Since then — and especially with legislative updates passed in 2025 — the law has changed significantly. New exemption categories have been added, some previous requirements have been lifted, and the program continues to raise questions for business owners and employees alike.
If you’re still holding onto a long-term care policy just to stay exempt or wondering how these changes affect your retirement or your business, here’s what you need to know.
Quick Recap: What Is the WA Cares Fund?
WA Cares is Washington State’s public long-term care program. As of July 1, 2023, most W-2 employees began paying 0.58% of their wages into the fund, with benefits capped at $36,500 (inflation-adjusted) starting in 2026.
In 2021, residents could opt out if they purchased private long-term care insurance before a set deadline. Many did exactly that, often buying minimal policies just to qualify.
What’s Changed Since Then?
- You No Longer Need to Keep Your LTC Policy to Stay Exempt
If you opted out in 2021 using private long-term care insurance, you’re no longer required to keep that policy to maintain your exemption.
This clarification was passed in 2025 (SB 5395). So, if you only purchased a policy to opt out and it no longer fits your long-term plan, you can cancel it — without risking your exemption.
NOTE: Before canceling, consider whether long-term care coverage still fits your broader goals. If it does, there may be more effective strategies available today than when you first opted out.
Related reading:
- Is Long-Term Care Insurance Right for You?
- Hybrid Long-Term Care Insurance – An Upgrade on Traditional Benefits
- Expanded Exemption Categories
Beginning January 1, 2026, more individuals are automatically exempt from WA Cares contributions, including:
- Active-duty military service members
- Spouses or registered domestic partners of active-duty service members
- Workers on non-immigrant visas
- Veterans with a 70% or higher service-connected disability
- People who live out of state but work in Washington
You can check your exemption status and download your official exemption letter here:
WA Cares Exemption Lookup
- Portability Options for Those Moving Out of State
Previously, moving out of Washington meant losing access to the WA Cares benefit — even if you had paid in for years.
Beginning in 2026, workers who relocate out of state can continue paying into the program voluntarily to maintain eligibility for benefits when they’re needed.
Common Questions We’re Hearing
Can I still opt out if I missed the 2021 window?
No. The original opt-out period for private LTC insurance is closed. However, you may now qualify under the expanded exemption categories listed above.
Do I keep my exemption if I cancel my LTC policy?
Yes. Once you’re exempt, you remain exempt — even if you no longer carry the policy you used to qualify.
Is the $36,500 benefit enough to cover care?
For many, no. While it can help, private LTC insurance often provides broader coverage, portability, and flexibility.
What if I own a business?
You must continue to withhold premiums from W-2 employees who aren’t exempt. You’ll also need to track exemptions and stay current with new compliance requirements taking effect in 2026.
What You Should Do Now
- If you opted out and still have your policy, you may want to review whether it still aligns with your goals. You are no longer required to keep it.
- If you’re still in the program, revisit how this fits into your long-term care and retirement strategy.
- If you’re a business owner, ensure your payroll system tracks exemptions properly — especially as the list expands in 2026.
- If you’re unsure, talk to an advisor. These decisions impact more than your paycheck — they shape your ability to protect your wealth and independence.
Let’s Talk About the Bigger Picture
Long-term care planning is just one piece of your overall retirement strategy. Whether you’re evaluating your coverage, managing your business’s compliance, or thinking more broadly about how to protect your future, it’s essential to ensure every part of your plan works together.
At Alterra, we specialize in helping you bring clarity to complexity — aligning your financial decisions with the life you want to lead. Let’s build a plan that helps you enjoy today, provide for your loved ones, and prepare for whatever lies ahead.
Schedule a conversation with our team and take the next step toward a comprehensive plan you can trust.
Josh Whelan
CFP®, CLU®, ChFC®
Partner, Financial Advisor
About the Author
Josh sees his profession as a calling, not just a career. His motive for pursing financial planning was very personal. While working on a degree in marriage and family counseling, Josh’s father was diagnosed with multiple sclerosis. Josh decided then and there to change career paths to help his family prepare for an uncertain financial future. Financial planning became his path to serving others.
The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.
