1. West Virginia State Treasurer’s Office
ABLE Plan
A program of the
West Virginia State Treasurer’s Office
John D. Perdue, State Treasurer
ABLE Accounts are a “game changer” for people with disabilities
Previous rules have kept people with disabilities impoverished and, subsequently, unable to invest
This is perhaps the biggest advancement for people with disabilities since ADA (passed in 1990… 27 years ago)

2. What is ABLE? Federal legislation passed 2014
Creates tax-advantaged investment accounts for individuals with disabilities
Assets in your account do not affect eligibility for federal or West Virginia means-tested benefits programs like SSI or Medicaid
Hybrid of 529 college savings account + checking account + Special Needs Trust
B4: ABLE Accounts are structurally like 529 accounts, in terms of tax advantages, online use, and investment options, but they have the transactional capabilities of a checking account, and the benefits protections of a Special Needs Trust.
A program of the West Virginia State Treasurer’s Office

3. What is WVABLE? WVABLE is West Virginia’s ABLE Plan
Offered to West Virginia residents through a partnership with the Ohio STABLE Account program
Administered by the West Virginia State Treasurer
Launch: February 9, 2018
By partnering with Ohio, WV does not have to develop and deploy a plan and system, but instead utilizes the efficiency of an existing and well-respected national plan to offer to West Virginia residents.
Any existing New Mexico residents who already have STABLE Accounts will automatically be transferred over to the new West Virginia program and will get the benefit of the lower asset fees offered to West Virginia residents.
Nothing else will change about their account – they can still use their existing log-in and debit card.
A program of the West Virginia State Treasurer’s Office

4. Benefits of WVABLE
Provides financial independence for people with disabilities
Account is owned by the individual with the disability
Dramatically increases ability to save
Before ABLE, individuals could only save around $2,000 of their own money before risking loss of health care and other benefits
Provides new investment opportunity
Tax free earnings
A program of the West Virginia State Treasurer’s Office

5. Who Can Use WVABLE? Limit of one account per person
Individuals with disabilities that occurred prior to age 26
Must be a West Virginia resident
Must also meet one of three criteria:
Eligible to receive SSI or SSDI due to disability;
Have a condition listed on SSA’s “List of Compassionate Allowances Conditions”; or
Self-certification
Eligibility Quiz is a quick series of Yes or No questions that will tell you if you are eligible to open an account.
Age 26 cut-off: This means that the disability had to have begun before age 26. You do not have to have been formally diagnosed before age 26. You also do not have to open the account before age 26. You could have someone who developed a mental illness at 25, was not diagnosed until 30, and did not open their STABLE Account until 35.
Age 26 cut-off was set by Congress due to the score of the ABLE Act. It is an arbitrary age that was set to keep the “cost” of the bill (in terms of lost tax revenue, since this allows tax-free savings) below $2B.
SSI = The Supplemental Security Income (SSI) program pays benefits to disabled adults and children who have limited income and resources. SSI benefits also are payable to people 65 and older without disabilities who meet the financial limits.
SSDI = Social Security Disability Insurance (SSDI) pays benefits to you and certain members of your family if you are "insured," meaning that you worked long enough and paid Social Security taxes.
The “1 Account” limit is a national limit (a beneficiary cannot have an account in WV plus an account in Florida, nor can you have 2 accounts in WV)
Paths to eligibility: #1-2 means that there is some definitive determination from the federal government that you have disability that qualifies. If you don’t fall into that category, it’s OK! You do not have to be receiving SSI or SSDI benefits to be eligible for a STABLE Account. You can still “Self-Certify” that you have a disability.
The List of Compassionate Allowances Conditions is a list of types of terminal illnesses and other conditions (i.e. cancers, etc.). (Google it to view.)
A program of the West Virginia State Treasurer’s Office

6. Self-Certification
Need diagnosis of a physical or mental impairment that causes “marked and severe functional limitations”
Such as conditions in the SSA’s Blue Book
Certify that the condition has lasted or is expected to last for at least one year
Input physician name, address, date of diagnosis
Do not need to send in written diagnosis, but must have on hand
If you are self-certifying, we have to ask for a few more pieces of information.
“Marked and severe functional limitations” is the same standard that Social Security uses for SSI and SSDI determinations. We typically describe this as not being able to do the same day-to-day activities that your peer of the same age is doing. Google the SSA’s “Blue Book” for a listing of conditions that the SSA says per se qualify as causing “marked and severed functional limitations” – e.g. down syndrome, autism, anxiety disorders, neurological conditions, etc. etc. Conditions that are equal in severity to those listed in the Blue Book also qualify, even if they are not included by name in the Blue Book.
Only caveat is temporary disabilities do not qualify. Your disability has to have already lasted for 12+ months, or you expect that it will last for 12+ months.
We do ask for your Dr.’s name and info. This is for the audit purposes, we don’t call them when you sign up or anything. Also this does not have to be the physician who diagnosed you. It can be your current physician.
Additional info (not mentioned directly on the slide): Because this is an IRS program, the IRS wants everyone to recertify that they have a qualifying disability every new tax (calendar) year. Obviously, this is unnecessary for people with permanent disabilities (e.g. incurable or congenital conditions, like Down Syndrome, etc.) We do not have to ask a parent whose child has Down Syndrome every new year whether their child still has Down Syndrome – this is an unnecessary burden on the family. We’ve removed this burden by asking enrollees up front whether their disability is permanent. If they mark “Yes,” we do not require them to go through an annual recertification process.
A program of the West Virginia State Treasurer’s Office

7. Enrollment Online Enrollment Free - takes approx. 20 minutes
$50.00 minimum opening deposit
Can be done by individual with disability (“Beneficiary”) or an Authorized Legal Representative (ALR)
ALR = parent, conservator (guardian), power of attorney
B1: Even though it is offered online, a paper copy of the enrollment form can be requested, however, there is a $50.00 processing fee and all fund management (withdrawals, changing investment options, etc.) can only be done electronically (online)
B2: A YouTube video has been created with a resident in California with CP enrolling in 19 minutes using only 1 finger to type. However, even if they do need to stop the application process to get more information or clarification the STABLE Account Plan system will save where they are in the process so they do not have to start over. They just use the same login and password they created when starting the application. The login and password are what they will also use to maintain the account.
ALR – cannot be Representative Payees or Trustees of a Special Needs Trust, unless those people are also parent, guardian or power of attorney. [Representative Payees are SSA representatives whose job it is to accept and spend SSI monies for folks who cannot manage their own finances. See for more info.] Rep payees often express frustration that the IRS regulations do not allow them to be an ALR for a STABLE Account. This rule may change when the IRS issues final regulations, but it is currently the law. This is NOT a our own internal STABLE policy, it is federal law, so we cannot change it. Families can call IRS contact Taina Edlund if they would like to comment on the regulations.
A program of the West Virginia State Treasurer’s Office

8. Funding your Account Contributions
Via Electronic Funds Transfer or check
$15,000 annual limit
$27,140 annual limit if employed
$468,000 lifetime limit
System automatically rejects excess contributions
Gifting
Create an eGift Event (birthday, holiday, etc.) ~ system will send out an to friends and family
System tracks contributors for sending thank you notes/replies
$15,000 and $462,000 are contribution limits, so your balance can grow higher than these numbers.
The annual limit is a hard stop - once you’ve put in $15K, you’re done for the year, and cannot contributed any more, even if you spend down your balance to below $15K.
Note that the $15K limit is tied to the gift tax limit, so it typically is adjusted every two years. It last increased to $15K in 2018.
If a beneficiary is employed he/she may contribute up to an additional $12,060 of employment earnings to an account bringing the total maximum yearly contribution limit for employed beneficiaries to $27,060 per account. (employment contributions option coming soon)
The lifetime limit is a little more flexible. You can hit the limit, spend down, and then replenish with more contributions. For instance, once your balance hits $462,000, you can no longer make any new contributions to the program (although your earnings can continue to accrue). BUT if you spend your balance down to less than $462,000, you can resume making contributions. This is meant to be a lifetime product.
Different states have different lifetime limits. A state’s lifetime limit is tied to the state’s 529 college savings plan limit. STABLE Accounts are subject to Ohio’s lifetime limit (one of the highest in the country). This limit also adjusts periodically, so will increase from time to time.
System rejects excesses – you don’t have to keep track of your own contributions! We do it for you…if you try to contribute too much, we will kick it out. (i.e. if grandma sends in a check for $20,000, we will take $15,000 and apply it to your account and send grandma a refund check for the other $5,000 excess.)
Gifting – You upload addresses for family and friends. The system will generate a with a special link that allow family/friends direct access to contribute to your account. System also keeps track of who contributed so you can send a thank you message.
A program of the West Virginia State Treasurer’s Office

9. Investment Options
Four Vanguard mutual funds that range from aggressive to conservative
One FDIC-Insured Option
Principal protected
There are four target risk funds (low risk to high risk), offered through Vanguard, and one FDIC insured option…
The Vanguard LifeStrategy Income Fund allocates approximately 80% of its assets to bonds and 20% to common stocks.
The Vanguard LifeStrategy Conservative Growth Fund allocates approximately 60% of its assets to bonds and 40% to common stocks.
The Vanguard LifeStrategy Moderate Growth Fund allocates approximately 60% of its assets to common stocks and 40% to bonds.
The Vanguard LifeStrategy Growth Fund allocates approximately 80% of its assets to common stocks and 20% to bonds.
The FDIC-Insured Option is much like placing your money in a personal checking or savings account… this is not an investment account and you would not expect to see interest / growth
DO NOT GIVE INVESTMENT ADVICE OR SUGGEST WHICH FUNDS MIGHT BE GOOD FOR WHICH TYPES OF PEOPLE
You can select one and put 100% in it, or you can spread out your investment anyway you want to so long as the total adds up to 100% (which the system interface will show you as you enter the selections onscreen).
A program of the West Virginia State Treasurer’s Office

10. How can you spend STABLE funds?
Withdrawals must be used on “Qualified Disability Expenses”
Anything that (1) relates to your disability and (2) helps to maintain or improve your health, independence, or quality of life
Examples:
Housing and Rent
Basic Living Expenses
Medical/Financial/Legal Bills
Education
Transportation
Assistive Technology
Others
Very broad range of qualified expenses
Trust Attorneys (Trustees) appreciate this because the STABLE Account has more broad spending ability than a trust
We (the State/the STABLE program) do not make the final determination of whether a particular expense is/is not “Qualified.” The IRS does that. (You will get a LOT of questions along the lines of … “Is XYZ a qualified expense?”) The IRS regulations give us a non-exhaustive list (some of which is included on this slide, but the entirety of which is on our website). If something is not included in that list, all we can do is give our best guess as to how the IRS would answer the question of whether something is a QDE or not. At the end of the day, if the account holder is audited, they will have to explain to the IRS how expense XYZ met the 2-part test outlined on this slide. We do not expect the IRS to be draconian in its determinations – it is not in the business of determining what is necessary or unnecessary for any particular disability, so expect a generous interpretation, but always be prepared to defend your expenses. For example, we are frequently asked if a vacation is a QDE. The best we can answer is that it MAY be considered a QDE, but all expenses are justified using IRS’ standard against the definition provided
Specific questions regarding an IRS’ stance on an expense could be directed to the IRS
A program of the West Virginia State Treasurer’s Office

11. Non-Qualified Expenditures
Not illegal, but there are consequences
Affects Benefits
The amount of the expenditure may now be considered a countable resource (but not necessarily)
Tax Penalties
Pay taxes plus 10% penalty on the earnings portion of the withdrawal
Example: You contribute $90 to your account, and you make $10 in earnings – your balance is now $100. You withdraw that $100 but do not use it for a QDE. You must pay regular income taxes on the $10 of earnings, plus an additional10% penalty on that same $10.
If STABLE funds are spent on a non-qualified expense… you will not go to jail . This is YOUR money, and you can spend it on anything you want…just be prepared for possible consequences. (Analogy to perhaps withdrawing money early from an IRA or other retirement account…it’s not illegal, but it could have tax or other consequences.)
Non-QDE’s are generally considered gifting/giving funds to another person for their use, alcohol, tobacco, gambling, and mature-entertainment
Affecting benefits: It MAY affect your benefits – but most federal agencies have not yet put out guidance on this. Normally, when you withdraw money for a QDE, that withdrawal is still sheltered; i.e., even though it is technically “out” of the STABLE Account, is still does not count as a asset for purposes of determining someone’s benefits. That MAY not be the case, though, if you withdraw money for a non-QDE. Nothing in the ABLE law requires benefits agencies to treat non-QDEs as a countable resource (“asset”), but the agencies can do so if they choose. Social Security and Medicaid have put out guidance on this so far. Social Security and Medicaid have said non-QDEs will not affect benefits unless you keep them from one calendar month to the next. So if you withdraw $500 for gambling (non-QDE) on January 15th, that $500 is still ignored by Social Security and Medicaid so long as you spend that $500 by January 31st. If you still have it as of Feb 1, though, then Social Security treats that $500 as a countable resource and counts towards your asset limits – and could put you over your limits for SSI eligibility. Medicaid, on the other hand, will count the $500 as a resource only in the month it was spent on a non-QDE. In this scenario, assuming the withdrawal was spent in June on a non-QDE, Medicaid would not count the $500 as a resource until the month of June even though it was withdrawn in January.
Arguably, the tax penalty is small because you are penalized on the interest earned for the portion spent on a non-QDE. If no interest is earned, then it is possible that the tax penalty would be $0 + (10% of $0) = $0. The bigger consequence for people will be the affect on benefits.
A program of the West Virginia State Treasurer’s Office

12. Spending From Your Account
Withdrawals
Free + No Limits
WVABLE will not ask what you spend on, but benefits agencies and IRS can
Transfer to personal checking or savings
Third-Party Check
Transfer to STABLE Card
Some people are using STABLE Accounts for long-term investments and do not spend out of the account often, while others use it as a very transactional account (spenders vs. savers)
IRS is the entity that would be auditing ABLE accounts
They would do this as part of normal tax audit process – if your return is chosen for audit, they’ll look at your STABLE Account along with any other things in your return
A program of the West Virginia State Treasurer’s Office

13. STABLE Card Loadable debit card Does not pull from account
Online spending records + notate expenses
No commingling of funds with other accounts
Protection – limiting of merchants, no cash access, no overdraft
Text alerts to monitor spending, low balances
The STABLE card is for the spenders
Can be used anyplace MasterCard is accepted.
Card is free for all account holders to get – but you do have to request it (it’s not automatically sent out). You can request it online during your account enrollment or later on at card.stableaccount.com/enroll
Card is also nearly fee-free to use – the only usage fee occurs if you use your PIN number to make a purchase – then there is a 50 cent charge. You can avoid this entirely; if you simply sign for your purchase rather than put in your PIN number, transactions are free!
What does “loadable” mean? It’s a prepaid card, similar even to a reloadable gift card. You log in to your STABLE Account, ask for a withdrawal of, say, $100, and then select that you want the $100 loaded onto your STABLE Card. Then when you go to CVS to use the Card, there is only $100 on it to spend.
The loadable spending portion helps protect against fraud, and is an added protection for people who may be vulnerable. This way, you don’t have to worry about your loved one having access to all of the funds in the account at once. So if there is $10,000 in your account, there is no danger of your loved one being taken advantage of or accidentally spending all $10,000 at once. If spending vulnerabilities are not a concern for you, then use the card however you want – you can load up to $15,000 onto it at any one time.
Online spending records also help in case of audit. You can set up an online account (similar to your regular online banking portals) for your card. It tracks every expense you make, allows you to write personal notes (e.g. “This $10 at CVS was used to purchase a prescription that I use to treat my condition”) on every single transaction line, and allows you to categorize every expense line as either a QDE or a non-QDE. This makes recordkeeping and reporting really easy. You can print off your entire history and hand it over to an auditor or benefits agency if necessary.
We wanted it to be loadable because parents and guardians wanted to give their children financial independence, but not too much access (where they could use too much money at once or be open to being taken advantage of, etc.). This is similar to putting a set “allowance” on the card for them and very useful for “money management skill development”
The only way you can load money onto the card is from your STABLE Account. This is great for recordkeeping and for accounting to benefits agencies, because they know that the only money on this card is STABLE money. If you are withdrawing money to an external bank account, it’s much harder to track because it sits in the bank account along with other variety of monies.
We’ve also limited the types of merchants that you can use the card at, for extra protection. The card will not work at online gambling establishments or adult entertainment establishments.
You cannot withdraw cash with the card. We did this intentionally, since cash makes people more vulnerable and makes recordkeeping difficult. Of course, account holders can always request a check withdrawal from their account, or a transfer to an external checking account, if they need cash.
You cannot overdraft with this card (no extra fees!!). If there is not enough money on the card to complete a purchase, the card simply will decline. Again, extra protection for PWD.
A program of the West Virginia State Treasurer’s Office

14. SSI Considerations
Balances over $100,000 count as a resource – but SSI merely suspended, not terminated
(Your account balance will not affect Medicaid benefits, though, regardless of the amount)
If you hold on to the money from one calendar month to the next, then housing expenditures and non-qualified expenditures count as resources
Beneficiary’s own wages still count as income even if contributed to a WVABLE account
Remember, the rules on this slide ONLY apply to SSI.
$100,000 limit
Even with a $100,000 resource limit for those receiving SSI… this is much higher than the historically low $2,000
How this works: Any balance over $100,000 counts as an asset. So if you have $101,000 in your STABLE Account, SSI only counts that as $1,000 of assets.
If your SSI is suspended because of this, it’s like a switch – your benefits stop for any months in which your balance is too high. But if you spend down to, say, $90,000, your benefits will automatically resume. You do not have to “reapply” for SSI – you will just need to notify Social Security that your balance is now lower.
For SSI purposes (and likely other programs), ABLE accounts are “asset shields” not “income shields”
Most benefits programs have two thresholds people have to meet: (1) an asset (“resource”) threshold and (2) and income threshold. Your assets must be below a certainly amount and your income must be below a certain amount. STABLE helps people exceed typical asset limits, but does not change or assist people overcome current income limits
So once money is put into the account, it is not an asset. But if you contribute your own earned income, it still counts as earned income on the front end – at least for SSI.
The ABLE law is broad enough that other agencies could put out a different interpretation; for example, Medicaid could (but has not yet) say that earned income, if contributed directly to a STABLE Account, does not count towards someone’s income limits. In other words, if you make $1,000 a month, but you put $600 of that into your STABLE Account, you really only have $400 of countable income. No one has yet put out this interpretation, but the law allows agencies to go either way.
Remember: gifts or contributions from 3rd parties to your STABLE Account do not count as income anyway
Quirk regarding housing and non-QDEs
Example: If you take out $1000 for rent on June 15, you MUST give that money to your landlord by June 30th. If you still have the money in hand on July 1st, the $1,000 is now a countable resource. Same thing if it’s a non-QDE. As long as you spend the money in the same month you withdraw it, SSA does not care what you spend the money on – it’s always sheltered and not countable
A “work-around” to accommodate this housing expenditures quirk may include:
Paying next month’s rent early (landlords typically will accept this ). For example, rent is due on June 1, so funds taken out in May and delivered to the landlord on 5/31 (or before) are fine
Have a third-party check sent by STABLE to the landlord – so you never have possession of the money, it’s sent directly to landlord and you don’t have to worry about month-end issues
Good benefit: Typically, rent “subsidy” paid by parents is considered an “in-kind support” for SSI and will reduce someone’s SSI benefits. However, if a parent contributes to a STABLE account and then the funds are used through the STABLE account to help pay rent, this is no longer considered an in-kind support and SSI benefits are not reduced
A program of the West Virginia State Treasurer’s Office

15. If Account Holder Passes Away
Account will pass to the account holder’s estate
The estate administrator notifies STABLE to take over account access and then go through normal probate process
No designated transfer upon death
The estate can first:
Pay any outstanding bills for QDEs
Pay for funeral and burial expenses
Deduct Medicaid Buy-In premiums you paid
At this time, Medicaid does not intend to file a claim against the STABLE account for any Medicaid expenses incurred after the ABLE account was opened
However, BMS will recover payments from the estate of Medicaid recipients, age 55 or older, having nursing home and/or community based waiver services per the WV Estate Recovery Program
For more information, go to
There is no transfer on death nor is there a “designated beneficiary” with STABLE Accounts. The only permissible transfer is to a sibling with a disability. Otherwise the account goes to the individual’s estate like any other property the individual owned. The estate administrator can send us paperwork and gain access to the account.
Payback: Medicaid needs to come to STABLE first to request the money and make a claim against the STABLE Account (they cannot reach “around” us to get to the account).
Key points: Medicaid payback is not unique to STABLE. If you received Medicaid during your lifetime, Medicaid can come after your estate. This is just sometimes the first time people find out about Medicaid payback, so they think it is specific to STABLE. It isn’t. In fact, money in your STABLE Account is better protected than money in any other bank account, because Medicaid is restricted in terms of what it can take from a STABLE Account.
You may get questions about how an estate is managed, including remaining funds in a STABLE Account after Medicaid recovery and final / outstanding expenses are paid.
You cannot name a successor beneficiary for your STABLE Account
Remaining funds can be distributed by the probate court administering the decedent’s estate
Recommend seeking legal advice for life planning, including financial planning
Medicaid recovery out of an ABLE Account will be for the sum of all Medicaid services offered after the ABLE Account was opened. Example: You had surgery when you were 30, and Medicaid paid for it. You opened a STABLE Account at 35. Medicaid payback against the STABLE Account cannot include the surgery, because you did not have the STABLE Account opened at the time of that payment.
You can also approximate this amount Medicaid could ask for payback on by adding together service costs, or by asking your state Medicaid office for an accounting. In the DD community, many people know the cost of their Medicaid Waiver Services because they sign a document as part of the individual service plan each year that discloses the full value/budget of those services.
You may receive questions about Medicaid Buy-In here (because people often have general questions about their public benefits, especially Medicaid)
The Medicaid Buy-In program is an optional State Medicaid benefit group for workers with disabilities who have earnings in excess of traditional Medicaid rules. So people with disabilities who would be ineligible for Medicaid because of earnings can work and access the services and supports they need. Ideally, it means workers with disabilities do not need to choose between healthcare and work.
A program of the West Virginia State Treasurer’s Office

16. Account Cost Monthly Maintenance Fees Asset-based Fees
$3.50 ($42.00 Annually)
Between 0.19% and 0.34%
Minimum deposits are common for financial accounts
Fees are necessary to sustain the program and are common for financial and investment products
Percentage for asset fee comes from choice of investment. 0.34% is a cap
EXAMPLE: So if the underlying investment is making 5%, your account is credited with (5% - .19% = 4.81%)
A program of the West Virginia State Treasurer’s Office

17. STABLE & Special Needs Trusts
Complementary tools can be used together
Unique STABLE Accounts benefits:
Cost-Effective
Broader spending power (i.e. housing)
Easy account access
No federal or state income tax on earnings
No separate tax returns to file
Can be established, administered, and owned by individual with disability
SNT = Special Needs Trust
We need to use all the tools that work best for the beneficiary, this is an addition to the tool box. For some that have SNTs in place, this still may be a helpful addition.
SNT Attorneys/Trustees appreciate the STABLE Account because:
It can be used for smaller amount ($15K and less) that may otherwise be largely consumed by the start-up cost of a trust
SNT can fund a STABLE Account and spending can be done out of the STABLE Account, eliminating the tedious process of paying for expenses out of a SNT
Rent can be paid out of the STABLE Account, but not out of a SNT. However, a SNT can fund a STABLE Account and then be used for rent.
A program of the West Virginia State Treasurer’s Office

18. Helpful Resources Customer Service team@stableaccount.com
Mon.– Fri., 9 a.m.– 8 p.m. EST
A dedicated group of staff exist to simply answer the questions you may have when you leave this presentation and throughout the lifetime of your STABLE Account
This contact information is also on our webpage
If possible, it is good to offer to stick around after a presentation to answer specific/personal questions people may have about their life situation and how STABLE may work for them

19. Spread the Message Find us on Facebook: @wvtreasury
Find us on Twitter:
@wvtreasury
Help us spread the WVABLE message.
Follow us, “like” us, and send us your thoughts.
A program of the West Virginia State Treasurer’s Office