States Adopt Laws for Savings Accounts for Persons with Disabilities
On Dec. 19, 2014, President Obama signed into law the Stephen Beck Jr. Achieving a Better Life Experience, or ABLE, Act1 that allows persons with disabilities to save for their futures through tax-advantaged savings accounts. The act gives qualified Americans with disabilities the chance to save money and meet the added expenses of living with a disability without jeopardizing their eligibility for important supports such as Supplemental Security Income, or SSI, and Medicaid.
Content
FEBRUARY 2016
THE COUNCIL OF STATE GOVERNMENTS
CAPITOL RESEARCH
HEALTH POLICY
States Adopt Laws for Savings Accounts for Persons with Disabilities
On Dec. 19, 2014, President Obama signed into
law the Stephen Beck Jr. Achieving a Better Life
Experience, or ABLE, Act1 that allows persons with
disabilities to save for their futures through taxadvantaged savings accounts. The act gives qualified
Americans with disabilities the chance to save money
and meet the added expenses of living with a disability without jeopardizing their eligibility for important
supports such as Supplemental Security Income, or
SSI, and Medicaid.
The National Down Syndrome Society–whose board
member, Stephen Beck Jr., conceived the ABLE Act
to assist his daughter with Down syndrome–estimates
about 10 percent of the 58 million Americans with
disabilities will qualify for ABLE accounts.2
Money saved in an ABLE account will not affect an
individual’s eligibility for SSI, Medicaid and other
public benefits governed by federal law. The legislation states that ABLE accounts, funded with private
savings, will “secure funding for disability-related
expenses on behalf of designated beneficiaries with
disabilities that will supplement, but not supplant,
benefits provided through private insurance, Medicaid, SSI, the beneficiary’s employment and other
sources.”3
The implementation of the new federal law depends
on states adopting their own ABLE legislation
establishing the framework for the administration of
the accounts, much like the various state 529 accounts
that allow savings for college education expenses.
Thirty-four states and the District of Columbia
passed laws in 20154 to set up ABLE savings account
structures, but none are fully implemented yet.
Michael Morris, executive director of the National
Disability Institute, expects five to 10 states to be
open for business in 2016.5
The primary provisions of ABLE accounts under the
federal law are:
• An individual is eligible for an ABLE account if he
or she has a significant disability with onset before
the age of 26.
The Council of State Governments
• Accounts can be established and used for persons
age 26 or over so long as the disability occurred
before that age.
• The annual contribution to the account is capped
at $14,000, but will be adjusted annually for
inflation.
• Contributions to the account may be made by the
beneficiary or family members and friends.
• Allowed expenses are those related to the cost of
living with a disability. Beneficiaries must keep
documentation of their expenses; however, specific
expenses are not approved by state administrators.
• States may offer various investment strategies as
they do with college savings plans.
• States may offer their own tax incentives for
ABLE account savings.
Many states have set a $300,000 limit for ABLE
accounts, as they have for 529 college education
accounts. The federal law exempts the first $100,000
from the SSI individual resource limit and would
discontinue SSI monthly income benefits. Beneficiaries would, however remain eligible for Medicaid.
States could recoup some Medicaid expenses upon
the death of the beneficiary.
In December 2015, as part of a larger tax package,
Congress removed the requirement that a qualified
individual could only open an ABLE account in his
or her state of residency. For the following reasons,
the National Down Syndrome Society supports the
change that will allow people to shop around:6
• It will speed up access to ABLE accounts as qualified individuals will not have to wait for their state
to establish a program.
• It may cause states to provide incentives to
encourage savers to stay in state through state tax
deductions or other incentives.
According to Morris of the National Disability Institute, the ABLE Act is transformative.7 No longer are
persons with disabilities relegated to a life in poverty
in order to receive SSI payments and health care
under Medicaid. Parents can set up savings accounts
for children born with disabilities. Working-age adults
can use ABLE assets to go to school, start a business,
own a home or purchase assistive technology.
“Put more simply, the ABLE Act levels the playing field and ensures equal opportunity, as well as
meaningful participation, in the social and economic
mainstream [for individuals with disabilities],” said
Morris.
• It will increase competition as people will be able
to shop for state ABLE programs with investment
options that meet their needs.
Debra Miller, Director of Health Policy, [email protected]
• It will spur states to implement their ABLE programs quickly to sign up as many qualified savers
as possible.
REFERENCES
H.R. 647—ABLE Act of 2014. https://www.congress.gov/bill/113th-congress/house-bill/647
2 National Down Syndrome Society. “Achieving a Better Life Experience (ABLE) Act.” goo.gl/YGpKPm
3 H.R. 647—ABLE Act of 2014.
4 National Down Syndrome Society. “ABLE State Legislation and Implementation Updates.”
goo.gl/O3oR4G
5 Michael Morris. “Happy Birthday ABLE Act,” Huffington Post, Dec. 18, 2015.
http://www.huffingtonpost.com/michael-morris/happy-birthday-able-act_b_8840124.html
6 National Down Syndrome Society. “Achieving a Better Life Experience (ABLE) Act.”
7 Michael Morris.
1
THE COUNCIL OF STATE GOVERNMENTS
ACHIEVING A BETTER LIFE EXPERIENCE (ABLE) ACT
STATUS OF ABLE LEGISLATION IN THE STATES, AS OF JAN. 12, 2016
State
State
Legislation
Enacted
Date Signed by
Governor
Link to State
Legislation
Link to State
Legislation
Notes
6/9/15
SB 226
HB 188
SB 104
carried over to 2016
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Yes
No
No
Yes
Yes
Yes
Yes
4/8/15
10/11/15
6/3/15
6/19/15
HB 1239
AB 449
HB 1359
HB 6738
District of Columbia
Yes
Mayor: 10/16/2015
B21-0252
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Yes
Yes
No
Yes
No
Yes
No
6/10/15
5/21/15
HB 60
CS/SB 642
7/2/15
HB 119
7/27/15
SB 1383
SB 11
Iowa
Yes
7/2/15
SF 505
Kansas
Kentucky
Yes
No
4/15/15
HB 2216
HB 74
Louisiana
Yes
7/1/15
Maine
Maryland
No
Yes
5/12/15
Massachusetts
Yes
8/5/14
Michigan
Yes
10/28/15
Minnesota
Yes
5/22/15
SF 1458
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
No
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Yes
No
Yes
No
Yes
No
No
Yes
Yes
Yes
6/29/15
5/5/15
5/27/15
5/29/15
SB 174
SB 399
LB 591
SB 419
1/11/16
12/22/15
8/11/15
4/1/15
7/16/15
A 3956
HB 61
S 4472-D
H 556
HB 1373
HB 155
8/12/15
SB 777 D
7/9/15
HB 5564 Sub A
H 3768
Vermont
B21-0391
LD 1421
SB 761
Ch. 226, Acts of
2014
HB 4542
HB4544
HB 999/SB 1162
SB 1664
SB 292
Yes
6/1/15
S 138
Virginia
Yes
3/17/15
HB 2306
Washington
No
West Virginia
Wisconsin
Wyoming
Yes
Yes
No
HB 2323
HB 2902
SB 21
law expires 1/13/2016; legislation
is pending
filed for 2016
within health and human services
appropriation bill
filed for 2016
ABLE Act passed in 2014; amended
after federal law adopted.
carried over to 2016
HB 598
5/18/15
6/19/15
3/31/15
3/31/15
7/12/15
SB 324
HD 3853 will revise in 2016 per
federal law adopted
HB 4543
attached to omnibus health and
human services appropriation bill
S 2770
prefiled for 2016
A 7767-B
SB 465 Sub A
carried over to 2016
passed as part of an economic
development bill
SB 1404
HB 2323 prefiled for 2016; 2015
legislation created work group
added to executive budget act
Source: National Down Syndrome Society. “ABLE State Legislation and Implementation Updates.” goo.gl/O3oR4G
THE COUNCIL OF STATE GOVERNMENTS
3
THE COUNCIL OF STATE GOVERNMENTS
CAPITOL RESEARCH
HEALTH POLICY
States Adopt Laws for Savings Accounts for Persons with Disabilities
On Dec. 19, 2014, President Obama signed into
law the Stephen Beck Jr. Achieving a Better Life
Experience, or ABLE, Act1 that allows persons with
disabilities to save for their futures through taxadvantaged savings accounts. The act gives qualified
Americans with disabilities the chance to save money
and meet the added expenses of living with a disability without jeopardizing their eligibility for important
supports such as Supplemental Security Income, or
SSI, and Medicaid.
The National Down Syndrome Society–whose board
member, Stephen Beck Jr., conceived the ABLE Act
to assist his daughter with Down syndrome–estimates
about 10 percent of the 58 million Americans with
disabilities will qualify for ABLE accounts.2
Money saved in an ABLE account will not affect an
individual’s eligibility for SSI, Medicaid and other
public benefits governed by federal law. The legislation states that ABLE accounts, funded with private
savings, will “secure funding for disability-related
expenses on behalf of designated beneficiaries with
disabilities that will supplement, but not supplant,
benefits provided through private insurance, Medicaid, SSI, the beneficiary’s employment and other
sources.”3
The implementation of the new federal law depends
on states adopting their own ABLE legislation
establishing the framework for the administration of
the accounts, much like the various state 529 accounts
that allow savings for college education expenses.
Thirty-four states and the District of Columbia
passed laws in 20154 to set up ABLE savings account
structures, but none are fully implemented yet.
Michael Morris, executive director of the National
Disability Institute, expects five to 10 states to be
open for business in 2016.5
The primary provisions of ABLE accounts under the
federal law are:
• An individual is eligible for an ABLE account if he
or she has a significant disability with onset before
the age of 26.
The Council of State Governments
• Accounts can be established and used for persons
age 26 or over so long as the disability occurred
before that age.
• The annual contribution to the account is capped
at $14,000, but will be adjusted annually for
inflation.
• Contributions to the account may be made by the
beneficiary or family members and friends.
• Allowed expenses are those related to the cost of
living with a disability. Beneficiaries must keep
documentation of their expenses; however, specific
expenses are not approved by state administrators.
• States may offer various investment strategies as
they do with college savings plans.
• States may offer their own tax incentives for
ABLE account savings.
Many states have set a $300,000 limit for ABLE
accounts, as they have for 529 college education
accounts. The federal law exempts the first $100,000
from the SSI individual resource limit and would
discontinue SSI monthly income benefits. Beneficiaries would, however remain eligible for Medicaid.
States could recoup some Medicaid expenses upon
the death of the beneficiary.
In December 2015, as part of a larger tax package,
Congress removed the requirement that a qualified
individual could only open an ABLE account in his
or her state of residency. For the following reasons,
the National Down Syndrome Society supports the
change that will allow people to shop around:6
• It will speed up access to ABLE accounts as qualified individuals will not have to wait for their state
to establish a program.
• It may cause states to provide incentives to
encourage savers to stay in state through state tax
deductions or other incentives.
According to Morris of the National Disability Institute, the ABLE Act is transformative.7 No longer are
persons with disabilities relegated to a life in poverty
in order to receive SSI payments and health care
under Medicaid. Parents can set up savings accounts
for children born with disabilities. Working-age adults
can use ABLE assets to go to school, start a business,
own a home or purchase assistive technology.
“Put more simply, the ABLE Act levels the playing field and ensures equal opportunity, as well as
meaningful participation, in the social and economic
mainstream [for individuals with disabilities],” said
Morris.
• It will increase competition as people will be able
to shop for state ABLE programs with investment
options that meet their needs.
Debra Miller, Director of Health Policy, [email protected]
• It will spur states to implement their ABLE programs quickly to sign up as many qualified savers
as possible.
REFERENCES
H.R. 647—ABLE Act of 2014. https://www.congress.gov/bill/113th-congress/house-bill/647
2 National Down Syndrome Society. “Achieving a Better Life Experience (ABLE) Act.” goo.gl/YGpKPm
3 H.R. 647—ABLE Act of 2014.
4 National Down Syndrome Society. “ABLE State Legislation and Implementation Updates.”
goo.gl/O3oR4G
5 Michael Morris. “Happy Birthday ABLE Act,” Huffington Post, Dec. 18, 2015.
http://www.huffingtonpost.com/michael-morris/happy-birthday-able-act_b_8840124.html
6 National Down Syndrome Society. “Achieving a Better Life Experience (ABLE) Act.”
7 Michael Morris.
1
THE COUNCIL OF STATE GOVERNMENTS
ACHIEVING A BETTER LIFE EXPERIENCE (ABLE) ACT
STATUS OF ABLE LEGISLATION IN THE STATES, AS OF JAN. 12, 2016
State
State
Legislation
Enacted
Date Signed by
Governor
Link to State
Legislation
Link to State
Legislation
Notes
6/9/15
SB 226
HB 188
SB 104
carried over to 2016
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Yes
No
No
Yes
Yes
Yes
Yes
4/8/15
10/11/15
6/3/15
6/19/15
HB 1239
AB 449
HB 1359
HB 6738
District of Columbia
Yes
Mayor: 10/16/2015
B21-0252
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Yes
Yes
No
Yes
No
Yes
No
6/10/15
5/21/15
HB 60
CS/SB 642
7/2/15
HB 119
7/27/15
SB 1383
SB 11
Iowa
Yes
7/2/15
SF 505
Kansas
Kentucky
Yes
No
4/15/15
HB 2216
HB 74
Louisiana
Yes
7/1/15
Maine
Maryland
No
Yes
5/12/15
Massachusetts
Yes
8/5/14
Michigan
Yes
10/28/15
Minnesota
Yes
5/22/15
SF 1458
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
No
Yes
Yes
Yes
Yes
No
Yes
No
Yes
Yes
Yes
Yes
No
Yes
No
Yes
No
No
Yes
Yes
Yes
6/29/15
5/5/15
5/27/15
5/29/15
SB 174
SB 399
LB 591
SB 419
1/11/16
12/22/15
8/11/15
4/1/15
7/16/15
A 3956
HB 61
S 4472-D
H 556
HB 1373
HB 155
8/12/15
SB 777 D
7/9/15
HB 5564 Sub A
H 3768
Vermont
B21-0391
LD 1421
SB 761
Ch. 226, Acts of
2014
HB 4542
HB4544
HB 999/SB 1162
SB 1664
SB 292
Yes
6/1/15
S 138
Virginia
Yes
3/17/15
HB 2306
Washington
No
West Virginia
Wisconsin
Wyoming
Yes
Yes
No
HB 2323
HB 2902
SB 21
law expires 1/13/2016; legislation
is pending
filed for 2016
within health and human services
appropriation bill
filed for 2016
ABLE Act passed in 2014; amended
after federal law adopted.
carried over to 2016
HB 598
5/18/15
6/19/15
3/31/15
3/31/15
7/12/15
SB 324
HD 3853 will revise in 2016 per
federal law adopted
HB 4543
attached to omnibus health and
human services appropriation bill
S 2770
prefiled for 2016
A 7767-B
SB 465 Sub A
carried over to 2016
passed as part of an economic
development bill
SB 1404
HB 2323 prefiled for 2016; 2015
legislation created work group
added to executive budget act
Source: National Down Syndrome Society. “ABLE State Legislation and Implementation Updates.” goo.gl/O3oR4G
THE COUNCIL OF STATE GOVERNMENTS
3
