UPDATED 1/27/21: For the reminder of state fiscal year 2022, the WAPAL assessment rate is reduced to $0.07 (from $0.13) per covered life per month.
Washington state requires health insurance carriers, self-funded multiple employer welfare arrangements (MEWAs), and employers that provide health care to Washington residents through a self-insured or level funded plan to report and pay a quarterly fee (i.e., assessment) to fund the Washington state Partnership Access Lines (PAL) Program. The first assessment is due November 15, 2021 for the third quarter of 2021.
Compliance Snapshot
- Employers that provide coverage to Washington residents through a self-insured or level funded plan will be required to pay a quarterly WAPAL assessment;
- The initial WAPAL assessment rate is $0.13 per covered life (i.e., Washington resident) under the plan (for state fiscal year 2022, the WAPAL assessment rate was reduced to $0.07);
- Within 45 days after the end of each calendar quarter, employers must report the number of covered lives under the plan for the quarter through WAPAL Fund Online Assessment System and pay the assessment.
Background
The Washington state Partnership Access Lines (PAL) Program consists of 4 programs that support providers who are caring for patients with mental health and/or substance use disorders and connects individuals with mental health services in their community.
In 2020, Washington State legislature passed House Bill 2728, which directed the Washington State Health Care Authority (HCA) to collect an assessment to fund parts of the PAL Program (“WAPAL Fund”). The assessment applies to health insurance carriers, self-funded multiple employer welfare arrangements (MEWAs), and employers that provide health care to Washington residents through a self-insured or level funded plan. HCA has contracted with KidsVax, who will act as the third-party administrator responsible for calculating and collecting WAPFL assessments.
Frequently Asked Questions
Who does the assessment apply to?
The assessment applies to “assessed entities,” which include:
- Health insurance carriers;
- Self-insured MEWAs; and
- Employers (including out-of-state employers) that sponsor self-insured or level-funded plans that provide healthcare coverage to Washington residents.
Carriers will be responsible for paying the assessment for fully insured plans, whereas employers will be responsible for paying the assessment for self-insured and level funded plans.
How much is the assessment?
The assessment is based on the number of “covered lives” under a major medical plan during each calendar quarter. Covered lives include active employees, their covered dependents, COBRA qualified beneficiaries, and retirees who are also Washington residents.
The WAPAL Fund sets an assessment for each covered life based on cost of administering the WAPAL Program. On September 30, 2021, the WAPAL Fund set the initial assessment rate to $0.13 per covered life, per month. The initial $0.13 rate will be effective for payments due on November 15, 2021. For the assessment rate for state fiscal year 2022 is $0.07. The assessment rate may later be changed on an annual basis.
Quarterly WAPAL Assessment = Assessment Rate x Number of Covered Lives During the Quarter
The WAPFL assessment only applies to major medical plans and does not apply to dental-only or vision-only plans. This means that employers with only self-insured dental and/or vision stand-alone plans (with fully insured medical plans) that provide coverage to Washington residents will not be subject to the assessment.
What are the reporting requirements?
Employers will be required to submit quarterly reports on the number of covered lives they had under their plans during the quarter. Employers must report the number of covered lives for 3 age bands:
- Child covered lives: Washington residents ages 0-18
- Adult Band 1: Washington residents ages 19-64
- Adult Band 2: Washington residents ages 65 and above
The reporting will involve a total of 9 numbers: the covered lives total for each of the three age bands for each of the three months. The assessment rate is the same for all age bands.
What if an employer has zero covered lives?
According to the WAPAL FAQs and KidsVax, employers must still complete quarterly reporting, even if they have zero lives during a quarter (the employer would file a normal quarterly report with “0” values).
If an employer anticipates having 0 covered lives during the year, they should file an Annual Zero Covered Lives Report. If an employer later provides coverage to WA residents, they should begin filing for each quarter it has covered lives.
If an employer anticipates to never have covered lives, they may file a Permanent Zero Covered Lives Report. If an employer later provides coverage to WA employees, they should contact support@WAPALfund.org so their status can be changed and they can begin reporting regularly, starting with the first quarter in which it has covered lives.
How do employers complete the reporting and pay the assessment?
Employers must complete the reporting through the WAPAL Fund Online Assessment System. After entering the number of covered lives on the quarterly report, the online tool will automatically calculate the assessment due and produce an invoice. Employers will then be required to pay the invoice via mail or ACH.
For more information about how to complete reporting, see the Official Resources for Payers.
When is the reporting and assessment due?
Employers were required complete initial registration and submit a baseline-setting report on the number of covered lives they had during Q2 of 2021 (with no assessment due) by August 30, 2021. There is no penalty for failing to file the first baseline report, though employers should submit the report when they have a chance.
The first report with an actual assessment/fee is due by November 15, 2021 for the Q3 of 2021 (the period from July 1 to September 30, 2021).
Thereafter, reporting and payment of the assessments are due within 45 days after the end of each quarter:
| Calendar Quarter | Deadline |
| Q1 (January – March) | May 15th |
| Q2 (April – June) | August 15th |
| Q3 (July – September) | November 15th |
| Q4 (October – December) | February 15th |
Payment is due upon receipt of the invoice (which will be produced when an employer submits their reporting); however, employers will have a 30-day grace period to deliver payment.
What if an employer fails to submit the reporting/payments or submits reporting/payments late?
The WAPAL Fund webpage emphasizes the need for voluntary compliance and encourages employers to report as soon as possible. If KidsVax in cannot make arrangements with an employer to comply with reporting and assessment payments, KidsVax will periodically report non-compliance to the HCA and/or the Office of Insurance Commissioner, which will follow up as they deem appropriate. Under the WAPFL Fund statute, the HCA has the authority to assess an interest charge for late payments and civil penalty for non-payment.
Potential Federal Preemption: A question remains whether the WAPFL Fund assessment on level funded and self-insured plans is preempted by the Employee Retirement Income Security Act (ERISA). Self-insured or level funded employers may consider challenging the assessment based on the doctrine of preemption, though it is unclear what the outcome of any challenge would be.
Employer Action Items
Employers that provide coverage to Washington residents through a self-insured or level funded plan should reach out to their third-party administrator (TPA) to determine whether they will assist with the WAPFL registration, reporting, and/or payment requirements.
If a TPA is unwilling to assist, employers must do the following:
- Register with the WAPAL Fund Online Assessment System (this guide provides step-by-step instructions on how to set up an account);
- File a covered lives report through the WAPAL Fund Online Assessment System by November 15, 2021;
- Pay the quarterly assessment (employers will receive an invoice for the quarterly assessment after submitting their covered lives report); and
- Each quarter thereafter, submit a covered lives report and pay the WAPAL Fund assessment within 45 days after the end of each quarter.
Additional Resources
- KidsVax Contact Information: Support@WAPALfund.org or 1(855)543-7829
- 2022 WAPAL Fund Monthly Assessment Rate Notice
- WAPAL Fund Online Assessment Tool
- Official Website WAPAL Fund
- WAPAL: Employer Resources
- WAPAL Fund Statute
Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2022 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved
