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A first-of-its-kind state program that funds long-term care through a mandatory payroll tax is being challenged in federal court. 

A group of employees and workers who oppose the public long-term care insurance program last week filed a lawsuit in the Western District of Washington seeking to stop the initiative, local media reported.

The WA Cares Fund program, which was approved by the state legislature in 2019, requires employees to pay a premium of 0.58% of their total paycheck; funds are used to help pay for nursing care and other long-term care services and supports for those who need it.

The state will begin collecting the payroll tax in January. Benefits will first be available in January 2025. 

Employees had until Nov. 1 to opt out of the program if they could prove they have a private long-term care insurance policy. More than 344,000 applications for exemptions have been received and about 140,000 approved, according to Washington state officials. 

The lawsuit argues that the program violates several federal and state laws, including an employee’s right to benefits after paying into a benefit program, Forbes columnist Howard Gleckman recently explained. 

In order to be eligible for WA Cares Fund benefits, an employee must have worked and contributed to the fund for: a total of 10 years without an interruption of five or more consecutive years; or three of the last six years at the time a person applies, and has worked at least 500 hours per year.

“The law effectively requires workers to make contributions for 10 years before they can become eligible for benefits. It also would pay benefits only to Washington State residents,” Gleckman wrote. 

He added that while the District Court is highly unlikely to block the law before the state begins collecting premiums, another ask by the lawsuit is that the state return funds workers do pay until litigation is resolved, which “could leave the program in a high state of uncertainty for years.” 

“Some of the issues raised by the lawsuit are specific to Washington state. But others, such as the ERISA and federal constitutional issues, would apply to any mandatory state public long-term care insurance program,” Gleckman wrote. “Other states considering their own programs will be watching this case closely.”