ABLE Tomorrow Act (S. 4498)

Summary

Makes it easier for people with disabilities to save money in special tax-free accounts without losing their government benefits.

What problem does this solve?

People with disabilities are more than twice as likely to live in poverty and often cannot save money without risking their essential government benefits. This bill improves special savings accounts, called ABLE accounts, to help them build financial security.

What does this bill do?

Stops states from recovering Medicaid costs from ABLE accounts

Prohibits states from taking money from a person's ABLE account after their death to pay back medical assistance costs. This protects the savings for the person's estate.

Allows employer contributions to ABLE accounts

Lets employers contribute to an employee's ABLE account. It also allows an employee to choose to have their employer's retirement plan contributions sent to their ABLE account instead.

Requires federal agencies to inform people about ABLE accounts

Mandates that agencies like Social Security, Veterans Affairs, and HUD provide information about ABLE accounts to individuals when they enroll in various benefit programs.

Creates grants to promote ABLE account awareness

Authorizes $50 million per year from 2027 to 2031 for grants to states and tribes to promote ABLE programs and encourage people to open accounts.

Allows larger one-time contributions

Creates an exception to the yearly contribution limit for a one-time deposit from a third-party trust, life insurance payment, or a college savings (529) account rollover.

Delays suspension of Social Security benefits

Gives individuals a two-month notice period before their Social Security benefits are suspended if their ABLE account balance grows too large.

Who does this affect?

People with disabilities
Families of people with disabilities
Employers

What is the real world impact?

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Increases financial independence for people with disabilities

Encourages and helps people with disabilities save money for expenses without fear of losing important benefits like Medicaid or Supplemental Security Income (SSI). This helps them build a more stable financial future.

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Boosts awareness of a little-known program

Requires many government agencies, like Social Security and the VA, to tell people about ABLE accounts when they sign up for benefits. This aims to increase the number of people using these helpful accounts.

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Prevents states from taking funds after death

Stops states from taking money from an ABLE account to pay back Medicaid costs after the person with the disability passes away. This ensures the saved money can be passed on to family or cover final expenses.

When does this start?

Different parts of this bill would take effect at different times, with most changes starting after it becomes law.

Agency awareness campaigns

The Social Security Administration, Medicaid, CHIP, Medicare, and TANF agencies must begin informing beneficiaries about ABLE accounts 180 days after the bill becomes law.

Employer contribution rules

The Secretary of the Treasury must issue rules confirming the tax deductibility of employer contributions to ABLE accounts within one year of the bill becoming law.

Awareness grant funding

Authorizes appropriations of $50 million per year for awareness grants for the fiscal years 2027 through 2031.