Contact: Mark Fefer, Marketing Communications, 206.757.8583 or email@example.com
Nov. 9, 2021 – The law firm of Davis Wright Tremaine LLP today filed a class action lawsuit in federal court against Gov. Jay Inslee and other state officials, asking the court to declare that the WA Cares Act—an Act that requires all employees in the state to purchase insurance from a long-term care trust—violates federal law.
"This Act is extremely unpopular and for good reason," said Richard Birmingham, a partner at Davis Wright Tremaine, who is spearheading the suit. "In addition to placing unfair burdens on both employers and employees, the Act is clearly unlawful. We are urging the court to declare the Act void and unenforceable and, after such declaration, to stop employee contributions to WA Cares."
Filed in federal court for the Western District of Washington, the lawsuit argues, among other things, that the WA Cares Act violates the federal Employee Retirement Income Security Act of 1974, as amended. ERISA forbids the state from passing any law that requires employees to participate in a plan that provides sickness or medical benefits.
"The state simply does not have the power to mandate an employee benefit," said Birmingham, a nationally recognized expert in ERISA litigation.
Named plaintiffs in the suit include three Washington state businesses, representing an employer class, and six individuals, representing an employee class.
None of the named individuals purchased private, long-term care insurance before November 1, 2021—the cut-off to qualify for exemption from this state program—and their wages will be subject to mandatory withholding under WA Cares, effective January 1, 2022.
"It's simply not fair that the state is requiring me to pay premiums on a policy that I will never use," said plaintiff John Edmundson, a project coordinator, who plans to retire within the decade. The Act generally requires an employee to contribute to the Trust for ten years before obtaining benefits. "With this program, the state is actively taking away earnings that could help support me in retirement."
"I do not live in Washington now and likely will not retire there either," said plaintiff Melissa Johnston, who resides in Eagle Point, Oregon, and works as a vice president of human resources in Vancouver, Wash. "And yet the state is requiring that I buy a long-term care insurance product that can only be used if I retire in Washington—it just doesn't make any sense."
The lawsuit contends that the disparate treatment of similarly situated individuals based solely on their status as a Washington resident violates the Equal Protection and the Privileges and Immunities clauses of the U.S. Constitution. The forfeiture of benefits for those who are within ten years of retirement violates the Older Workers Benefit Protection Act. The lawsuit further alleges that WA Cares and its Trust constitute a multiple employer welfare arrangement that is subject to both ERISA and state insurance law. The Act, by its explicit terms, violates both.
"This law has been misconceived from the beginning and does not even accomplish what it purports to achieve," said Birmingham. "The premium charged is clearly not adequate to pay even the limited benefit provided. Employers and taxpayers will be called upon to bail the state out of the deficit created by this Act. I'm pleased to be working to stop this deeply flawed law before it imposes further hardship."
About Davis Wright Tremaine
Davis Wright Tremaine LLP is an AmLaw100 law firm with more than 600 lawyers representing clients based throughout the United States and around the world. For more information, visit www.dwt.com.