HB 1025
In CommitteeHouse
LTSS trust exemptions
Reopening the exemption from the long-term services and supports trust program for employees who have purchased long-term care insurance.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill reopens the exemption process for the LTSS trust program to employees who purchased long-term care insurance before November 1, 2027, allowing them to avoid paying the state’s long-term care premium. It sets strict deadlines and responsibilities for applicants, employers, and the state to ensure proper administration of exemptions.
- Allows employees who purchased long-term care insurance before November 1, 2027, to apply for an exemption from the state's LTSS trust premium.
- Exemption applications are only accepted between October 1, 2021, and December 31, 2028.
- Employees must be at least 18 years old to apply for an exemption.
- Approved exemptions take effect on the first day of the quarter after approval.
- Exempt employees must notify all current and future employers of their exemption status; employers must stop deducting premiums upon notification.
- Employees who fail to notify employers, or employers who deduct premiums after notification, face financial responsibility for refunds—no refunds are available from the state for premiums already deducted and remitted.
Who is affected
- Employees with qualifying long-term care insurance — Employees who purchased long-term care insurance before November 1, 2027, and wish to avoid paying the state's long-term services and supports (LTSS) trust premium.
- Employers — Employers who must stop deducting premiums once notified of an employee's exemption and may be responsible for refunding incorrectly deducted premiums.
- Employment Security Department — The Employment Security Department, which administers the exemption application process and must adopt rules to implement the program.
Pro/Con Analysis
Stronger case for concerns
Potential Benefits (2)
Employees who already purchased qualifying long-term care insurance before November 1, 2027, can avoid paying the state premium — preserving income for households that invested in private coverage in good faith and may have been caught off-guard by the state program’s implementation.
FinancialPeopleRef: Sec. 1(1), (2)(a), (6)The requirement for employers to retain written exemption notifications creates a paper trail that may reduce disputes and improve administrative transparency — though this benefit is modest and only materializes if employers have systems to comply.
Local GovernmentPeopleRef: Sec. 1(8)(a)
Potential Concerns (5)
The bill permanently bars exempt employees from accessing LTSS benefits, even if they later develop a disability or need long-term care — meaning those who opted out based on private insurance may be left without coverage if their policy lapses, becomes inadequate, or doesn’t cover their needs. This creates a hard-to-reverse financial risk for individuals who may not fully understand the permanence of the choice.
FinancialPeopleRef: Sec. 1(1), (5), (7), (8)(c)Employers bear full financial liability for incorrectly deducting premiums after an employee provides notice of exemption — including retroactive refunds — without any state reimbursement. This creates a disincentive for small employers (who lack HR infrastructure) to participate in the program and may lead to inconsistent enforcement across employers, disproportionately burdening low- and middle-income workers at small businesses.
FinancialPeopleRef: Sec. 1(8)(b), (c)The narrow 7-year application window (Oct. 2021–Dec. 2028) and delayed effective date (July 1, 2025) may cause confusion and missed deadlines, especially for vulnerable populations (e.g., older workers, people with disabilities, non-English speakers), increasing the risk of unintended noncompliance or loss of coverage.
Public SafetyLean peopleRef: Sec. 1(2)(a), (4)The bill shifts the burden of compliance entirely onto employees: they must track and notify all current and future employers, and errors (even unintentional) result in no refund — while employers face no penalty for failing to verify exemption status. This asymmetry erodes procedural fairness and leaves individuals exposed to financial loss due to administrative complexity.
Rights & LibertiesPeopleRef: Sec. 1(3), (5), (7), (8)(c)By requiring individuals to purchase private long-term care insurance *before* November 1, 2027 — a deadline that may not align with open enrollment cycles or personal readiness — the bill pressures people into rushed decisions, potentially locking them into policies that are overpriced, inadequate, or unsuitable for their health needs.
HealthcarePeopleRef: Sec. 1(1), (2)(a)
Who Is Most Affected
Employees who purchased private long-term care insurance before Nov. 1, 2027, and are actively employed, are the primary beneficiaries — they can avoid the state premium and retain their private coverage. However, they face significant risk if their private policy lapses, becomes unaffordable, or fails to cover future needs — and they have no recourse to state benefits.
Employers — especially small businesses without dedicated HR — face new administrative burdens and financial liability for premium refunds if they fail to properly process exemption notices. Larger employers may absorb these costs more easily, while smaller ones may avoid participating or pass costs to employees.
The Employment Security Department gains new administrative responsibilities (processing applications, adopting rules, handling appeals) without additional funding, potentially straining existing resources. However, the bill does not expand its statutory authority beyond administrative implementation.
People with disabilities or chronic health conditions who rely on long-term services and supports may be indirectly harmed if the exemption pool shrinks the risk pool for the LTSS program (though this bill only affects a subset of employees), and more critically, if individuals opt out and later lose coverage.
Private long-term care insurers may benefit from the deadline-driven surge in sales, but the bill does not regulate product standards — so consumers may end up with underinsured or overpriced policies that don’t meet their long-term needs.