are a flat percentage of wages rather than a fixed dollar amount. Workers who would struggle to afford or qualify for private coverage have access to a baseline benefit they otherwise wouldn't.

The trade-off is that the benefit is capped and the same for everyone regardless of how much they contribute. Workers with high incomes who pay significantly more into the fund over a career receive the same maximum payout as a lower-income worker.

Why Does This Matter to You?

Long-term care is one of the most financially devastating expenses a family can face. The average annual cost of a private nursing home room in Washington State exceeds $120,000. The average duration of a long-term care need is roughly three years, though people with dementia or severe disabilities often require care for much longer.

Most families don't plan for this. Medicare doesn't cover custodial care. Health insurance doesn't cover it. And the out-of-pocket costs can rapidly consume retirement savings. WA Cares represents a mandatory, collective answer to this problem — with all the advantages and disadvantages that come with any mandatory public program.

Whether the program represents a good financial deal for you specifically depends heavily on your salary, your career length, your health, and when you might need care. That's exactly the question our ROI calculator is designed to help you think through.