ABLE Accounts in Massachusetts
There are significant costs of living with a disability (or raising a child with a disability), ranging from finding accessible housing and transportation to obtaining personal assistance services, assistive technology, and specialized health care. Many of these expenses are not covered by insurance, Medicaid, or Medicare, making many individuals with disabilities and their families dependent on a wide variety of public benefits. Eligibility requirements for these public benefits (SSI, SNAP, Medicaid) make them available only to those with very limited assets.
The Stephen Beck, Jr. Achieving a Better Life Experience Act of 2014, better known as the ABLE Act, offers individuals with disabilities and their families a new way to plan for future disability-related expenses.
Established under section 529A of the Internal Revenue Code, the ABLE Act allows families or individuals the option of opening a tax-favored account to cover qualified disability-related living expenses, such as education, housing, and transportation. Several key features of ABLE accounts could make them a preferred vehicle for savings. For example:
- Funds up to $100,000, as well as qualified distributions other than housing expenses, will be disregarded for purposes of SSI benefits
- Funds in the accounts will have no impact on Medicaid benefits
- No federal or state taxes will be imposed on qualified distributions
These accounts were first made available nationally in 2016, and Massachusetts anticipates launching its own program within the coming months. The Massachusetts Educational Financing Authority (MEFA) has been designated as the entity to manage the ABLE program statewide, while Fidelity Investments will serve as the ABLE Program Manager.
ABLE accounts will be available to individuals that can certify receipt of benefits under Title II or Title XVI of the Social Security Act (SSA). A physician’s letter stating that an individual meets SSA disability requirements can also be used for certification. In either case, the disability must be present before age 26. The Annual Contribution Limit for 2017 will be capped at $14,000.
Starting in the Spring of 2017 eligible individuals and their families will be allowed to establish an ABLE account with the Massachusetts Educational Financing Authority (MEFA). Visit mefa.org for more information about the program launch.
Questions about the Massachusetts ABLE program may be directed to Tom Graf, MEFA’s Executive Director, or Elizabeth Fontaine, MEFA’s Deputy Executive Director, by calling (800) 449-MEFA or by emailing firstname.lastname@example.org. David D’Arcangelo of the Massachusetts Office on Disability (617) 727-7440, Ext. 27317) can serve as a resource for accessibility and disability related questions.