433-4 ABLE ACCOUNTS

433-4 ABLE ACCOUNT

An ABLE account is a tax-advantage account, similar to a Section 529 qualified tuition program (QTP). An ABLE account can be administered by any state that allows an ABLE account. They must be established for the benefit of the individual. The designated beneficiary is also the owner of the account.

The ABLE account balance is an exempt resource for all public assistance programs and distributions from an ABLE account for qualifying disability expenses will not be counted as income.

1. Who is eligible for an ABLE account?

To be eligible for an ABLE account, a person must be blind or disabled according to the Social Security definition of disability by a condition or conditions that began before age 46. Eligible individuals are limited to one ABLE account.

Generally, ABLE accounts may not receive aggregate contributions during a taxable year in excess of the annual gift tax exemption. Below is a table of the maximum contributions allowed per year. The maximum balance for an ABLE account in Alaska is $400,000 but each state is allowed to set a maximum for their state.

Year Max. Allowable Contribution For Year 2026 $19,000 2025 $19,000 2024 $18,000 2023 $17,000 2022 $16,000 2021 $15,000 2020 $15,000 2019 $15,000 2018 $15,000 2017 $14,000 2016 $14,000

2. Will ABLE account balance count towards the SSI resource limit?

For SSI purposes, the first $100,000 in an ABLE account is excluded as a resource.

3. What happens if an SSI recipient has excess resources held in an ABLE account?

If an individual is ineligible for SSI due to excess resources held in an ABLE account, the SSI benefits will be suspended without a time limit, but the SSI benefits will not be terminated. Medicaid may continue if Medicaid eligibility requirements are still met. See ADLTC MS 530 .

4. Are ABLE accounts transferable?

ABLE accounts are transferable to family members who are also qualified individuals.

5. What distributions are allowed from ABLE accounts and what is their impact on SSI benefits?

ABLE accounts can be used for Qualifying Disability Expenses (QDEs). QDE s are expenses for items or services needed to maintain or improve your health, independence or quality of life. QDE s are not limited to expenses for which there is a medical necessity.

QDE s include education, housing, transportation, employment training and support, assistive technology, personal support services, health prevention and wellness, financial management, administrative services, legal fees, expenses for oversight and monitoring and funeral and burial expenses.

Qualifying distributions from the ABLE account would not generally affect SSI eligibility or payment amount.

6. Retained distributions for a non-qualifying purpose or housing costs are countable the month after the month of receipt.

Example: Riley takes a distribution of $500 from her ABLE account in May to pay her rent in June. She deposits the $500 into her checking account in May, withdraws $500 in cash on June 3, and pays her landlord. This distribution, which is a housing related qualified distribution, is part of her checking balance as of the first of the month in June, which makes it countable resources for the month of June.

7. ABLE account does not replace the need for a Medicaid Qualifying Income Trust.

An ABLE account is an allowable way for a disabled individual to save more than the Medicaid resource limit but does not reduce an individual's countable monthly income.

If an individual has too much countable monthly income to qualify for Medicaid benefits, only an approved and properly funded Medicaid Qualifying Income Trust (Millers Trust, Special Needs Trust, or Pooled Trust) can reduce their countable monthly income in order to establish Medicaid eligibility.

8. Certain employed ABLE account beneficiaries may make additional contributions.

ABLE account owners who work and do not have an employer-sponsored retirement account may contribute an additional amount equal to the lesser of their annual compensation or the FPL for a one-person household in their state of residence for the prior calendar year. See one-person QMB household size in the Medicaid Income standards.

9. What are the caseworker responsibilities with an ABLE account?

The following process must be followed for all initial applications when Medicaid is being established for an individual with an ABLE account.

Request and obtain a copy of the ABLE account enrollment paperwork.

Request and obtain a copy of the ABLE bank account showing when the account was opened and the monies being deposited into the account.

Email the following information to the DHCS TPL at doh.hcs.rec.info@alaska.gov : Copy of the ABLE account enrollment paperwork, and Completed ABLE Account Reporting form (MED 19) located under e-forms.

The following process must be followed at renewal:

Review the file to ensure that we have a copy of the ABLE account enrollment paperwork. If not, request a copy.

Request current bank statement, review for discrepancies by: a. Reviewing balance, and b. Compare current balance with balance from previous year renewal to ensure that the funds have been used appropriately.

If there are any discrepancies; a. Request statements from past 12 months, and b. Discuss use of the ABLE account with the client and clarify appropriate use of the account.

The following process must be followed when closing a case with an ABLE account:

Determine the reason for closure. If the closure was because of death: a. Enter the date of death on the MERE screen, b. Close out the TPR and MCR segments on the MERI screen using the actual date of death and close out the MCR segment with the last day of the month in which they died, and c. Send a closure notice and email a copy to the DHCS TPL Unit at doh.hcs.rec.info@alaska.gov .