WA Cares Act

[Suudy]

What is the name of your state? Idaho (and Washington, sorta)

Washington (state) passed the Washington Cares Act earlier this summer. This imposes a 0.58% tax on all W2 wages to fund a long term care benefits plan. This plan provides benefits only to WA state residents who are vested. Being an Idaho resident and working in Washington, I am required to pay this tax and have no access to benefits.

I've done some digging and see only one article regarding any possible legal challenges:
https://www.dwt.com/blogs/employment-labor-and-benefits/2021/03/washington-long-term-care-act

I know little about ERISA and I'm curious about someone's analysis on this.

On another note, this seems to me this is essentially an income tax, not a premium. And the WA Constitution requires all taxes be uniform (which this is) and not exceed 1%, but all projections show a $15 billion dollar shortfall. There will need to be an increase, and I don't think even 1% will cover the outlays. The arguments I have heard is that the supporters of this law consider this a premium, so is not subject to the 1% limit in constitution. However, given non-residents cannot access any of the benefits, it cannot be a premium since there is no benefits attached to the consideration for non-residents.

My question is more a request for analysis. Does anyone have any insight into the suitability of this law with respect to ERISA? Or if the rate is increased above 1%?

And finally, if the law is overturned, would there be a required reimbursement of premiums paid out? What if there are benefits paid prior to the law being invalidated?

 

[FlyingRon]

The fact you live in Idaho doesn't seem to matter here.

The question is whether the state is allowed to implement this. That's going to be up to the courts to decide as soon as someone takes up the challenge. Since the funds are indeed going into a trust, I would suspect that they will be refunded if the withholding is found to have been improperly imposed.

 

[Suudy]

Thanks for the reply.

I'm not trying to be argumentative, just talking through things. Being in Idaho is relevant if the defenders of the law try to classify this as a premium, rather than a tax. If I can claim no benefits, it seems to me it is not a premium. It seems to me (the non-lawyer that I am) that being a non-resident is relevant.

Finally, I'm just wondering how to find out if any lawsuits have been filed. I'm not finding any press releases. I tried to get into PACER, but it seems they charge your $0.10 per page to look at filings, and that seems a bit expensive if one is curious and non-specific about the terms of the search. Any tips on how to find out?

 

[Zigner]

Thanks for the reply.

I'm not trying to be argumentative, just talking through things. Being in Idaho is relevant if the defenders of the law try to classify this as a premium, rather than a tax. If I can claim no benefits, it seems to me it is not a premium. It seems to me (the non-lawyer that I am) that being a non-resident is relevant.

Finally, I'm just wondering how to find out if any lawsuits have been filed. I'm not finding any press releases. I tried to get into PACER, but it seems they charge your $0.10 per page to look at filings, and that seems a bit expensive if one is curious and non-specific about the terms of the search. Any tips on how to find out?

If you are concerned about a 10¢ per page fee to look up information, then I am sure that you are not going to fight this. As such, this thread is purely hypothetical.

 

[davew9128]

PACER will waive fees if your quarterly fee total is below a $25 or so.

 

[quincy]

... I tried to get into PACER, but it seems they charge your $0.10 per page to look at filings, and that seems a bit expensive if one is curious and non-specific about the terms of the search. Any tips on how to find out?

The cost of PACER:
https://pacer.uscourts.gov/help/faqs/how-much-does-it-cost-access-documents-using-pacer

Dave, it’s under $30.

 

[davew9128]

The cost of PACER:
https://pacer.uscourts.gov/help/faqs/how-much-does-it-cost-access-documents-using-pacer

Dave, it’s under $30.

Figured it was something like that. I use it several times for various cases clients have had involvement in that I needed to view for tax return purposes and I've never paid a dime.

 

[Taxing Matters]

Finally, I'm just wondering how to find out if any lawsuits have been filed.

You'd have to check with each court in which a case might be filed. PACER gives you access to most federal court filings, but understand that the case could just as easily be filed in state court too. That means a lot of potential courts to check for this. It's way too early for anything significant to be gleaned from a case even if one has been filed. And frankly, I'm not seeing much incentive for any employer to pursue a court challenge of the state long-term care program. They aren't the ones paying the tax — the employees pay it. Might an employee want to pursue that challenge for a tax of what amounts to $580 on $100,000 of salary? Maybe, but I wouldn't hold my breath on that.

 

[Suudy]

If you are concerned about a 10¢ per page fee to look up information, then I am sure that you are not going to fight this. As such, this thread is purely hypothetical.

My concern solely lies in uncertainty. I'm not trained on PACER usage. I'm not interested in forking over $100's for a curiosity search. Were I to file a lawsuit I'd expect a lawyer to be far more capable and could find what was needed.

And yes, this being hypothetical is the point. I'm not looking for legal advice. I was only trying to stimulate some conversation.

 

[Suudy]

You'd have to check with each court in which a case might be filed. PACER gives you access to most federal court filings, but understand that the case could just as easily be filed in state court too. That means a lot of potential courts to check for this. It's way too early for anything significant to be gleaned from a case even if one has been filed. And frankly, I'm not seeing much incentive for any employer to pursue a court challenge of the state long-term care program. They aren't the ones paying the tax — the employees pay it. Might an employee want to pursue that challenge for a tax of what amounts to $580 on $100,000 of salary? Maybe, but I wouldn't hold my breath on that.

I think someone like an NFL or MLB player might be interested. Though they are likely exempt since they have a CBA in place. But perhaps folk like Jeff Bezos might. But then again he might not since he can afford his own LTC and opt out. But if the state yanks the exemptions, he might really care when his yearly "contribution" could be tens of thousands.

For my part I've already purchased a plan and will be filing for the exemption.

 

[LdiJ]

You'd have to check with each court in which a case might be filed. PACER gives you access to most federal court filings, but understand that the case could just as easily be filed in state court too. That means a lot of potential courts to check for this. It's way too early for anything significant to be gleaned from a case even if one has been filed. And frankly, I'm not seeing much incentive for any employer to pursue a court challenge of the state long-term care program. They aren't the ones paying the tax — the employees pay it. Might an employee want to pursue that challenge for a tax of what amounts to $580 on $100,000 of salary? Maybe, but I wouldn't hold my breath on that.

I sincerely agree with this. Mounting a challenge to this law would be expensive, and it would not be cost effective for a single individual to file. You might find a firm willing to take on a class action, but I think that is iffy because there aren't going to be THAT many people in the OP's shoes to make there be enough money in a class action to make it attractive to a firm..

You could lobby some state representatives/senators on the issue, but since the OP is not one of their constitutes they would likely have little interest in pursuing the matter.

All in all, this is likely to be something that an employee in the OP's shoes just needs to accept, on a practical level, or look for another job in his own state..

 

[Zigner]

And yes, this being hypothetical is the point. I'm not looking for legal advice. I was only trying to stimulate some conversation.

You misunderstand the purpose of this forum. Best of luck to you.

 

[FlyingRon]

There's always RECAP (pacer spelled backward) which captures other people's PACER output: https://www.courtlistener.com/recap/

 

[Suudy]

You misunderstand the purpose of this forum. Best of luck to you.

Perhaps. I did not understand the "About" page to be something specific. If this is a forum for specific legal advice, I have erred. Perhaps you or others may have suggestions of forums for generic and hypothetical legal discussion.

 

[Suudy]

There's always RECAP (pacer spelled backward) which captures other people's PACER output: https://www.courtlistener.com/recap/

Thank you for this. This is very interesting and a source of great curiosity.