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Achieving a Better Life Experience (ABLE) account

Revised date
Purpose statement

This section describes the Achieving a Better Life Experience Act of 2014 (the ABLE Act) and its interaction with the Medicaid program. The establishment and use of an ABLE account enables certain individuals with disabilities to save money in tax-advantaged accounts, which they can later use for meeting their disability-related needs without affecting their Medicaid coverage.

WAC 182-560-100 Achieving a Better Life Experience (ABLE) Act.

WAC 182-560-100 Achieving a Better Life Experience (ABLE) Act.

Effective September 8, 2018

This rule describes a qualified achieving a better life experience (ABLE) account and its effect on the determination of eligibility for Washington apple health coverage.

  1. A qualified ABLE account:
    1. Is established and maintained by a state, or its designated agency or entity;
    2. Meets federal requirements under 26 U.S.C. Sec. 529A; and
    3. Is used to save funds for the disability related expenses of the account's designated beneficiary.
  2. This section applies to ABLE account beneficiaries who:
    1. Are entitled to benefits based on blindness or disability under Title II or XVI of the Social Security Act; or
    2. Meet the blindness or disability requirements under WAC 182-512-0050 (1)(b) and (c).
  3. The disability or blindness described in subsection (2)(a) or (b) of this section must have occurred before age twenty-six.
  4. This section does not apply if the total combined annual contributions to an ABLE account exceed the limit under 26 U.S.C Sec. 529A.
  5. When determining countable income for apple health programs for the account's designated beneficiary, the medicaid agency or the agency's designee does not:
    1. Count contributions made by a person other then the designated beneficiary to the ABLE account;
    2. Count funds distributed from the account;
    3. Count earnings generated by the account, such as accrued interest or dividends; or
    4. Reduce income used to determine eligibility by the amount of contributions made to the account, including any funds the designated beneficiary may contribute to it.
  6. When determining eligibility for apple health programs, the agency or the agency's designee excludes as resources:
    1. The value of an ABLE account, including any earnings generated by the account; and
    2. Subject to subsection (8) of this section, distributions from the account for qualified disability expenses as long as the beneficiary:
      1. Maintains an ABLE account;
      2. Contributes to an ABLE account; or
      3. Receives distributions from such ABLE account.
  7. "Qualified disability expense (QDE)" means any expense related to the beneficiary's blindness or disability that is made for the benefit of the beneficiary, including the following expenses:
    1. Education;
    2. Housing;
    3. Transportation;
    4. Employment training and support;
    5. Assistive technology and personal support services;
    6. Health;
    7. Prevention and wellness;
    8. Financial management;
    9. Legal fees;
    10. Expenses for oversight and monitoring; and
    11. Funeral and burial expenses.
  8. Distributions under subsection (6)(b) of this section, which are retained into a subsequent calendar month:
    1. Remain excluded as resources as long as the distributions are identifiable and the beneficiary still intends to use the distribution for a QDE;
    2. Are available resources on the first day of a subsequent calendar month if the intent of the beneficiary changes such that the beneficiary will not use the distribution for a QDE; and
    3. Are available resources on the first day of any subsequent month when the distribution is actually used for a non-QDE.
  9. The agency or the agency's designee counts as a resource on the first day of the following month any funds distributed for purposes other than paying a QDE expense described in subsection (7) of this section.
  10. If the beneficiary has multiple ABLE accounts, the agency or the agency's designee applies this section to the first ABLE account established.
  11. Funds remaining in the ABLE account when the beneficiary dies are subject to estate recovery under chapter 182-527 WAC, less any:
    1. Outstanding QDE debts; and
    2. Premium payments made from the ABLE account on behalf of the beneficiary to obtain coverage under the apple health care for workers with disabilities described in WAC 182-511-1000.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.


The ABLE Act amended the Internal Revenue Code of 1986 to create section 529A (“Qualified ABLE Programs”), permitting states to establish ABLE programs within which people with disabilities can open accounts that will generally be exempt from taxation. The purpose of the ABLE Act is to permit people with disabilities to save money in and withdraw funds from their ABLE accounts to pay for disability-related expenses, in support of their efforts to maintain health, independence and quality of life. The law states that ABLE accounts should “supplement, but not supplant” benefits available to ABLE account beneficiaries under Medicaid, the Supplemental Security Income program (SSI), and other programs.

Eligibility to participate in a qualified ABLE program

Section 103 applies to individuals who have an ABLE account in a qualified ABLE program. Eligibility for an ABLE account is open to an individual of any age who has blindness or a disability, provided, however, that the individual’s blindness or disability occurred before the age of 26. An individual is permitted to have only one ABLE account. The individual may open the account in the program of the state of which the individual is a resident, or in another state’s ABLE program. The determination of eligibility for an ABLE account is the responsibility of the ABLE program in which an individual seeks to establish the account.

Under section 102(a) of the ABLE Act (codified at 26 U.S.C. §529A(e)), an individual is eligible for an ABLE account if the individual is receiving SSI or Social Security Disability Insurance (SSDI) benefits based on a disability or blindness that occurred before age 26. Alternatively, an individual (or a parent or guardian acting on the individual’s behalf) may establish eligibility by filing a disability certification (and obtaining a signed physician’s diagnosis) with the qualified ABLE program indicating that the individual has a medically determinable impairment meeting certain criteria that occurred before age 26. However, while sufficient to establish eligibility to participate in an ABLE program, section 102(a) of the ABLE Act provides that “no inference” may be drawn from a disability certification for purposes of establishing eligibility for Medicaid.

Contributions to ABLE accounts

Contributions by a third party

For MAGI and SSI-based eligibility determinations, under section 103, third party contributions to an ABLE account are disregarded in determining Medicaid eligibility. This is different from the treatment of such contributions in determining financial eligibility using SSI-based methodologies and, in narrow circumstances, different from the treatment of such contributions under MAGI-based methodologies.

Under SSI-based methodologies, applied to most non-MAGI eligibility groups, money contributed by a third party to an account which an individual can access generally is considered countable income in the month in which the contribution is received and, if not spent, a resource in the month following. Per section 103, however, third party contributions to an ABLE account are not either counted as income or included in total resources of the account beneficiary.

Some ABLE account beneficiaries may also be a beneficiary of a special needs trust (SNT) or pooled trust, as described in section 1917(d)(4) of the Act. Distributions from such trusts made on behalf of the trust beneficiary to the beneficiary’s ABLE account should be treated the same as contributions to ABLE accounts from any other third party. While disbursements from an SNT or pooled trust can be considered in some circumstances as income to the trust beneficiary, disbursements from an SNT or pooled trust to the ABLE account of the trust beneficiary are not counted as income under section 103. Therefore, states should disregard as income a distribution from an SNT or pooled trust that is deposited into the ABLE account of the SNT or pooled trust beneficiary.

Contributions by the ABLE account beneficiary

Designated beneficiaries of an ABLE account can contribute their own income or resources to their ABLE account. If an ABLE account beneficiary transfers some of his or her own (otherwise countable) resources to his or her ABLE account, the effect would be a corresponding reduction in total countable resources. By contrast, if a beneficiary of an ABLE account transfers some of his or her income in the month received to his or her ABLE account, the effect would not be a reduction in countable income. This is because how an individual uses income generally does not change its designation as income at the point of its receipt, and there is nothing in the ABLE Act that supersedes this general rule.

Contributions by third parties who apply for Medicaid

A third party who has contributed to an ABLE account of someone else may apply for Medicaid and seek coverage of long-term services and supports (LTSS). Section 103 of the ABLE Act does not provide for any special treatment of contributions made to an ABLE account benefiting another person. For example, a contribution from a grandfather to the ABLE account of his grandchild, whether from the grandfather’s income or resources, would constitute a transfer of assets from the grandfather to his grandchild’s account. The transfer may need to be evaluated under the requirements in section 1917(c)(1) of the Act (depending on when the transfer occurred), if the grandfather subsequently seeks Medicaid coverage of LTSS. The amount transferred by the grandfather to his grandchild’s ABLE account would not be an exempt transfer by virtue of section 103 in the determination of the grandfather’s eligibility for Medicaid coverage of LTSS.

Distributions from ABLE accounts

Like funds in and contributions to ABLE accounts, distributions from ABLE accounts are not included in the beneficiary’s taxable income or counted as income in eligibility determinations for federal programs such as Medicaid as long as they are used for “qualified disability expenses” (QDEs). Section 529A(e)(5) of the Internal Revenue Code broadly defines QDEs as any expenses related to the eligible individual’s blindness or disability which may include, but are not limited to, expenses incurred for education, housing, transportation, employment training and support, and assistive technology.

Treatment of distributions exceeding QDEs for non-MAGI determinations

For individuals whose financial eligibility is determined using SSI-based methodologies, receipt of cash from a resource, whether the resource itself is counted or excluded, generally is not considered to be income, but rather the conversion of a resource from one form to another. The protection afforded under section 103, however, does not require that distributions from an ABLE account be used within the month the distribution is made, or within any particular timeframe. Accordingly, a distribution from an ABLE account may be countable as a resource only if (1) it is retained beyond the month in which the distribution is made and (2) it is used for something other than a QDE in that or a subsequent month. Section 103, then, means that ABLE account distributions retained after the month of receipt are disregarded unless used for a non-qualifying expense.

For example, if an SSI-based individual receives an ABLE account distribution in August, but does not spend the distribution until December (and uses the distribution for a QDE in that month), the amount of the distribution is not counted in any month. If the individual uses the distribution in December for a non-QDE, the distribution would be counted as a resource in the month of December.

Post-eligibility treatment of income

Typically, all income is taken into account for purposes of post-eligibility treatment of income (PETI), including types or amounts of income that are not counted in making an initial eligibility determination. Distributions from an ABLE account that are used for a QDE, however, are disregarded when determining countable income for purposes of PETI.

Worker responsibilities

ABLE – eligibility and qualified disability expenses (QDEs)

The ABLE program that administers the program is responsible for facilitating an accurate determination of eligibility for an ABLE account. They also are involved in the process of the account holder’s use of funds in an ABLE account for qualified disability expenses (QDEs). Eligibility staff are not responsible for obtaining documentation of a client’s ABLE account, and will not monitor them for potential impact(s) on eligibility. If it becomes known that a client did not use funds withdrawn from their ABLE account for a QDE, the value amount is not counted retroactively. It would be counted only if it is anticipated and after advance notice could be given. There is no requirement that the client provide a copy of their ABLE account for the determination or renewal for eligibility. If one is received, see information on notifying the Office of Financial Recovery below.   

Notifying the Office of Financial Recovery (OFR)

Should staff receive a copy of a client’s ABLE account, notify Ken Washington of OFR via a Barcode tickler when any ABLE Account is imaged in the electronic case record. Set up the following DMS tickler:

  • Document type for tickler: TD
  • Subject: ABLE account
  • Site: 101
  • User: WAKE
  • Ready date: Default date is fine

Make sure the ABLE account is indicated on the appropriate person’s resource screen in ACES. Add in the remarks that OFR has been notified of the account in the ECR. An ABLE account is an excluded resource, but if the state files a claim, any amount remaining in the account is subject to estate recovery.

More information can be found on the Washington State ABLE Savings Plan website.