Legislature Passes ABLE Accounts Bill to Help Disabled Alaskans

Wednesday, April 27, 2016 - 16:00

Juneau) -- While public interest in Alaska politics may focus on budgets, tax bills and fiscal gaps, the state Legislature has passed bills that attract less attention, but still improve life for thousands of Alaskans.

One of these is my House Bill 188, “The ABLE Account Act,” which has passed the House and Senate unanimously, and is awaiting the governor’s signature to become law.

The ABLE Act seeks to help Alaskans with disabilities cope with the challenges of living with their disability by letting them or their families set up tax-free “ABLE accounts” to save money for education, housing, transportation or other disability-related expenses.

Congress passed the “Achieving a Better Life Experience (ABLE) Act” in 2014, authorizing states to create ABLE account programs, modeled after the successful “529” college savings programs, named after a section of IRS code.

ABLE accounts let people with disabilities improve their financial security by using their own, private savings to supplement benefits from their jobs, insurance, Supplemental Security Income (SSI), Medicaid, or other sources.

Money in ABLE accounts won’t disqualify a person from receiving Medicaid or SSI disability benefits, although SSI cash payments would be suspended when the ABLE balance exceeded $100,000.  A person can have only one account, and contribute no more than $14,000 per year. 

To be eligible for an ABLE account, a person must have become blind or disabled before the age of 26, though federal amendments may raise the age limit soon.  The standard for disability is the same as for SSI:  either lifetime or long-term “marked and severe impairment” of abilities, as certified by a licensed physician.

The Governor’s Council on Disabilities and Special Education estimates that about 13,770 Alaskans with disabilities might qualify for ABLE accounts.  The Alaska Mental Health Trust has agreed to pay $100,000 in program startup and marketing costs for the first two years.  After startup, the program will be self-funded through participant fees.

The bill evolved during the legislative process to make sure money in ABLE accounts will be available to creditors, should an account holder go bankrupt or not pay his debts.

Creating Alaska-authorized ABLE accounts offers several benefits.  It lets Alaska join a consortium of other states with ABLE accounts to achieve lower account fees through economies of scale.  Alaskans can enjoy our state’s high $400,000 contribution cap, which mirrors our college savings plan cap.  It will give us a local agency, the Department of Revenue, which can help resolve any problems.  And it demonstrates our concern for disabled Alaskans.

HB 188 empowers Alaskans with disabilities and their families to meet more of their life challenges by relying on their own pocketbooks, not public welfare, without eroding the value of public benefits to which they are entitled.

ABLE accounts will be important tools for helping thousands of disabled Alaskans live full, productive lives in their communities.  I am grateful for the many advocates for Alaska’s disabled who supported this bill, and to my House and Senate colleagues who honored it with their votes.

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