On December 16, 2014 the United States Senate passed the Achieving a Better Life Experience Act of 2014 (ABLE Act) with a bipartisan vote of 76 to 16. The House of Representatives passed the legislation on December 3 by a vote of 404 to 17. The Act will allow working-age adults with disabilities, under certain conditions, to create a tax-free savings account to be used for an array of long-term and disability-related expenses, such as education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services and other expenses. The first $100,000 of savings in this account would be exempt from the $2,000 asset cap for individuals receiving Supplemental Security Income (SSI). The accounts also will not count towards the asset cap for Medicaid eligibility. To be eligible, adults must have a disability that existed on or before the date they turned 26.
The ABLE Act promises to enable workers with disabilities to maintain financial stability while working and receiving services through Medicaid. Many workers with disabilities rely on Medicaid-funded home and community-based services in order to live in typical communities at optimal levels of independence, including personal attendant care, transportation and integrated employment services. However, in many states that lack Medicaid buy-in programs, and have not expanded Medicaid eligibility to all adults within 138% of the federal poverty line, many workers with disabilities cannot accrue more than $2,000 in savings without losing their eligibility for both SSI and Medicaid. Even in states with buy-in programs, people with disabilities may be subject to restrictive asset caps. As a result, when workers with disabilities face unexpected expenses such as car breakdowns, need to pay security deposits or attempt to save for higher education, they may lack adequate savings to pay for them. Inability to pay unexpected housing and transportation expenses can, in turn, lead to loss of employment.