The March 2018 issue of our AchievABLE Newsletter contains stories on the following:
- New Webinar Open for Registration
- Arizona Launches ABLE Program
- Social Security Administration Releases Updated Guidance on ABLE
- Webinar Archive Now Available: Understanding ABLE Disclosure Documents
- Regulatory Protections for ABLE Account Owners – MSRB Guest Blog
- ANRC Invited to Participate in Roundtable with Senator Casey
New Webinar Open for Registration: ABLE Program Spotlight Series
This month marks the beginning of the ABLE Program “Spotlight” Webinar Series. Starting in March, the ABLE National Resource Center (ANRC) will be hosting periodic webinars that feature individual ABLE Programs.
The purpose of these webinars is to introduce potential ABLE account owners and their families to ABLE programs from around the country. These “Spotlight” webinars will allow you the opportunity to learn program-specific information, such as fees, investment choices, enrollment processes and whether or not the program provides features such as debit cards. Additionally, you will be able to submit questions directly to a representative from that ABLE program.
The ANRC is excited to begin our “Spotlight” series with Oregon’s “ABLE for All” program.
Arizona Launches ABLE Program
The ABLE National Resource Center, managed by National Disability Institute (NDI), is excited to congratulate the State of Arizona on becoming the 33rd state to launch an ABLE program. The Arizona ABLE program, named AZ ABLE, will be administered through a partnership with Ohio STABLE Accounts, which are backed by Intuition ABLE Solutions, LLC, and will be managed by Vanguard Group, Inc. and Fifth Third Bank. Arizona STABLE Accounts will only be available to eligible Arizona residents with disabilities.
AZ ABLE allows qualified individuals with disabilities to save up to $15,000 a year in an ABLE account without jeopardizing their eligibility for federally-funded means-tested benefits, such as Supplemental Security Income (SSI) and Medicaid. The funds in the account can be used for disability-related expenses that assist the beneficiary in increasing and/or maintaining his or her health, independence or quality of life.
Millions of individuals with disabilities and their families are often relegated to a life of poverty as a result of not being allowed to build even the most modest levels of financial resources. Individuals receiving supports through Social Security, Medicaid and other publicly-funded programs are often disqualified from those supports if they have more than $2,000 worth of resources or assets. Now, with the launch of ABLE programs nationwide, individuals with disabilities and their families will be able to take a step to better secure their financial futures and to help offset the often significant financial challenges that can accompany living with a disability.
Like other ABLE programs across the country, the Arizona ABLE program focuses its efforts to ensure minimal costs associated with establishing and maintaining an ABLE account (which can be completed online). The Arizona ABLE program has an annual account fee of $42, charged on a monthly basis. Fees associated with investment options range from 0.19% – 0.34%.
In addition to Arizona ABLE, there are 31 other states and DC, that have launched ABLE programs: Alabama, Alaska, Colorado, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New York, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, Wyoming and West Virginia. Most of these ABLE programs are open for enrollment by eligible individuals nationwide. Please see ablenrc.org for details about these programs.
For more information on the Arizona ABLE program and how to enroll, please visit az-able.com.
Social Security Administration Releases Updated Guidance on ABLE
On March 8, 2018, the Social Security Administration (SSA) published an updated version of its Program Operations Manual System (POMS) regarding the ABLE Act and ABLE accounts. POMS is based upon the law and is an operational policy reference used by SSA internal staff to conduct SSA business. Highlights include:
- Partnerships that States can use to administer ABLE accounts. The partnerships identified include: (1) a consortium where the State has its own ABLE program, but joins other States so that it can provide lower administrative costs and better investment options than they could provide on their own; (2) States with their own ABLE program but contract with private companies or with other States to manage their ABLE program; and (3) States which do not operate their own ABLE program, but partner with another State to offer the other State’s ABLE program to their residents.
- Treatment of duplicate ABLE accounts. If there is more than one ABLE account administered by a qualified ABLE program, it discusses treatment of the account as a resource except for cases of a rollover or program-to-program transfer.
- Clarification of excluded contributions. It clarifies the exclusion of contributions made into an ABLE account as income to the beneficiary, and it explains what income is countable when deposited into an ABLE account via direct deposit or otherwise. It discusses transfer of funds from a trust and when an ABLE contribution will be treated as a completed gift.
- Simplification of Qualified Disability Expense (QDE) examples to make them more general at the request of the IRS. The references to qualified disability expenses (QDEs) were changed to be consistent with the IRS’ ABLE law*.
- Data Exchange. It explains when the States began reporting data to SSA on a monthly basis and includes a list of the shared data.
- Usage of debit cards. It provides details of the information that SSA will receive via data exchange about distributions made via an ABLE prepaid debit card. Monies distributed onto an ABLE prepaid debit card are considered a qualified distribution unless determined otherwise.
*Final IRS regulations have not been published therefore the IRS position could change when the regulations are finalized. If this happens, SSA ABLE policy will be updated accordingly.
The ABLE National Resource Center plans to post a more detailed summary of the POMS in the near future.
To read the actual document released by SSA, click HERE.
Webinar Archive Now Available: Understanding ABLE Disclosure Documents
A recording of February’s webinar “Understanding ABLE Disclosure Documents” is now available.
Regulatory Protections for ABLE Account Owners – MSRB Guest Blog
ABLE National Resource Center Editorial Contribution
Regulatory Protections for ABLE Account Owners
By Pamela Ellis
Safety and protection are two cornerstones of security. Many of us may have loved ones that are born with, or incur, disabilities before age 26, and knowing that these individuals are secure is often at the forefront of a family’s concern.
This concern may grow into worry when dealing with the expenses associated with the care of a disabled family member. Families seeking to provide financial security for their loved ones may be able to participate in accounts established to implement the Stephen Beck, Jr., Achieving a Better Life Experience Act (ABLE) of 2014. ABLE accounts help individuals with disabilities save for qualified disability expenses while still being able to qualify for their SSI and other federal means-tested benefits.
Knowing some of the legal protections that underpin ABLE programs can provide another level of assurance for individuals with disabilities that elect to open ABLE accounts, now offered nationwide by many states. States establish ABLE programs, and those states typically enter into agreements with financial services companies to provide administration and other services to their ABLE programs. Interests in ABLE programs may be sold by affiliates of the financial services companies. The Municipal Securities Rulemaking Board (MSRB) is the self-regulatory organization that regulates the affiliates of the financial services companies and their financial professionals, that may sell interests in ABLE accounts and/or that may underwrite ABLE programs. The MSRB refers to these companies and their professionals as “dealers.”
Since interests in ABLE programs may be municipal securities under the federal securities laws and may be “municipal fund securities” under MSRB rules, dealers that facilitate transactions in ABLE accounts are subject to MSRB rules that protect investors (including potential investors) such as a set of regulations call “fair practice” rules. These fair practice rules prohibit dealers from engaging in any deceptive, dishonest or unfair practice. All dealers must comply with MSRB rules so that investors are treated fairly and appropriately.
What do MSRB rules require? First, dealers must meet professional qualification standards based on their activities and also meet continuing education requirements. These requirements ensure that dealers have a foundational level of knowledge to engage in ABLE transactions.
MSRB rules also require that any recommendation that a dealer makes be suitable for the account owner, following an effort to understand a potential account owner’s “investment profile,” which includes his or her age, financial situation and liquidity needs, tax status, investment objectives, time horizon and other factors. Before selling an ABLE account, dealers must assess and disclose material facts about the ABLE program.
MSRB rules also ensure that advertisements about ABLE programs contain only truthful information so that investors are not misled. For example, advertisements about ABLE programs cannot include any materially false or misleading information about ABLE programs in general, and any content regarding investment performance information must contain certain disclosures.
ABLE account owners who are customers of a dealer will receive annual written notification of the dealer’s registration with the MSRB and notice of the availability of the MSRB’s Customer Complaint Brochure. The brochure summarizes key principles of MSRB rules that protect municipal securities investors and includes information on how to file a complaint against a dealer with the appropriate federal regulatory authority.
What else does the MSRB do to safeguard the market for ABLE programs?
To provide transparency in the municipal securities market, the MSRB operates the Electronic Municipal Market Access (EMMA®) website. EMMA is the official repository for information on virtually all municipal securities providing free access to official disclosures, such as the program disclosure booklets for ABLE programs, and other information about the municipal securities market. Individuals seeking information on ABLE programs can visit EMMA to view an interactive map that provides information submitted to the MSRB about various ABLE programs offered by that state.
Additional informative resources are available in the MSRB’s Education Center, a multimedia library of information for anyone interested in learning about the municipal securities market. The MSRB also publishes periodic educational documents, such as this Frequently Asked Questions about ABLE Programs. Anyone interested in receiving email notifications about the availability of new educational documents can register for email updates from the MSRB.
Pamela Ellis is Associate General Counsel at the Municipal Securities Rulemaking Board.
ANRC Invited to Participate in Roundtable with Senator Casey
The ANRC was invited to participate in a small roundtable hosted by Senator Robert “Bob” Casey (D-PA). The roundtable focused on the importance of Medicaid and how to increase economic stability and independence among individuals with disabilities and their families through the utilization of ABLE accounts.
Senator Casey, an outspoken champion for issues affecting the disability community, brought together 10 individuals for this discussion, including representatives from various national disability-related advocacy organizations, working-age adults with disabilities and parents of young children with disabilities.
The conversation allowed participants to explain how supports and services provided through the Medicaid program allow individuals with disabilities to live independently in their communities, pursue and maintain meaningful employment and increase their overall quality of life. Additionally, Senator Casey, who played a pivotal role in passing the ABLE Act, expressed continued enthusiasm for using the ABLE Act as a vehicle to help individuals with disabilities and their families secure a better financial future. Senator Casey called on the ANRC to provide an update on ABLE implementation and asked questions on how the ABLE Act could be amended in order to increase eligibility for the disability community.