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States Roll Out 529 Plans for Disability Expenses

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Following the passage of the Achieving Better Life Experience (ABLE) Act in December 2014, several states have passed their own legislation authorizing 529A plans for tax-exempt savings on qualified expenses for people with disabilities.

So far, 47 states have passed ABLE legislation, but only a handful have actually opened or are about to open plans to beneficiaries. Twelve states have begun outreach and education by creating websites for consumers explaining the federal ABLE Act, and information on their own plans when available. 

Ohio opened its Stable Account plans on June 1 to people with disabilities nationwide. Beneficiaries must either be entitled to Supplemental Security Income or Social Security Disability Insurance due to their disability, or their condition must be listed on the Social Security Administration’s list of compassionate allowance conditions.

The plan is administered through the state treasurer. Assets are allocated across four Vanguard LifeStrategy funds (Growth, Moderate Growth, Conservative Growth or Income) and an FDIC-insured account. Lifetime contributions may not exceed $426,000.

Tennessee’s program, ABLE TN, started accepting beneficiaries on June 13. Like the Ohio program, it’s available nationwide, and it has similar eligibility requirements. There are 14 investment options.

Shelli King, communications director for theTennessee Department of Treasury, wasn’t able to provide early enrollment numbers for the brand-new program.

“We are focused right now on educating advisors on the benefits of an ABLE TN account, particularly our strong investment options and low fees. We have spoken to many advisors who have questions about who is eligible to open an account,” she told ThinkAdvisor in an email. “On, we have created a tool called ABLE Assist to help advisors ask the right questions of their clients in order to better determine eligibility.”

Nebraska will launch its plan, the Enable Savings Plan, on June 30. It will be available through the First National Bank of Omaha and the Nebraska state treasurer.

There will be three target allocations – conservative, moderate and growth – and an FDIC bank savings account, Deborah Goodkin, program director for the Enable plan at First National, told ThinkAdvisor.

“The Nebraska Investment Council looked at a variety of Vanguard underlying funds and put together an allocation,” she said.

Goodkin added that the bank has been working closely with disability services providers to educate them on how the plan works.

Florida’s plan will be available to Florida residents on July 1, according to a notice on the state’s ABLE United page.

Missouri’s ABLE program is expected to launch by the end of 2016, according to Meghan Lewis, director of communications for the Office of the Treasurer. “There are two big steps the board will have to complete, including approving regulations for the Missouri program and choosing a program manager,” she told ThinkAdvisor in an email.

ABLEnow plans in Virginia are expected to open nationwide in late 2016, according to the program’s website, and will be administered by the state’s college savings plan, Virginia529.

Colorado’s program is currently under development, and isn’t expected to be available until 2017.

Illinois, Michigan, South Carolina, Texas and Utah have not announced expected dates for their ABLE programs to be rolled out.

The Utah program will be administered by the state’s Department of Workforce Services. DWS is currently conducting a survey on how best to implement the law, according to the website; plans will not be available until that survey is complete.

Modeled after 529 education savings plans, ABLE Act plans allow a person with a disability to make after-tax contributions up to $14,000 per year, and to take distributions on qualified expenses throughout his or her life. Qualified expenses include education, housing, transportation, health care expenses, employment training and support, and financial management. The first $100,000 of contributions will be excluded from means testing.

To be eligible for a 529A plan, the designated beneficiary must have become disabled prior to his or her 26th birthday, and the disability must have lasted for at least a year or be expected to last at least a year. Beneficiaries may only have one plan in their name.

— Correction: This article has been updated to clarify that 47 states have enacted ABLE legislation, but only 12 have created consumer websites to provide updates on implementation.


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