Senate Finance Committee Holds Hearing on the ABLE Act
Bill would establish tax-exempt ABLE accounts to assist individuals with a disabilities in building tax-exempt savings accounts to pay for qualified disability expenses
August 5, 2014 03:23 PM
Prior to adjourning for its five-week August recess, the Senate Finance Committee Subcommittee on Taxation and IRS Oversight held a hearing on the Achieving a Better Life Experience (ABLE) Act. The measure, if enacted, would allow individuals with disabilities to set up tax-exempt savings accounts to pay for qualified disability expenses. The bill, S. 313, was introduced by Senator Robert Casey (D-PA) and has significant bipartisan support with 74 additional senators signed-on as sponsors. The identical bill in the House also has strong bipartisan support with 380 Representatives signed-on as sponsors. The House bill was introduced by Rep. Ander Crenshaw (R-FL).
The bill specifies what services are considered, “qualified disability expenses,” including health and wellness services such as habilitation and rehabilitation services, therapy, respite care and long-term services and supports. Additionally, the ABLE Act stipulates that the amount a person has saved in an ABLE account will not be factored into Medicare or other means-tested federal programs.
In his opening statement, Senator Casey – the Chairman of the Subcommittee as well as the bill’s original sponsor – said that:
“The tax code provides incentives for Americans to save for important priorities, such as retirement or college, through tax-advantaged savings accounts. However, those with disabilities are not afforded the same opportunity to save for their future.
In fact, many adults with disabilities cannot save money to cover costs related to their disability without becoming ineligible for programs like Social Security Disability Insurance or Medicaid that provide a necessary lifeline to so many in need…
The ABLE Act would fix this unfair dynamic by creating tax-free savings accounts for individuals with disabilities. Specifically, it would build on the popular Section 529 college savings account program to allow families who have a loved one with a disability to similarly save tax-free for qualified disability expenses. Beneficiaries will be able to make tax-free withdrawals from their ABLE accounts to cover basic needs like education, housing, transportation and healthcare. Benefits provided through private insurance, the Medicaid program, the beneficiary’s employer, and other sources would be supplemented, but not supplanted by the legislation.”
The Subcommittee’s Ranking Member, Senator Michael Enzi (R-WY) also emphasized his support for the ABLE Act, stating that:
“The ABLE Act would take a small step in helping disabled individuals support themselves, pursue their dreams, and put themselves in a place of greater financial security. It would allow them and their families to open tax-exempt accounts so that they can plan how to best use their own funds to cover their living expenses. In our economy, many families are very familiar with the challenge of saving for the future well-being and needs of their children. A family with a disabled individual faces even more unique emotional and financial obstacles. The ABLE Act would help these families meet these challenges, whether it's paying for specialized care or a more individualized education to maintain their health and their independence, or provide for a better quality of life.”
Among the witnesses were advocates of people living with disabilities – including a representative from the National Down Syndrome Society, Autism Speaks, and Congresswoman Cathy McMorris Rodgers (R-WA) who is both a cosponsor of the House Bill, as well as the mother of a child born with Down Syndrome. In her remarks, Ms. McMorris Rodgers stated that, “As Americans, we believe in empowering all people regardless of where you come from or who you are. Policies, like the ABLE Act, will bring this very empowerment to millions of Americans – transforming them from a state of dependence into one of independence.”
While not directly related to home care, NAHC is supportive of the legislation. Said NAHC Vice President for Law and Executive Director of the NAHC-affiliated Home Care and Hospice Financial Manager’s Association Bill Dombi, “We need to find new and innovative ways to finance home care services, and this bill is a step in that direction.”
For more on the recent Senate Finance Subcommittee hearing, please click here.
For more information on the ABLE Act, please click here.