The ABLE Act for Special Needs: 2016 Update
It's been estimated that nearly 20% of today's working parents are caring for a child with special needs - an advent that affects personal lives as well as jobs.
So clarifying the pathways to services for these children has been shown to be of substantial value to both employees and the organizations for whom they work.
"In my day-to-day work with clients, I'm hearing more and more about how hard it is for working families to find and access the right services and resources for children with special needs," wrote Bright Horizons Client Services VP Nancy Burlingame, who has herself traveled this path. "Left on their own, it's a difficult road."
A Complicated Road for Working ParentsAs an example, consider the tangle of the Achieving a Better Life Experience (ABLE) Act, a federal law passed in December 2014.
When fully enacted, this new tax law will allow families and individuals to save up to $14,000 per year for disability-related expenses. The tax-free accounts will be outside of other needs-based government benefits, such as Supplemental Security Income (SSI) and Medicaid, a big change since prior to the law, such individuals could not have more than $2,000 in assets without affecting their eligibility for government benefits. And unlike an FSA, the funds will be available for quality-of-life services (transportation, education, and housing for example) and not just medical expenses.
It's all great...except that as written, the ABLE Act was looking burdensome to take advantage of.
For Working Parents, New Rules, New Regulations, and New QuestionsThe proposed regulations generated a lot of concern about the amount of oversight that made establishing and using an ABLE Act account unappealing to all involved - individuals with disabilities, their family members, financial institutions, and even state governments.
Fortunately, the Internal Revenue Service (IRS) took the public's comments seriously and issued in November 2015 what it calls "interim guidance" on the ABLE Act regulations. The guidance indicates the IRS's intention to streamline several administrative requirements when it issues final regulations in the near future.
How does the interim guidance help streamline requirements?
Eases Reporting Requirements
The original regulations stated that each distribution from an ABLE Act account required approval, a requirement that called for an unmanageable (and expensive) level of oversight. The final regulations will not include this requirement; instead the ABLE Act account beneficiary will have to keep track of expenditures and file appropriate tax returns.
Simplifies Contribution Rules
Because of the IRS's concern that "excess contributions" made unintentionally would need to be returned, the original rules required contributors to provide a Social Security Number every time they made a contribution. Final regulations will not include this requirement, instead requiring states to create provisions that prevent excess contributions from being made.
Offers Self-Certified Status
Institutions holding ABLE Act accounts will not be required to collect, review, and maintain records proving qualification in the final regulations. The person opening the ABLE Act account must swear under penalty of perjury that the beneficiary of the account qualifies.The new law provides a lot of promise to those looking for ways to improve the quality of life of their children without jeopardizing eligibility for government benefits. But it's understandably confusing to many. For the average employee, keeping up with new and evolving laws and regulations can amount to the equivalent of another full-time job. So employers who provide resources and live experts offer substantial value for their people!and themselves.
And in fact, Nancy's own experience with myEdGPS, the platform offered by Bright Horizons and available through her employer, is illustrative.
The myEdGPS platform solved a very specific problem, she says. "But the benefits went beyond special needs help. I can tell you that knowing I had my company behind me had even further-reaching effects. It also helped me - my whole family, in fact bounce back a lot more quickly than I might have."