Who Can Set Up the ABLE Account?

ABLE accounts, new tax-free saving accounts for people with disabilities, hold great promise for special needs planning. But among the many questions surrounding ABLE plans is who can open accounts?  Only the person with a disability? Parents?  Other relatives? Friends?

Created by Congress via the passage of the Achieving a Better Life Experience (ABLE) Act in 2014 and modeled after popular 529 college savings accounts, ABLE accounts allow people with disabilities to save for disability-related expenses while maintaining eligibility for Supplemental Security Income, Medicaid and other government benefits. People can save up to $15,000 annually, up to a maximum $100,000.   Nearly every state in the country has passed legislation enabling people with disabilities and their families to open these new savings accounts.

So who is allowed to actually open an account?  ABLE accounts can be set up either by the account beneficiary (the person with disabilities), or that person’s parent, legal guardian or another person with power of attorney.

If beneficiaries set up the accounts, however, they must not be a minor, meaning they are age 18 or older, and not have cognitive disabilities that would prevent them from being able to do so.

One limitation on ABLE accounts, however, is the ABLE Act’s strict definition of a qualifying disability. In order to be the beneficiary of an ABLE account, the person’s disability must have begun prior to the age of 26.  This excludes many people with disabilities that formed later in life, such as many individuals with chronic conditions or disabilities resulting from car crashes or other incidents.  The ABLE Age Adjustment Act, currently before both houses of Congress, would raise the onset-of-disability age from 26 to 46.

If you want to set up or contribute to an ABLE account for yourself or a loved one, talk to your special needs planner today.

For more on ABLE accounts, including fact sheets, articles and short webinars, visit the ABLE National Resource Center.

 

It’s Open Enrollment Season: Is Your Medicare Plan Still Working For You?

Do you have the right Medicare plan? It is fall, which means it is time to think about whether your current plan is still giving you the best coverage or whether a new plan could save you money or offer better coverage. Medicare’s Open Enrollment Period, during which you can freely enroll in or switch plans, runs from October 15 to December 7.

During this period you may enroll in a Medicare Part D (prescription drug) plan or, if you currently have a plan, you may change plans. In addition, during the seven-week period you can return to traditional Medicare (Parts A and B) from a Medicare Advantage (Part C, managed care) plan, enroll in a Medicare Advantage plan, or change Advantage plans. Beneficiaries can go to www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227) to make changes in their Medicare prescription drug and health plan coverage.

Even beneficiaries who have been satisfied with their plans in 2018 should review their choices for 2019, as both premiums and plan coverage can fluctuate from year to year. Are the doctors you use still part of your Medicare Advantage plan’s provider network? Have any of the prescriptions you take been dropped from your prescription plan’s list of covered drugs (the “formulary”)? Could you save money with the same coverage by switching to a different plan?

For answers to questions like these, carefully look over the plan’s “Annual Notice of Change” letter to you. Prescription drug plans can change their premiums, deductibles, the list of drugs they cover, and their plan rules for covered drugs, exceptions, and appeals. Medicare Advantage plans can change their benefit packages, as well as their provider networks. For information about entering and leaving Medicare Advantage plans, click here.

Remember that fraud perpetrators will inevitably use the Open Enrollment Period to try to gain access to individuals’ personal financial information. Medicare beneficiaries should never give their personal information out to anyone making unsolicited phone calls selling Medicare-related products or services or showing up on their doorstep uninvited. If you think you’ve been a victim of fraud or identity theft, contact Medicare.

Here are more resources for navigating the Open Enrollment Period:

2019 Will Bring Social Security Beneficiaries the Biggest Increase in Eight Years

The Social Security Administration has announced a 2.8 percent increase in benefits in 2019, the largest increase since 2012.  The change will put an additional $468 anually in the pocket of the average retired beneficiary.

Cost of living increases are tied to the consumer price index, and an upturn in inflation rates and gas prices means recipients get a boost in 2019. The 2.8 percent increase is higher than last year’s 2 percent rise and the .3 percent increase in 2017. The average monthly benefit of $1,422 in 2018 will increase by $39 a month to $1,461 a month for an individual beneficiary, or $468 yearly. The cost of living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $128,700 to $132,900.

And there is more good news: Unlike last year’s increase, the additional income should not be entirely eaten up by higher Medicare Part B premiums. The standard monthly premium for Medicare Part B enrollees will increase only $1.50 to $135.50.

For 2019, the monthly federal Supplemental Security Income (SSI) payment standard will be $771 for an individual and $1,157 for a couple.

Most beneficiaries will be able to find out their cost of living adjustment online by logging on to my Social Security in December 2018. While you will still receive your increase notice by mail, in the future you will be able to choose whether to receive your notice online instead of on paper.

For more on the 2019 Social Security benefit levels, click here.

Written by Legacy Planning Law Group

Legacy Planning Law Group is dedicated to working with individuals and families to help protect the assets they have built throughout their life, and make everything simpler for families who have lost a loved one. We help thoughtful people achieve the peace of mind that comes with planning their personal legacy and passing on family harmony.

Written by Legacy Planning Law Group

Legacy Planning Law Group is dedicated to working with individuals and families to help protect the assets they have built throughout their life, and make everything simpler for families who have lost a loved one. We help thoughtful people achieve the peace of mind that comes with planning their personal legacy and passing on family harmony.