Implementing ABLE: 2016

Transcription

1 Implementing ABLE: 2016 Mderatr: Michael Mrris, Executive Directr Natinal Disability Institute (NDI)

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7 Presenters and Panelists Slide 7 Chris Rdriguez, Senir Public Plicy Advisr, Natinal Disability Institute Heather Sachs, Vice President f Advcacy & Public Plicy, Natinal Dwn Syndrme Sciety (NDSS) Ken Brwn, Team Leader, SSI Incme, Resurces and Payment Determinatin Team, Scial Security Administratin (SSA) Marty Frd, Senir Executive Officer, Public Plicy, The Arc Stuart Spielman, Senir Plicy Advisr and Cunsel, Autism Speaks William Thmpsn, Deputy Executive Directr, Flrida Prepaid Cllege Bard

8 Agenda Slide 8 ABLE Basics and Cre Cmpnents Status f Federal and State Implementatin Ntice f Prpsed Rule and IRS Ntice Presentatin frm SSA n POMS State Perspective and Prgram Sptlight Questins and Answers

9 The ABLE Act is Law Slide 9 The Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act became law n December 19, 2014 creates a new ptin fr sme peple with disabilities and their families t save fr the future, while prtecting eligibility fr public benefits. Presentatin is based n what we knw r presume nw

10 What is an ABLE Accunt? ABLE accunts: Slide 10 Are established in the new Sectin 529A Qualified ABLE Prgrams Are qualified savings accunts that receive preferred federal tax treatment Enable eligible individuals t save fr disability related expenses Are NOT yet available, but the first prgrams are expected in early-mid 2016 Assets in and distributins fr qualified disability expenses will be disregarded r given special treatment in determining eligibility fr mst federal means-tested benefits

11 What are sme imprtant requirements f ABLE accunts? Each eligible individual may have nly ne ABLE accunt. Slide 11 Designated beneficiary is the accunt wner (althugh anther persn such as a parent r guardian may be allwed signature authrity ver the accunt). Originally accunts were required t be established in the designated beneficiary s state f residence, r in a cntracting state, THIS IS NO LONGER THE CASE AS A RESULT OF A RECENT CONGRESSIONAL AMENDMENT TO THE LAW*. Ttal annual cntributins may nt exceed the federal gift tax cntributin, which is currently $14,000 (this will peridically be adjusted fr inflatin). Multiple individuals may make cntributins t an ABLE accunt. Aggregate cntributins may nt exceed the state limit fr 529 savings accunts, typically set at ver $250,000.

12 Wh is eligible t be an ABLE accunt beneficiary? T be eligible, individuals must meet tw requirements: Slide 12 1) Age requirement: must be disabled befre age 26 2) Severity f disability: Have been determined t meet the disability requirements fr Supplemental Security Incme (SSI) r Scial Security disability benefits (Title XVI r Title II f the Scial Security Act) and are receiving thse benefits, Submit a disability certificatin assuring that the individual hlds dcumentatin f a physician s diagnsis and signature, and cnfirming that the individual meets the functinal disability criteria in OR the ABLE Act (related t the severity f disability described in Title XVI r Title II f the Scial Security Act)*.

13 What may funds frm an ABLE accunt be used fr? Slide 13 Distributins frm an ABLE accunt may be made fr qualified disability expenses. Qualified disability expenses are expenses that relate t the designated beneficiary s blindness r disability and are fr the benefit f that designated beneficiary in maintaining r imprving his r her health, independence, r quality f life. The term qualified disability expenses shuld be bradly cnstrued t permit the inclusin f basic living expenses and shuld nt be limited t: expenses fr items fr which there is a medical necessity, r which prvide n benefits t thers in additin t the benefit t the eligible individual.

14 Qualified disability expenses may include the fllwing: Educatin Husing Transprtatin Emplyment training and supprt Assistive technlgy and persnal supprt services Health, preventin, and wellness Financial management and administrative services Legal fees Expenses fr versight and mnitring Basic Living Expenses (NPRM) Funeral and burial expenses Any ther expenses apprved by the Secretary f the Treasury under regulatins cnsistent with the purpse f the prgram Distributins fr nn-qualified expenditures will be subject t tax cnsequences and may affect eligibility fr federal means tested benefits. Slide 14

15 Hw d ABLE accunt assets impact eligibility fr federal benefits? Slide 15 ABLE assets will be disregarded r receive favrable treatment when determining eligibility fr mst federal means-tested benefits: Supplemental Security Incme(SSI): Fr SSI, nly the first $100,000 in ABLE accunt assets will be disregarded. SSI payments (mnthly cash benefit) will be suspended if the beneficiary s accunt balance exceeds $100,000, but SSI benefits (eligibility) will nt be terminated. Funds abve $100,000 will be treated as resurces. Husing expenses intended t receive the same treatment as all husing csts paid by utside surces. Hwever, new SSA instructins (POMS) will treat husing expenses as resurces nly if distributed in ne mnth and held until the fllwing mnth. (mre later)

16 Impact n Federal Benefits (cnt.) Slide 16 Medicaid: ABLE assets are disregarded in determining Medicaid eligibility Medicaid benefits are NOT suspended if the ABLE accunt balance exceeds $100,000 (that is nly applicable t the SSI cash benefit) Medicaid Payback: Any assets remaining in the ABLE accunt when a beneficiary dies, subject t utstanding qualified disability expenses, can be used t reimburse a state fr Medicaid payments made n behalf f the beneficiary after the creatin f the ABLE accunt (the state wuld have t file a claim fr thse funds)* Fr purpses f this sectin, the state is cnsidered a creditr f the ABLE accunt, nt a beneficiary

17 Tax Implicatins Slide 17 Cntributins t an ABLE accunt are made with pst-tax dllars. Federal taxatin: In general, ABLE prgrams are exempt frm taxatin. Distributins frm ABLE accunts fr qualified disability expenses are exempt frm taxatin. With certain exceptins, distributins nt used fr qualified disability expenses are taxable and subject t an additinal 10% tax. State taxatin: State tax cnsequences will vary. Sme states prvide significant tax incentives fr cntributins t 529 accunts and may prvide similar incentives fr cntributins t ABLE accunts.

18 When will ABLE accunts be available? Slide 18 Befre ABLE accunts becme available, a State must pass authrizing legislatin t begin t establish a prgram. Each state must decide whether (and hw) t ffer a qualified ABLE prgram. The timing f ABLE prgram availability will vary frm state t state, hwever due t the eliminatin f the residency requirement, qualified beneficiaries may be able t enrll in a prgram as sn as the first prgram is up and running*.

19 Federal Implementatin Slide 19 The Department f Treasury, in cnjunctin with the IRS, has released a Ntice f Purpsed Rule Making (NPRM) and tw ther Advanced Ntices. We expect final rules t be published in mid-late 2016 (states can begin t enrll qualified beneficiaries regardless f when the final rules are published). The Scial Security Administratin (SSA) has released a guidance n ABLE thrugh its Prgram Operatins Manual System (POMS) and their wn NPRM regarding reprting requirements. We d expect further supplemental guidance frm ther federal agencies that administer varius federal means tested prgrams (ex. CMS, Educatin, and HUD).

20 State Implementatin Slide states have enacted their wn versins f the ABLE Act and shuld be in the prcess f setting up state ABLE prgrams. We expect there culd be anywhere frm 5-7 prgrams ffering ABLE accunts in 2016, the first f which is expected t launch in March. While there will be a significant amunt f cnsistency between prgrams, there will als be a certain level f variatin frm prgram t prgram. This variatin shuld be taken int cnsideratin when chsing a prgram that best meets the needs f the accunt wner (the beneficiary).

21 Ntice f Prpsed Rule Making (NPRM) Slide 21 On June 19 th the Department f Treasury, in cnjunctin with the IRS, released a Ntice f Prpsed Rule Making (NPRM) regarding the Achieving a Better Life Experience (ABLE) Act. The NPRM acts t: assist states and prgram administratrs in better understanding the guidelines n hw t develp and maintain an ABLE prgram; and give additinal clarificatin t parts f the law which may benefit frm further explanatin and/r guidance

22 NPRM and Ntice Highlights (that have nt already been mentined) Slide 22 Eligibility and Re-Certificatin Transfers and Rllvers Cntributins Distributins Qualified Disability Expenses

23 Eligibility and Re-Certificatin Slide 23 The prpsed regulatins prvide that: Eligibility shuld be determined fr each taxable year, and that determinatin applies fr the entire year A qualified ABLE prgram may impse different peridic recertificatin requirements fr different types f impairments.

24 Transfers and Rllvers Slide 24 The prpsed regulatins prvide that: Funds in a qualified tuitin accunt (typical 529) will nt be allwed t be rlled ver t an ABLE accunt absent tax cnsequences and penalties. A qualified ABLE prgram is allwed a prgram-t-prgram transfer t effectuate a change f qualified ABLE prgram r a change f designated beneficiary t anther eligible individual (prvided that the successr is a sibling f the frmer beneficiary and the transfer is made prir t the death f the transferring accunt wner).

25 Distributins Slide 25 The prpsed regulatins prvide that: An ABLE accunt may be used fr lng-term benefit and/r shrt-term needs f the designated beneficiary It wuld be reasnable t expect distributins and frequency f distributin t reflect that.

26 Cntributins Slide 26 The prpsed regulatins prvide that: A qualified ABLE prgram must prvide adequate safeguards t ensure that ttal cntributins t an ABLE accunt d nt exceed that State s limit fr aggregate cntributins under its qualified tuitin prgram

27 Slide 27 Scial Security ABLE Presentatin

28 The Achieving a Better Life Experience (ABLE) Act

29 ABLE Webinar Objectives SSA POMS Publicatin Federal Register Ntice Publicatin State Mnthly Reprting Expectatins System Enhancements Frequently Asked Questins Next Steps Q and A Sessin

30 SSA POMS Overview Highlights: When t exclude ABLE accunt balances, cntributins and distributins When t cunt ABLE accunt balances and distributins Upcming change t POMS: Beneficiaries are nt limited t participatin in an ABLE prgram in their hme state

31 Federal Register Ntice Publicatin Advance Ntificatin Regarding Reprting by State ABLE Prgrams was published in the Federal Register n 12/14/15 in 80 FR SSA received cmments suggesting minr tweaks t the system develpment

32 Mnthly Reprting Expectatins Name f designated beneficiary SSN Date f birth Name f persn with signature authrity Accunt number (unique identificatin number) Date accunt pened Date accunt clsed Mnthly balance - first f the mnth Date f distributins in reprting perid Distributin amunt Accunt prgram state

33 System Enhancements Data exchange agreements t be established with States Expected cmpletin by the end f FY 2016 Reprting start date - TBD

34 Frequently Asked Questins SSA drafted Frequently Asked Questins, which will be psted t ssa.gv. These FAQs are currently under review. We will update these as necessary.

35 Next Steps Establish a Cmputer Matching Agreement Cntinue internal system develpment Cntinue t meet with ther Federal agencies t share updates Wrk with State ABLE Prgrams n data exchange

36 Slide 36 State Perspective with Will Thmpsn (Flrida ABLE Prgram)

37 Implementing an ABLE Prgram in Flrida Understanding Our Custmers Seeking a lng-term financial planning accunt Qualifying fr r maintaining SSI r Medicaid Supplementing a Special Needs Trust Opening an ABLE Accunt Administratr Beneficiary eligibility Investment ptins Flrida s ABLE Prgram Launched by July 1, 2016 Cntact us at Inf@MyABLESavings.cm Sign up fr mre infrmatin at MyABLESavings.cm

38 Slide 38 Panel Discussin and Questin frm Audience

39 Cntact Infrmatin Slide 39 Marty Frd, Senir Executive Officer, Public Plicy, The Arc Stuart Spielman, Senir Plicy Advisr and Cunsel, Autism Speaks Heather Sachs, Vice President f Advcacy & Public Plicy, Natinal Dwn Syndrme Sciety hsachs@ndss.rg Chris Rdriguez, Senir Public Plicy Advisr, Natinal Disability Institute crdriguez@ndi-inc.rg