ABLE Accounts and Medicaid Payback

What’s an ABLE Account? New tax-free savings tool for qualified individuals with disabilities Doesn’t affect eligibility for means-tested government benefits Similar to 529 College Savings Plan

Handling Funds Left Upon Account Holder’s Death Outstanding Qualified Disability Expenses (QDEs) must first be paid State Medicaid may claim payback for services delivered since opening of account Includes both medical and waiver services Source of account funds—account holder or others─makes no difference

State Discretion Individuals and families should research payback policy in state(s) where Medicaid services have been received Theoretically possible that a given state’s Medicaid program will not seek payback from account holders resident in that state If account holder moves out of non-payback state, lien will likely be applied by new state of residence

SNTs and Medicaid Payback Federal law requires Medicaid payback from 1st party SNTs and certain pooled SNTs Created with funds belonging to beneficiary Pooled trusts combine sub-accounts for many beneficiaries Payback covers Medicaid services performed throughout beneficiary’s life 3rd party SNTs not subject to payback Funded by anyone other than beneficiary

Strategy to Consider Establish 3rd party SNT tied to ABLE account Distribute trust funds to ABLE account, as needed Minimizes likelihood of lien Reaps benefits of ABLE accounts