Home care rates

AN ACT Relating to improving the functioning of home care rate 1
statutes; and amending RCW 74.39A.310 and 74.39A.530.2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:3
Sec. 1. RCW 74.39A.310 and 2020 c 336 s 1 are each amended to 4
read as follows: 5
(1) ((The)) In each odd-numbered year, within 60 days after the 6
adjournment sine die of the legislative session, the department shall 7
((convert and distribute any change in the )) determine a home care 8
agency labor rate by converting and distributing:9
(a) The total amount of wages and benefits negotiated and funded 10
in the contract for individual providers of home care services 11
pursuant to RCW 74.39A.270 and 74.39A.300; or ((labor))12
(b) Labor rates established under RCW 74.39A.530 ((into a per-13
quarter-hour amount. This must be accomplished in each odd-numbered 14
year within sixty days after adjournment sine die of the legislative 15
session)). 16
(2) The ((per-quarter-hour amount shall be added to or subtracted 17
from the statewide home care agency vendor rate and any increase )) 18
home care agency labor rate determined in subsection (1) of this 19
section shall be used exclusively for ((improving)) the wages and 20
benefits of home care agency workers who provide direct care, and for 21
H-2686.1
HOUSE BILL 2276
State of Washington 69th Legislature 2026 Regular Session
By Representatives Rule, Berry, Low, Leavitt, Ryu, Parshley, Scott,
Tharinger, Mena, Nance, Bronoske, Fosse, and Salahuddin
Prefiled 01/06/26. Read first time 01/12/26. Referred to Committee
on Appropriations.
p. 1 HB 2276
paying ((any resulting change in )) required employer contributions or 1
premiums, including but not limited to:2
(a) Wages;3
(b) Benefit pay, such as vacation, sick, and holiday pay;4
(c) Mileage;5
(d) Contributions to a training partnership;6
(e) Contributions to the health benefit trust; and7
(f) Contributions to the defined contribution retirement trust.8
(3) When determining the per-quarter-hour amount, the department 9
must include: 10
(a) The ((changes to wages, benefits, and compensation negotiated 11
and funded each biennium, including but not limited to:12
(i) Wages;13
(ii) Benefit pay, such as vacation, sick, and holiday pay;14
(iii) Mileage;15
(iv) Contributions to a training partnership;16
(v) Contributions to the health benefit trust; and17
(vi) Contributions to the defined contribution retirement trust; 18
and)) total amount of wages and benefits negotiated and funded in the 19
contract for individual providers of home care services pursuant to 20
RCW 74.39A.270 and 74.39A.300 or labor rates established under RCW 21
74.39A.530;22
(b) The ((change in the )) average costs experienced by medicaid 23
contracted home care agencies, as determined by the department in its 24
sole discretion, of employer contributions or premiums required by 25
law including, but not limited to: 26
(i) Federal insurance contributions act; 27
(ii) Federal unemployment tax act; 28
(iii) State unemployment tax authority; 29
(iv) State paid family medical leave act; and 30
(v) State workers' compensation system; and 31
(c) An adjustment, as determined by the department in its sole 32
discretion, for cost of compensation for work time that may not be 33
billed as service hours, such as travel time, that must be paid to 34
direct service workers under wage and hour laws and any related 35
employer tax contributions or premiums. 36
(4) The portion of the ((vendor)) home care agency labor rate 37
calculated for health care benefits, including but not limited to 38
medical, dental, and vision benefits, may only be used for health 39
benefits for home care agency workers who provide direct care.40
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(5) The portions of the home care agency labor rate calculated 1
for training may only be used for training, testing, and 2
certification costs, and associated costs for the administration of 3
training, testing, and certification scheduling and compliance for 4
home care agency workers who provide direct care.5
(6) When establishing the per-quarter-hour amount for the home 6
care agency labor rate , the department must prevent duplicate 7
accounting for the same cost. 8
(7)(a) The department or its designee shall verify that home care 9
agencies have expended funds in accordance with the requirements of 10
this section.11
(b) To assist the department or its designee with the 12
verification requirement in (a) of this subsection, each home care 13
agency shall submit either:14
(i) An independent third-party audit conducted by a qualified, 15
accredited firm to validate compliance with requirements established 16
in this section; or17
(ii) A written attestation from the labor organization that is 18
the exclusive bargaining representative of the home care workers who 19
provide direct care that are employed by the agency, confirming that 20
the home care agency has complied with the labor rate, health care 21
rate, and training rate requirements.22
(c) The department may adopt rules to establish reasonable 23
objective criteria through a transparent process to temporarily 24
exempt a home care agency determined to be facing extraordinary 25
circumstances that prevent their compliance with this section. The 26
department shall develop these criteria through a transparent process 27
that includes public notice and opportunities for comment from 28
interested parties.29
(8) The department shall determine a home care agency 30
administrative rate following the process established in RCW 31
74.39A.530.32
(9) For the purposes of this section, "home care agency 33
administrative rate" means the portion of the home care agency vendor 34
rate, as defined in RCW 74.39A.530, designated to support the 35
administrative functions and essential operations of a home care 36
agency, including but not limited to:37
(a) Compliance with administrative requirements related to 38
department of health licensing provisions and department contracts 39
for personal care and respite services;40
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(b) Payment of all taxes and costs associated with obtaining and 1
maintaining a licensed business in the state of Washington, as well 2
as compliance with all labor and industry, local, state, and federal 3
standards and laws;4
(c) Business and occupation tax on any increases to the labor 5
rate;6
(d) Funding for electronic visit verification; and7
(e) Funding for personal protective equipment.8
Sec. 2. RCW 74.39A.530 and 2021 c 186 s 2 are each amended to 9
read as follows: 10
If the department contracts with a consumer directed employer:11
(1) ((In addition to overtime and compensable travel time set 12
forth in RCW 74.39A.525, the initial labor rates shall be paid as 13
described in the most recent collective bargaining agreement between 14
the governor and the service employees international union 775, plus 15
the hourly roll-up costs of any additional legally required benefits 16
or labor costs, until subsequent rates can be established in 17
accordance with this section.18
(2))) A rate-setting board is established which is comprised of 19
the voting members and nonvoting members to evaluate and propose 20
changes in the rates paid to the consumer directed employer.21
(a) The following members shall be voting members:22
(i) One representative from the governor's office;23
(ii) One representative from the department; 24
(iii) One representative from each consumer directed employer; 25
and 26
(iv) One designee from the exclusive bargaining representative of 27
individual providers or, in the absence of an exclusive bargaining 28
representative, a designee from the consumer directed employer 29
workforce chosen by the employees of the consumer directed employer.30
(b) The following nine members of the board shall be nonvoting 31
advisory members: 32
(i) Four legislators, one member from each caucus of the house of 33
representatives and the senate; 34
(ii) One representative from the state council on aging, 35
appointed by the governor; 36
(iii) One representative of an organization representing people 37
with intellectual or developmental disabilities appointed by the 38
governor; 39
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(iv) One representative of an organization representing people 1
with physical disabilities appointed by the governor;2
(v) One representative from the licensed home care agency 3
industry chosen by the state's largest association of home care 4
agencies that primarily serves state-funded clients; and5
(vi) One home care worker chosen by the state's largest 6
organization of home care workers. 7
(c) The governor's appointments shall be made by April 1st in 8
even-numbered years. The incumbent member of the board shall serve 9
until their replacement is appointed.10
(((3))) (2) When the board membership has four voting members 11
listed in subsection (((2))) (1)(a) of this section, each voting 12
member shall have one vote. When there are five voting members due to 13
two consumer directed employer representatives, each voting member 14
listed in subsection (((2))) (1)(a) of this section shall have two 15
votes with the exception of the consumer directed employer 16
representatives who shall have one vote. Voting members cannot split 17
their votes. A majority of the voting members of the board 18
constitutes a quorum for the transaction of business and is necessary 19
for any action taken by the board. 20
(((4))) (3) Beginning in the year following the establishment of 21
the initial rate ((under subsection (1) of this section )), and in 22
every even-numbered year thereafter, the rate-setting board shall 23
attempt to determine a proposed labor rate, including a specific 24
amount for health and training benefits by considering the factors 25
listed in RCW 41.56.530 (1) and (5). In addition, the rate-setting 26
board shall attempt to determine an administrative rate for the 27
consumer directed employer. In determining the consumer directed 28
employer administrative rate, the department may not recommend a rate 29
that represents more than 20 percent of the sum of the consumer 30
directed employer labor rate and the consumer directed employer 31
administrative rate.32
In addition, the rate-setting board ((may take testimony and make 33
a recommendation regarding the administrative vendor rate for home 34
care agencies that serve medicaid clients )) shall review the 35
department's projection of the home care agency labor rate in RCW 36
74.39A.310. The rate-setting board shall take testimony and shall 37
attempt to determine a home care agency administrative rate. In 38
determining the home care agency administrative rate, the rate-39
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setting board may not recommend a rate that represents more than 20 1
percent of the home care agency vendor rate. 2
(((5))) (4) The department shall provide administrative support 3
for the board. 4
(a) At the commencement of the board's rate-setting activities, 5
the voting members must first attempt to select an additional voting 6
member, who will chair the rate-setting board and will cast a tie-7
breaking vote if the voting members identified in subsection (((2))) 8
(1) of this section are unable to pass by majority vote on the labor 9
rate. 10
(b) On the first occasion that the voting members identified in 11
subsection (((2))) (1)(a) of this section fail to select a tie-12
breaking member by a majority vote, the chair member will be selected 13
as follows: 14
(i) The voting member representing the governor's office shall 15
request a list of five qualified arbitrators, or six if there are two 16
consumer directed employers, from the federal mediation and 17
conciliation service. 18
(ii) If a majority of the voting members of the board cannot 19
agree on the selection of a neutral arbitrator from the list, the 20
representative from the consumer directed employer who first 21
contacted the department will strike a name from the list first. The 22
representative from the governor's office shall then strike a name 23
from the list, the designee from the exclusive bargaining 24
representative or, in the absence of an exclusive bargaining 25
representative, the designee from the consumer directed employer 26
workforce shall strike a name from the list, if there are two 27
consumer directed employers, the second representative will strike a 28
name from the list, and finally the representative from the 29
department shall strike a name from the list. 30
(iii) The name of the arbitrator remaining after the final strike 31
shall be the chair member of the board. 32
(iv) If that person is not willing or available to be the chair 33
member, the second to last person remaining on the list shall be 34
asked to be the chair member. If the second to last person is not 35
willing or available, the third to last person shall be asked to be 36
the chair member. This process of selecting an arbitrator shall be 37
continued until a chair member of the board is appointed.38
(c) On the next occasion that the voting members identified in 39
subsection (((2))) (1)(a) of this section fail to select a chair 40
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member by a majority vote, the chair member will be selected using 1
the method described in (b) of this subsection except that the order 2
of board members striking names from the list, described in (b)(ii) 3
of this subsection, shall be reversed. 4
(d) On each successive occasion that the voting members 5
identified in subsection (((2))) (1)(a) of this section fail to 6
select a chair member by a majority vote, the order of voting members 7
striking names from the list will continue to alternate between the 8
order described in (b)(ii) and (c) of this subsection.9
(((6))) (5)(a) If an agreement on a proposed labor rate ((, an 10
administrative rate, or both, )) is not reached by a majority of the 11
voting members of the rate-setting board prior to ((July)) August 12
1st, then((:13
(a) The)) the labor rate shall be determined by a majority of the 14
voting members of the rate-setting board, including the vote of the 15
chair member, who was selected in accordance with subsections (((2))) 16
(1) and (((5))) (4)(a) of this section((; and)). If an agreement over 17
the labor rate is not reached prior to September 1st, then the labor 18
rate shall be determined by the sole vote of the chair member, who 19
was selected in accordance with subsections (1) and (4)(a) of this 20
section.21
(b) ((The administrative rate shall be determined by the 22
department.23
(7))) If an agreement on a proposed administrative rate for the 24
consumer directed employer or a home care agency administrative rate, 25
or both, is not reached by a majority of the voting members of the 26
rate-setting board prior to August 1st, then the administrative rate 27
for the consumer directed employer or the home care agency 28
administrative rate, or both, shall be determined by the department. 29
In determining the home care agency administrative rate, the 30
department may not recommend a rate that represents more than 20 31
percent of the home care agency vendor rate. In determining the 32
consumer directed employer administrative rate, the department may 33
not recommend a rate that represents more than 20 percent of the sum 34
of the consumer directed employer labor rate and the consumer 35
directed employer administrative rate.36
(6) After the rates have been determined in accordance with 37
subsections (((3))) (2) through (((6))) (5) of this section, they 38
shall be submitted to the director of the office of financial 39
management by October 1st prior to the legislative session during 40
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which the requests are to be considered for review. If the director 1
of the office of financial management certifies them as being 2
feasible financially for the state, the governor shall include a 3
request for funds necessary to implement the proposed rates as part 4
of the governor's budget document submitted under RCW 43.88.030 and 5
43.88.060. The legislature shall approve or reject the request for 6
funds as a whole. 7
(((8))) (7) If the legislature rejects the request under 8
subsection (((6))) (5) of this section, the matter shall return to 9
the rate-setting board established under this section for further 10
consideration. Until the legislature approves a request for funds 11
under this section, the current labor rate shall stay in effect.12
(((9))) (8) The labor rate approved by the legislature shall be 13
an hourly rate paid to the consumer directed employer. The labor rate 14
shall be used exclusively for paying the wages, associated taxes, and 15
benefits of individual providers. The consumer directed employer 16
shall have full discretion to set wages and benefits for individual 17
providers, except as provided in: (a) Subsections (9) and (10) of 18
this section; (b) any specific legislative appropriation requirement; 19
or (c) a collective bargaining agreement, if applicable.20
(((10))) (9) The labor rate shall include a specific hourly 21
amount that the consumer directed employer may use only for health 22
benefits for individual providers. 23
(((11) The department shall make a one-time transfer of funds 24
totaling the full amount of previously unclaimed paid time off to the 25
consumer directed employer, and shall transfer all associated 26
liabilities for payment of unclaimed paid time off to the consumer 27
directed employer. This amount shall be accounted for as a labor rate 28
payment.29
(12))) (10) The labor rate shall include a specific hourly amount 30
that the consumer directed employer may only use for training, 31
testing, and certification costs, and associated costs for the 32
administration of training, testing, and certification scheduling and 33
compliance for individual providers.34
(11) The department shall have the authority to modify the labor 35
rate and the administrative rate between the rate-setting board's 36
rate-setting activities without convening the rate-setting board or 37
following the preceding rate-setting process, subject to the 38
following conditions: 39
(a) The department finds the changes to the rates necessary to:40
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(i) Recognize changes to the department's required expenditures 1
or the consumer directed employer's required costs associated with 2
changes to tax rates, required employer contributions, mileage rate 3
allowances, and utilization of overtime to comply with RCW 4
74.39A.525; or 5
(ii) Comply with a significant change in state or federal rule or 6
law that would impact the consumer directed employer's ability to 7
operate; 8
(b) Changes to the rates shall not exceed two percent of the 9
combined labor and administrative rates; and 10
(c) Any increase to the rates is contingent on appropriation of 11
adequate funds by the legislature. 12
(((13))) (12) For the purpose of this section:13
(a) "Labor rate" is defined as that portion of the consumer 14
directed employer's hourly rate that is to be used by the consumer 15
directed employer to compensate its workers, including wages, 16
benefits, and any associated taxes. 17
(b) "Administrative rate" is defined as that portion of the 18
consumer directed employer's hourly rate that is to be used by the 19
consumer directed employer to perform its administrative duties 20
including losses for bad debt, compensation for business and 21
occupation taxes on the labor and administrative rates, and all other 22
costs associated with operating as the consumer directed employer. 23
Funds related to personal protective equipment for individual 24
providers must be considered part of the administrative rate.25
(c) "Home care agency administrative rate" has the same meaning 26
as in RCW 74.39A.310.27
(d) "Home care agency vendor rate" is defined as the sum of the 28
home care agency labor rate and the home care agency administrative 29
rate.30
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