The recent statements released from Governor Inslee, House and Senate Democratic Leadership while attempting to provide relief to employers and constituents have caused a great deal of confusion. It appears from the statements that the WA Cares tax will be delayed until April 1, 2022 at the earliest, but it should be noted that any delay must be approved by the legislature and that the program has not been repealed. It is important to note the specific language provided by Senator Billig:
“In addition to delaying the premium assessment, we also support employers pausing premium collections from employees in Washington so lawmakers can take necessary action. While we cannot direct employers not to collect, we strongly encourage them to pause on collecting premiums from employees, giving us time to pass legislation extending implementation dates until next year.”
Unfortunately the published statements have also raised a number of concerns that have unknown answers at this time; these include whether or not there will be an additional opt-out period, if there will be an impact to the amount of the tax assessment due to the number of opt-outs that have already been filed, or what (if anything) will be changed during the legislative session.
The official statement from December 17th can be found here.
A copy of the draft report that will be provided to the legislature in early January can be found here.
Updated Governor’s statement December 23rd can be found here, cautioning that while he’s ordered the Employment Security Department (ESD) to refrain from collecting premiums the first quarter in anticipation of legislative changes, the state of Washington as an employer is going to withhold the premiums as of January 1st and employers might want to consider doing the same.
While it is impossible for us to predict the trajectory of the changing dynamics of these programs, please reach out to your Benefits team and we will be happy to share any additional information that we have available.
Written by: Kari Justad
IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.
This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.