WA Cares Fund 2026: What's Changed
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The WA Cares Fund—Washington State's first-in-the-nation public long-term care insurance program—continues evolving. For 2026, employers need to understand updated contribution rates, new compliance requirements, and exemption status changes.
This guide covers what Washington employers, especially home care agencies, need to know.
2026 Rate Changes
Current Contribution Rate
As of January 2026, the WA Cares contribution rate remains at 0.58% of gross wages, paid entirely by employees through payroll deduction.
| Rate Component | 2024-2025 | 2026 |
|---|---|---|
| Employee contribution | 0.58% | 0.58% |
| Employer contribution | 0% | 0% |
| Wage cap | None | None |
Note: There is no wage cap on WA Cares contributions. High-earning employees pay on their full wages.
Projected Future Rate Adjustments
The Employment Security Department (ESD) reviews the program's financial sustainability annually. Actuarial projections suggest:
- 2027: Potential increase to 0.65-0.70%
- 2028 and beyond: Further adjustments possible based on claims experience
Employers should plan for potential rate increases in payroll systems.
Employer Obligations
Payroll Withholding
Employers must:
- Withhold contributions from each non-exempt employee's wages
- Remit payments quarterly to the Employment Security Department
- Report contributions via your quarterly tax filing
- Track exemptions and exclude exempt employees from withholding
Filing Deadlines
| Quarter | Pay Period | Filing Due |
|---|---|---|
| Q1 | Jan-Mar | April 30 |
| Q2 | Apr-Jun | July 31 |
| Q3 | Jul-Sep | October 31 |
| Q4 | Oct-Dec | January 31 |
Late filing may result in penalties and interest.
Recordkeeping Requirements
Maintain records for at least 5 years:
- Employee exemption documentation
- Contribution calculations
- Payment remittances
- Employee notifications
Exemption Status Updates
Who Is Exempt
Certain workers are exempt from WA Cares contributions:
Automatically exempt:
- Temporary workers on nonimmigrant visas (H-1B, H-2A, etc.)
- Self-employed individuals not opting in
- Workers in certain collective bargaining agreements (specific conditions apply)
Exempt by application:
- Workers who had qualifying private long-term care insurance as of November 1, 2021
- Military spouses with out-of-state residency
- Veterans with 70%+ service-connected disability
- Non-resident workers working in Washington
2026 Exemption Deadlines
| Exemption Type | Application Deadline |
|---|---|
| Private LTC insurance holders | No new applications (window closed Nov 2021) |
| Veterans disability | Ongoing (apply through ESD) |
| Military spouses | Ongoing (apply through ESD) |
| Non-resident workers | Must reapply if status changes |
Important: Workers who obtained private LTC insurance after November 1, 2021 do NOT qualify for exemption under the original provision.
New Exemption Considerations
The legislature has considered additional exemptions. Check ESD guidance for:
- Near-retirement workers (ages 62+)
- Part-time workers below threshold
- Workers with existing adequate coverage
Current law does not exempt these groups, but proposals are periodically introduced.
Impact on Home Care Agencies
For Your Caregivers
Most caregivers earning W-2 wages in Washington are subject to WA Cares contributions:
- Full-time caregivers: Contributions withheld each pay period
- Part-time caregivers: Same percentage regardless of hours
- Per diem workers: Contributions on all Washington wages
For Your Agency as Employer
Home care agencies have specific considerations:
- High turnover: Frequent onboarding means frequent exemption verification
- Varying wages: Contributions vary with overtime, bonuses
- Multi-state workers: Only Washington wages are subject
- Payroll system updates: Ensure WA Cares line item is accurate
Managing Exemptions
For agencies with many employees, track exemptions carefully:
- During onboarding: Ask about exemption status
- Collect documentation: Exemption approval letter from ESD
- Update payroll: Exclude exempt employees
- Verify annually: Exemption status can change
Benefit Overview
What WA Cares Provides
When fully vested (contributions for 10 years, or 3 of the last 6 years while working 500+ hours annually):
- Lifetime benefit: Up to $36,500 (adjusts with inflation)
- Daily benefit: Up to $100/day
- Qualifying services: Personal care, nursing, home modifications, care coordination
How It Helps Your Clients
Many individuals receiving home care services may eventually qualify for WA Cares benefits. This could mean:
- Additional funding source: Supplement Medicaid or private pay
- More care options: Access to services beyond Medicaid coverage
- Family support: Benefits can help pay family caregivers
Payroll Implementation
Setting Up WA Cares Deductions
If you haven't already:
- Add WA Cares tax line in payroll system
- Set rate: 0.58% of gross wages
- Mark exemptions: Exclude exempt employees
- Test payroll: Verify calculation accuracy
- Review quarterly: Ensure remittance matches withholding
Common Payroll Mistakes
| Mistake | How to Avoid |
|---|---|
| Withholding from exempt employees | Verify exemption documentation before excluding |
| Wrong rate | Confirm 0.58% (no outdated rates) |
| Missing wages | Include overtime, bonuses, all compensation |
| Late filing | Calendar deadlines, automate reminders |
| Incomplete records | Document all exemptions and contributions |
Frequently Asked Questions
Q: Do exempt employees need to provide proof?
A: Yes. Employees claiming exemption should provide their ESD-issued exemption letter. Keep a copy on file.
Q: What if an employee's exemption expires?
A: Most exemptions are permanent, but some (like non-resident status) require reapplication if circumstances change. Begin withholding if exemption lapses.
Q: Do we withhold for workers who live in another state but work in Washington?
A: Generally yes, if they're performing work in Washington. Non-residents can apply for exemption if they work in Washington less than 820 hours per year.
Q: Are independent contractors subject to WA Cares?
A: No. Only W-2 employees have mandatory contributions. Independent contractors can opt in but are not required.
Q: How do employees apply for benefits when needed?
A: Through the Employment Security Department. They'll verify vesting status and determine eligibility.
Staying Compliant
Monthly Checklist
- Verify new employee exemption status
- Confirm payroll is withholding correctly
- Review any employee status changes
Quarterly Checklist
- Reconcile contributions to wages
- File and remit by deadline
- Update exemption records as needed
Annual Checklist
- Review for rate changes
- Update payroll system if rates change
- Communicate changes to employees
- Audit exemption files
Resources
Official Sources
- Employment Security Department: esd.wa.gov/wacares
- Employer portal: For filing and payments
- ESD hotline: For compliance questions
For Home Care Agencies
- Track caregiver contributions as part of payroll
- Include WA Cares in new hire documentation
- Consider benefit in recruitment (it's a Washington-specific benefit)
Looking Ahead
WA Cares is still maturing. Expect:
- Rate adjustments: Based on program experience
- Benefit changes: Potential increases to keep pace with care costs
- Program refinements: Based on initial claims experience (benefits began July 2026)
- Legislative activity: Ongoing proposals for expansion or modification
Home care agencies should monitor WA Cares developments as both employers and as potential service providers who may eventually deliver WA Cares-funded services.
Stay Informed
For updates on Washington policy affecting home care:
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