About This Legislation:
The ABLE Act would give individuals with disabilities and/or their families access to savings accounts that would allow individual choice and control while protecting eligibility for Medicaid, SSI and other important federal benefits for people with disabilities. They could create a disability savings account that would accrue interest tax-free. Withdrawals would not be taxed as long as they are used to pay for qualified expenses. The account could fund a variety of essential expenses for the person with a disability, including educational expenses; medical and dental care; health, prevention and wellness expenditures; employment training and support; assistive technology; personal support services; transportation; housing; and other expenses for life necessities.
Savings accounts opened under the ABLE Act would differ from other savings instruments with tax advantages because they provide substantial flexibility:
In a manner similar to the treatment of Medicaid trusts, funds remaining in the accounts at the individual's death would be used to pay back the state Medicaid program up to the value of services provided to the individual during life.
The ABLE Act would give individuals with disabilities and their families an option for saving for their future financial needs in a way that supports their unique situation and makes it more feasible to live full, productive lives in their communities.
The ABLE Act was introduced in the House (H.R. 1205) by Reps. Ander Crenshaw, R-Fla.; Kendrick Meek, D-Fla.; Patrick Kennedy, D-R.I.; and McMorris Rodgers, R-Wash. It was introduced in the Senate (S. 493) by Sens. Robert Casey, D-Pa.; Orrin Hatch, R-Utah; Christopher Dodd, D-Conn.; Sam Brownback, R-Kan.; Richard Burr, R-N.C.; and Edward Kennedy, D-Mass. Both bills have a growing list of bipartisan co-sponsors. No hearings have been held.