Key Takeaways
- Washington requires a 10-day free look period for disability insurance policies
- Washington has the WA Cares Fund - a state-run long-term care program funded by payroll tax
- Private LTC policies must offer inflation protection options and nonforfeiture benefits
- Washington Long-Term Care Partnership Program provides Medicaid asset protection
- Producers selling LTC must complete 8 hours of initial training and ongoing CE
Washington Disability and Long-Term Care Insurance
Washington has specific regulations for disability income insurance and long-term care insurance that protect consumers and ensure adequate coverage.
Disability Income Insurance
Free Look Period
Washington requires a 10-day free look period for individual disability insurance:
- Policyholder can return for full premium refund
- Begins when policy is delivered
- Applies to individual policies
Required Policy Provisions
Washington disability policies must include:
| Provision | Requirement |
|---|---|
| Grace Period | Minimum 31 days for annual premium |
| Reinstatement | Must allow reinstatement within 3 years |
| Notice of Claim | 20 days after loss begins |
| Time to Pay Claims | Promptly after proof of loss |
| Legal Actions | No earlier than 60 days after proof of loss |
Cancellation Requirements
For guaranteed renewable policies:
- Written notice before cancellation for nonpayment
- Cannot cancel for health reasons
- Can only cancel for nonpayment or fraud
WA Cares Fund
Washington has implemented the WA Cares Fund - a first-in-nation public long-term care program:
Program Overview
| Feature | Detail |
|---|---|
| Funding | Employee payroll tax (0.58% of wages) |
| Benefit | Up to $36,500 lifetime (adjusted annually) |
| Vesting | 10 years of contributions or 3 of last 6 years |
| Eligibility | Washington workers age 18+ |
| Exemption | Those with qualifying private LTC by deadline |
Private Long-Term Care Insurance
Washington has comprehensive LTC insurance regulations:
Free Look Period
- 30-day free look for LTC policies
- Applies to all individual LTC policies
- Policyholder can return for full refund
Required Provisions
| Provision | Requirement |
|---|---|
| Renewability | Must be guaranteed renewable |
| Pre-existing Conditions | Max 6-month look-back |
| Elimination Period | Must disclose clearly |
| Inflation Protection | Must offer option |
| Nonforfeiture | Must offer option |
Inflation Protection Options
Insurers must offer at least one inflation protection option:
- Compound inflation (3% or 5%)
- Simple inflation
- Consumer Price Index adjustment
- Benefit increase option
Washington Long-Term Care Partnership Program
Washington participates in the Long-Term Care Partnership Program:
How It Works
- Purchase a Partnership-qualified LTC policy
- Use benefits for care
- If benefits exhaust, apply for Medicaid
- Asset protection - Keep assets equal to benefits received
Example
| Without Partnership | With Partnership |
|---|---|
| Spend down to $2,000 | Protect assets up to benefits paid |
| Lose most assets | May keep home and assets |
| Standard Medicaid rules | Enhanced asset protection |
Producer Requirements
To sell LTC insurance in Washington:
- Complete 8 hours of LTC-specific training initially
- Complete LTC training before selling
- Ongoing CE requirements for LTC
- Must maintain current knowledge of WA Cares Fund
What is the WA Cares Fund?
How long is the free look period for long-term care insurance in Washington?
What is the primary benefit of purchasing a Washington Partnership-qualified long-term care policy?