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The Arc of Colorado Blog » Blog Archive » Making Sense of the ABLE Act

Making Sense of the ABLE Act

There have been several questions recently about the ABLE Act—passed by the US Congress in 2014 (after more than 5 years of hard work by disability advocates) that allows many individuals with disabilities to maintain Medicaid and Supplemental Security Income eligibility and access to savings accounts that can be used for qualified disability related expenses. Each state will make decisions about establishing such accounts and will use processes similar to those used by the states for 529 college accounts.

ABLE Act accounts are not yet available in any state.

  • ABLE Act accounts will be known as 529A accounts and will be established in each state using processes similar to the 529 college accounts (established by Congress in 1994).
  • Federal regulations (Dept. of the Treasury) will be issued by mid-June, 2015
  • Each state will need to decide whether to offer a qualified ABLE program after federal rules are provided.
  • States will decide whether the program will be state-run, offered through financial services firms, or the state may contract with another state ABLE program for its residents.
  • Some changes in CO law may be required—the soonest that can happen is in the legislative session of 2016.
  • Any person may contribute to a 529A account (from after-tax income) for an eligible beneficiary
  • A 529 A account cannot receive more than the annual gift-tax exemption ($14,000 in 2015)
  • Aggregate contributions to a 529A account may not exceed the state’s limit on contributions to a 529 college account.
  • To keep full eligibility for SSI, up to $100,000 in the 529 A account will be disregarded; if the account exceeds $100,000, SSI benefits will be suspended but not terminated.
  • A person with a 529A account will not lose eligibility for Medicaid even if SSI benefits are suspended.
  • ABLE accounts can be established by or for persons who are eligible for SSI on the basis of blindness or disability or eligible for Social Security disability, retirement or survivor’s benefits who meet the disability criteria —to be defined in federal regulations—not yet issued.
  • The qualifying condition or disability must have occurred before the age of 26.
  • 529A accounts can be used for services or goods related to the person’s disability: education, housing, transportation, employment training and support, assistive technology, personal support, healthcare, and a variety of other services which will be described in the regulations to be issued.

For more information, click here to view and/or download the ABLE Act PDF file

Posted March 9th, 2015 in News, Policy Updates.

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