Thursday, July 14, 2016
Hello everyone, and welcome back to the blog this week!
Today we will be focusing our attention on a topic that we have discussed numerous times on this blog: the ABLE Account. We keep returning to this topic because we feel that it is vitally important to the financial planning toolbox of every adult with disabilities and every family with special needs.
In this post, we will provide a quick summary and description of the ABLE account, in the event that new readers may not be familiar with the legislation. We will also provide an update on the latest news with the ABLE Account – now 3 national programs open for enrollment – and fill you in on how ABLE Account availability is progressing across the country.
The ABLE Account: A brief summary
The ABLE (Achieving a Better Life Experience) Act is a piece of legislation that allows individuals with disabilities to open special savings accounts for disability-related expenses. This legislation, which builds on the already existing 529 college savings accounts, ensures that all funds in this account can grow tax free as long as the funds are used for qualifying expenses such as 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, and any other disability-related expenses approved under regulations.
Perhaps the most important feature of the ABLE Accounts is this: funds in these accounts will not affect an individual’s eligibility for government benefits. This account is intended to supplement, not supplant, federal benefits and benefits paid through Medicaid, private insurance, and employment. Anyone or any entity – friend, relative, business, corporation, etc. – can contribute to this account, while the owner of the account (a.k.a. the beneficiary) retains control and ownership of all assets in the account.
As mentioned, the ABLE Account is only available to eligible individuals with disabilities; in order to be considered eligible for the ABLE Account the individual must have developed their disability before the age of 26, and must have been living with this disability for at least one year (or will expect the disability to last for at least one year). In addition, the individual must be entitled to either SSI or SSDI due to their disability, and be able to file a disability certification.
Please keep in mind that each state-specific ABLE program may have its own eligibility requirements – it is best to check out the specifics of the eligibility requirements for any ABLE program that you are considering enrolling in. For more information on the ABLE Act and the ABLE Account, check out the ABLE National Resource Center’s website, www.ablenrc.org.
Update: Where can I sign up for my ABLE Account?
Currently, 3 national ABLE Programs are available: Nebraska’s ENABLE Savings Plan (the most recently launched program), Tennessee’s ABLE TN, and Ohio’s STABLE Account.
ENABLE: Nebraska’s ENABLE Account – the most recently launched ABLE Program in the US – allows qualified individuals (individuals with disabilities) to save up to $14,000 a year tax-free, and without jeopardizing benefit eligibility. According to the ABLE National Resource Center,ENABLE focuses on efforts to ensure minimal costs associated with establishing and maintaining an ABLE account.
Some important details about ENABLE:
- ENABLE is a national program, meaning that any eligible individual can open an account, regardless of state residency.
- Subject to annual account fee of $45 per year, assessed on quarterly basis
- Total annual assessment-based fees range from .5 to .56 percent, depending on investment portfolio
- Residents of Nebraska that contributes to ENABLE program may be eligible for state income tax deduction – in some cases, up to $10,000
Individuals that wish to learn more about the specifics of the ENABLE accounts are directed to the program’s website, www.enablesavings.com.
ABLE TN: Tennessee’s ABLE Account – also a national program – ABLE TN can help individuals with disabilities and their family members save for the future, offering convenient online management tools and their easy, interactive guide ABLE Assist. ABLE Assist helps individuals learn if they qualify for ABLE accounts by asking a series of interactive questions.
One notable feature of the ABLE TN program is it’s website’s database of qualifying expenses – follow the link to learn more about which expenses qualify for ABLE Accounts, according to category.
Some important details about ABLE TN:
- Total annual asset-based fees range from 0% to 0.63% depending on the investment selections.
- Annual asset-based fee includes the underlying investment expenses and program management fee. This fee is divided over 12 months and applied to the account balance at the end of each month. There are no sales or distribution charges or fixed account maintenance fees associated with ABLE TN accounts.
- 124 investment options, including options for Growth, Balance, and Conservative, freedom to choose the investment best suited to individual’s needs, and can combine options in investment portfolio.
- Automatic investment plans (through routine deductions from bank account) available.
To learn more about ABLE TN, please visit their website www.abletn.gov.
Ohio STABLE: Ohio’s ABLE program, the STABLE Account, is set up and managed entirely online – no bank trips necessary. An initial deposit of $50 is required to open the account.
On stand-out feature of the STABLE account program is the Stable Card; according to the program’s website, The STABLE Card is a loadable prepaid debit card that is available to everyone with a STABLE Account. The STABLE Card does not pull money directly out of your STABLE Account. Instead, you get to choose a specific amount of money to load onto your card. This way, you can better control budgets and plan for your Qualified Disability Expenses.
Some important details about STABLE:
- Five different investment options, including four mutual fund based investments and one FDIC-insured investments
- Ability to change investment options twice per year
- Ohio residents will pay an annual maintenance fee of $30 (2.50 monthly), while residents of other states will pay $60 annually (5 monthly). There are also additional asset based and user fees associated with account activity.
Please visit the STABLE program’s website www.stableaccount.com for more information.
ABLE Progress across the US
Although Nebraska, Tenessee and Ohio are currently the only states that are currently enrolling beneficiaries in ABLE programs 9 (on a national basis) across the country, many more states will be offer their own versions of the program in the coming months. Florida, in fact, projected their ABLE accounts to be available on July 1st, albeit only to FL residents; information about enrolling in the FL program can be accessed via the program’s website, www.ableunited.com, or by visiting the ABLE Account’s National Resource Center’s Florida tracking webpage. In addition, Utah is projecting that their program will also be available shortly – please click here to visit their program website.
For a full list of the states and their project ABLE account availability, please visit the Arc’s ABLE Program Implementation webpage, which was updated on July 1st of this year.
Would you like to learn more?
Again, thank you all for taking the time to visit our website today. We hope that you were able to take away some useful information regarding the ABLE Account, and state ABLE program availability.
If you would like more information on how the ABLE Account program can help your family with special needs, please contact us! We have access to a number of resources that can help you plan for the financial future of your family with special needs, and can also direct you to financial planning experts with years of professional and personal experience in the special needs financial planning community.
That’s all for today, folks – please visit us again next week!