At Basey Insurance, we believe staying informed about evolving insurance laws — even in other states — is critical to making smart financial decisions.
California is considering landmark long-term care (LTC) legislation that could mirror Washington State’s WA Cares Fund. This proposal would require workers to either carry qualifying private LTC insurance or pay a new payroll tax to help fund a state-run long-term care benefit program.
Why This Matters
While the proposal is still under legislative review, it could:
- Mandate coverage: Employees may need to show proof of a qualifying LTC policy to avoid the tax.
- Set an opt-out deadline: Those who purchase private LTC insurance before a specified cutoff could be exempt.
- Influence other states: Washington led the way in 2021, and California could become the next — paving the path for similar laws nationwide.
If passed in California, this model could quickly gain traction in other states evaluating how to fund long-term care needs for an aging population. Employers and individuals alike should watch these developments closely.
The Latest 2025 Update
The California Long Term Care Insurance Task Force has issued recommendations, including:
- A payroll tax of up to 2% (possibly split between employer and employee)
- A narrow opt-out window for private coverage
- Coverage benefits designed to prevent “LTC insurance gaps”
The full update, including timelines, recommendations, and possible scenarios, is available in this detailed article from BuddyIns, a trusted educational resource for LTC planning:
Read the BuddyIns 2025 Long-Term Care State Payroll Tax Update
Planning Ahead
Even though California’s legislation isn’t yet law, it’s a reminder for all of us to think about:
- Long-term care costs and how to cover them
- The advantages of buying LTC insurance before potential state deadlines
- The impact proposed LTC payroll taxes could have on take-home pay
At Basey Insurance, we help individuals and businesses navigate the complex LTC insurance market so you can make informed, timely decisions — whether your state has passed a mandate yet or not.
📞 Contact us today to discuss how LTC planning fits into your overall financial strategy.
