Achieving a Better Life Experience (ABLE). Agenda Federal ABLE Act Federal ABLE proposed regs State ABLE Implementation.

Achieving a Better Life Experience (ABLE)

Agenda

• Federal ABLE Act• Federal ABLE proposed regs• State ABLE Implementation

ABLE: The Long Road to Passage

• Idea from parents around a kitchen table in Northern Virginia

• Eight long years of advocacy efforts

Massive cross-disability grassroots campaign led to passagehttps://www.youtube.com/watch?v=31uJaLNN6wA

Power of the online petition….

The ABLE Act is LawThe Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act– became law on December 19, 2014 (Public Law 113-

295)– creates a new option for some people with disabilities

and their families to save for the future, while protecting eligibility for public benefits.

What is an ABLE Account?• ABLE accounts:

– Are established in the new Section 529A Qualified ABLE Programs– Are qualified savings accounts that receive preferred federal tax

treatment– Enable eligible individuals to save for disability related expenses– Are NOT yet available, and there are still some unknowns

• Funds in the ABLE Account are disregarded when establishing or maintaining eligibility for federal means-tested programs. – The only exception relates to Social Security benefits which are temporally

suspended when the account exceeds $100,000.

Who is eligible to be an ABLE account beneficiary?

To be eligible, individuals must meet two requirements:1) Age requirement: must be disabled before age 262) Severity of disability:

• Have been determined to meet the disability requirements for Supplemental Security Income (SSI) or Social Security disability benefits (Title XVI or Title II of the Social Security Act),

OR• Submit a “disability certification”, including a physician’s

diagnosis, that the individual meets criteria to be further established in regulations (essentially equal to Social Security level of disability).

What are some important requirements of ABLE accounts?

• Each eligible individual may have only one ABLE account. • “Designated beneficiary” is the account owner. • Account must be established in the designated beneficiary’s state

of residence, or in a contracting state.• Total annual contributions may not exceed the federal gift tax limit,

which is currently $14,000.• Multiple individuals may make contributions to the one ABLE

account.• Aggregate contributions may not exceed the state limit for 529

savings accounts.

Only 1 Account

per Person

Account must be in state of residence

How may funds from an ABLE account be used?

Distributions from an ABLE account may be made for qualified disability expenses, related to the individual’s disability or blindness and made for his/her benefit, including:

– Education– Housing– Transportation– Employment training and support– Assistive technology and personal support services– Health, prevention, and wellness– Financial management and administrative services– Legal fees– Expenses for oversight and monitoring– Funeral and burial expenses– Any other expenses approved by the Secretary of the Treasury under regulations consistent with the

purpose of the program

Expenditures for non-qualified expenditures will be penalized (tax and potential SSI penalties).

Treatment of ABLE assets

Account (up to $100,000) does not count towards establishing or maintaining eligibility for federal means-tested programs, e.g., Medicaid and SSIIndividuals can accumulate more than $2,000 in assets!Many state bills extend this to state and local means-tested

programs.Tax-exempt withdrawalsTax deduction for contributions in some states

$2000 CAP ON ASSETS

Proposed Dept. of Treasury Federal ABLE Regulations

• Draft regs released on 6/22/15; 90 days to comment• Mixed bag – some positive regulations and some pose

concerns. • Who may establish an ABLE account– Account owner = beneficiary– If beneficiary can’t establish on her own, then may be established

by parent, guardian, or agent under power of attorneyMore restrictive than expected (e.g., grandparent could not

establish an account in beneficiary’s name)

Brief summary of proposed regs (cont’d)

• Eligible individual determination– Responsibility for verifying eligibility status is on the program

administrator• Program must specify the documentation needed to establish eligibility and

maintain eligibilityConfusion about the level of diligence necessary for state to verify

statusStates must set rules for recertification, including a sliding scale for

frequency of recertification based on type of impairment and possibility of a cure

Brief summary of proposed regs (cont’d)

• Residency requirement– Beneficiary must be resident of state or contracting stateNo guidance about how to prove residency or “contracting state”Positive: if beneficiary moves to a different state, can keep ABLE

account from former state• Definition of Qualified disability expenses

Positive: very broadly interpreted as “basic living expenses” and not limited to “medical necessity”

Brief summary of proposed regs (cont’d)

• State role in monitoring qualified disability expenses– Program must establish safeguards to distinguish between

qualified and unqualified expenses, and housing expensesMay be difficult for programs to trace particular distributions to

particular expenses• Reporting requirements– Monthly reports to include type of qualified disability expensesReporting requirements may be challenging

State ABLE Bills• Bills that have passed (28):

– Already signed into law: AL, AR, CO, CT, DE, FL, KS, LA, MA, MD, MN, MT, ND, NE, NV, TN, TX, VA, WV, UT, VT, WA

– Passed legislature and waiting for Governor to sign: HI, IA, IL, MO, NY, OH

• Active bills (12): CA, DC, LA, MA, ME, MI, NC, NJ, OR, PA, RI, WI

State ABLE Action

Enacted Passed Legislature Introduced

Did Not Pass in 2015

No Bill

Structure of State ABLE Programs

• Must be a “Qualified ABLE Program”• Most common setup is through State Treasurer’s

Office• Other government entities (e.g., Dept. of Health)• Quasi-government entities (e.g., new private

administrator subject to government oversight) – the Florida model

Questions?Heather Sachs, J.D. Stuart Spielman, J.D.VP of Advocacy & Public Policy Senior Policy Adviser and CounselNational Down Syndrome Society Autism [email protected] [email protected]