By Marshal D. Haneisen
In 2014, Congress passed The ABLE (Achieving a Better Life Experience) Act. Under this federal law, anyone can place up to $14,000 post-tax annually into an ABLE account for the benefit of a disabled individual without jeopardizing that person's eligibility for certain federally means tested public benefits, such as Supplemental Security Income (SSI) and Medicaid.
Since the act's passage, leaders have been working to establish how the program will work and be managed on the state level. Here in the Bay State, the Massachusetts Education Financing Authority (MEFA) has partnered with Fidelity Investments to offer the Attainable Savings Plan (the state's name for its ABLE program).
MEFA is a not-for-profit state authority established under Massachusetts law. It has been helping students and families with higher education costs since 1982 by providing education programs, savings plans, and low-cost loans. State law has now established MEFA as the authority to administer the ABLE program via the Attainable Savings Plan.
With the Attainable Savings Plan, parents of a child with disabilities can start saving now for the child's future disability-related needs. Only a parent or legal guardian can open an account for a minor. Adults whose disability occurred prior to reaching their 26th birthday, or their guardians, can establish an Attainable Savings Plan for their own needs. The disabled child or adult is the account owner and the person opening the account is called the Person with Signature Authority.
Fidelity will manage the Attainable Savings Plans in Massachusetts.
"We are delighted to have Fidelity Investments in this role," said Martha Savery, director of Public Affairs and Communications at MEFA.
She explained that Fidelity has created a team of specially trained staff for the program. The company offers a host of plan features and benefits, including the ability to sign up for a cash management account, which offers a fee-free debit card, check writing, and Fidelity Billpay. Accounts can be opened with as little as $50, and the minimum account balance thereafter is $30. Money can also be invested in one of eight investment portfolios to best suit the savings and investment goals of the family or individual.
The federal government, through the IRS and the Social Security Administration, sets the program's financial limits. Currently, once the Attainable Savings Plan is established, anyone -- including the beneficiary, family or friends -- can deposit up to $14,000 annually into the account for future disability-related expenses.
According to a fact sheet available on the MEFA website, "A balance of $100,000 or less in an Attainable account does not impact Federal Supplemental Security Income benefits. Medicaid benefits are not impacted regardless of balance level."
In addition, invested funds can grow up to $400,000 tax-free, Savery said, allowing a person to better support their future disability-related needs. A disability-related expense is defined as "Any expense for the benefit of the account owner in maintaining or improving his or her health, independence, or quality of life. These expenses include, but are not limited to, education, housing, transportation, employment, training and support, assistance technologies and related services, personal support services, or health and basic living expenses," according to the MEFA Attainable FAQ.
When a Massachusetts resident establishes an Attainable Savings Plan, the account can remain intact should the person later move to another state, Savery said. She added that families and account holders should learn and understand ABLE Act implementation rules in their new state, as each has different parameters.
The Attainable Savings Plan is one of several tools to consider when planning for the future of a person with disabilities.
"The Able Act and a special needs trust are not mutually exclusive," Savery noted.
Though an individual may only have one ABLE account, having such does not prevent a family from establishing a special needs trust, as well. Attorney Meredith H. Greene, an associate in the Trust & Estates, Special Needs, and Elder Law division of law firm Fletcher Tilton, PC, explained in an earlier article that because of the annual contribution cap, the ABLE account may be a tool for managing the money a person with disabilities earns through his or her job, while a special needs trust might serve as beneficiary for a parent's life insurance and retirement accounts.
"This is a long-overdue program," Savery said. "We are excited about it, and it has been met with a positive response."
The MEFA website offers information about how the Attainable Savings Plan works, eligibility, and additional resources. Fidelity representatives are available to answer questions at (844) 458-2253.
Marshal D. Haneisen is a freelance journalist, writer, and creative writing instructor. She lives in Fitchburg with her husband, son, and a variety of pets. Her son has a dual- diagnosis of Down syndrome and autism, and her experience as a parent of a child with special needs inspires some of her writing for various publications, as well as for her blog, thespecialneedsfiles.com. Information about Marshal's writing and workshops can be found marshaldhaneisen.com.