Friday, May 08, 2015

ABLE or Not, Here it Comes

Friday, May 08, 2015

              "When you choose an action, you choose the consequences of that action”
-         Cordelia Vorkosigan

Now that the post legislative tidal wave of vigorous celebration and self-congratulations has diminished to a social media driven drumbeat of rah-rah’s as each state assumes its responsibility in the design and implementation of its own 529A plan; a.k.a., The ABLE Act, some historical perspective is in order.
The original concept of the plan began in quiet obscurity in the Congressional offices of Representative Ander Crenshaw of the 4th District of South Florida. After listening to the concerns of several constituents, all parents of children with unique lifetime care needs, he and his able staff began the process by researching the issues surrounding this unique population. His Chief of Staff, John Ariale, and top Legislative Assistant, Dustin Krasny, reached out to the many available resources of the federal bureaucracy in the pursuit of accurate information about the current approach to providing benefits and opportunity to those in the disability community. In the spirit of full disclosure, this author became one of those resources.
My contribution to the cause can be summed up by the following:
       Financial Liberation for those with Special Needs:
Current Problems:
•   Benefit rules and laws are state specific and ever changing;
•   It is expensive to establish traditional trusts to maintain eligibility;
•   The rules are complicated for those that work and receive benefits;
•   It can be difficult for others to contribute to the care of a person with unique needs;
•   The current system offers little chance for a beneficiary to achieve true independence if asset development is limited and/or complex;
•   The ever present likelihood of running afoul of current income and asset deeming rules create financial hardship and require expensive legal solutions for those least able to afford them;
•   The rules to operate special needs trusts are complex and the costs to manage them, including taxes, are often excessive; and,
•   There are no incentives for traditional advisors to assist this population and far too few experienced ones to address the need.

After spending time in multiple meetings, plus numerous emails, explaining the details of these items, I returned to regular life and the episode faded in memory.
Then, in April 2008, it all came rushing back as I read the initial draft of the ‘‘Financial Security Accounts for Individuals with Disabilities Act”, the first iteration of what is now the ABLE Act. I had been invited by Mr. Ariele to attend a meeting at their Congressional office to discuss the recently introduced bill. I immediately fired off an email accepting the offer and to congratulate them with what I called an “evolutionary” bill. The issues discussed in that meeting dealt primarily with the prioritizing of the main components of the bill as they prepared to begin brokering for support to take the bill to the next level. They did push forward and by the end of that session had garnered the support of 85 cosponsors; however, the bill languished and died in committee.
On July 22, 2009, Congressman Crenshaw reintroduced HR 1205; now the Achieving a Better Life Experience Act. My comparison of this new version revealed a number of changes, but most were on the margins and it still held promise as a real game changer. The promising new aspect was that several companion bills in the Senate (S 2743 and S 2741) had been sponsored by Senators Casey, Hatch and Dodd, with Brownback and Kennedy also looking to become involved. With this much new high power support it seemed that there might be light at the end of a hopefully short tunnel and that this deal would be done in quick fashion.
Always the optimist, I discussed these positive activities with an associate who had 40 years of governmental experience and he quickly, and correctly, poured water on my fire of enthusiasm. His words of wisdom went something like “the bigger the guns, the heavier the opposition”. Although I had learned to trust his judgment I was somewhat skeptical about this outlook. About six months later I was forced to lay my optimism aside as it became evident that there were large competing forces attempting to mold this bill to fit their particular objectives and each had their own flag bearer firmly entrenched in the legislative action.
So what accounts for the five year delay in finally having a bill brought to the House and Senate, where it received almost unanimous approval, and then the in short order, to the White House for the President’s signature? In each of those years the bill had over 300 cosponsors from both sides of the aisle, and in the later years, lots of daily press from the different advocacy groups around the country.
During the next legislative sessions most of the activity surrounding the bill dealt specifically with political ideologies and protecting well-funded business interests. I was fortunate to have access to a bimonthly side-by-side breakdown of all of the active bills, including an updated analysis and working group consensus report. The delay, in fact, was not due to any overt objection to the bill itself, rather to its impact on certain organizations in general.
Some groups, like the national and state bar associations, were concerned that ABLE might be detrimental to certain specialized members who derived their income for work they performed in the special needs area. The question was asked whether these accounts would preclude the use of special needs trusts or would structured annuities become a thing of the past in the personal injury world. Banks and trust companies could envision billions of dollars being managed outside of their control. And, national nonprofit advocacy groups envisioned a gold mine if they could somehow become the primary gatekeeper for this potential financial bonanza.
As time went on all of these issues were apparently dealt with using reason, political efforts and certain changes in the bill itself. Yet by the end of 2013, now with over 300 cosponsors, ABLE still languished in committee.
The ultimate answer to what changed during the 2014 legislative session is probably very complex - but I have a much simpler and unprovable explanation to offer, and a suggestion of what is to come.
The Social Security Administration, along with CMS, ceased its efforts to defeat the bill in favor of probable managerial usurpation once the states had ratified their individual plans. Why fight against a rising tide of national support in which virtually every legislator was taking public credit for this bill, when you could bide your time and quietly assume the authority over how the bill is actually enforced and managed. In the end, after all, much of this was done to allow individuals receiving means tested welfare benefits to have a mechanism with which to accumulate more than the current $2000 asset limit. And now we have that mechanism; but I think we also have the Golden Rule - they that have the gold, rule. And “they” are headquartered in Baltimore, Maryland.
To be clear, I am not bashing the Social Security Administration or CMS with these comments. I have known and worked with many fine and caring members of both organizations; however, there were two unique aspects to their reticence about the entire bill. First, Mr. Crenshaw was inspired with the decision to place this bill in the Internal Revenue Code rather than under the Health and Human Services Act. This one move obviously removed the ball from SSA/CMS’s court and relegated them to becoming observers in the game. Secondly, SSA/CMS has been going through a major internal reorganization due to an incredible, and seemingly ever increasing, workload. To better understand the volume of their annual output you can review the highlights from the 2014 statistics HERE . Although they traditionally take a lot of heat from just about every quarter it’s important to remember that they didn’t write the complex regulations or create the large and ever-increasing caseloads. In my 30 years of dealing with many offices on behalf of beneficiaries, and with few exceptions, I have found most caseworkers to be responsive to the needs of those they serve.
While I remain a proponent of the ABLE Act, my attempt at critical thinking has forced me to address a number of problematic issues based on observation, experience and reasoning. In addressing the following concerns I am in no way holding myself out as a “thought leader” for the disability community or the professionals who provide services in that community. But I have put in enough time in the trenches to justify airing my concerns.
What we currently know is:
·        The wording of the legislation as signed by the president in December 2015 along with the initial rules, restrictions and the monetary guidelines;
·        That the Treasury Department will develop and finalize the regulations within IRC Section 529;
·        That each state is required to develop a plan based on those regulations plus identify a specific plan provider, or cede that role to another state if they so wish;
·        Submit their completed plan back to the Treasury Department for final approval; and,
·        Interestingly, the news that there would be “Discontinued Coverage of Vacuum Erection Systems (VES) Prosthetic Devices in Accordance with the Achieving a Better Life Experience Act of 2014.
So, on the threshold of a new era of how disability benefits, both welfare and entitlement, will be managed in a manner that might actually allow a beneficiary the opportunity to work and save toward the goal of self-sufficiency, and the first rule change deals with erectile dysfunction? Well, why not – after all bureaucratic dysfunction is one of the targets of this law.
Assuming all goes well, when those steps are completed we will, in theory, have the ability to open and fund actual ABLE accounts, “managed” by a named agency for each state. The key issues then will be:
·        How will the qualified disability determination be made and by whom?
·        If a determination denial occurs, how are appeals to be handled?
·        How will ongoing eligibility be monitored and by whom?
·        Who will monitor post eligibility issues which might affect a beneficiary’s account?
·        If an existing account is disqualified and an overpayment situation occurs, will the account be allowed to make that repayment?
·        If an existing account is disqualified, how is the date of disqualification determined for Medicaid reimbursement purposes?
·        If a beneficiary has an existing guardianship, either of the person or the estate, how can they also be the named owner of an account as the current rules specify?
·        How will the investment regulations be modified to address the requirements of an ABLE account from a college savings account which will have very different distribution timing and longevity?
·        Will there be specific regulations dealing with possible interactions between an ABLE account and a special needs trust?
·        Will the Social Security Administration/CMS establish a single, specialized office with well-trained cadre to deal with these and other complex issues as this program gains momentum?
This list is far from all-encompassing; however, it does speak to some of the unanswered questions on the minds of those of us that provide services to the potential beneficiaries of this new law.
Finally, a few observations concerning how best to utilize an ABLE account during its development and evolution process:
1.      No funding, other than from the beneficiaries earned or unearned income, should occur until the last month of the year. This will allow a working individual to contribute excess funds or an SSI beneficiary to more efficiently manage their $2000 asset limit restriction. If by December there is still some unused funding allowance, then a third party can easily make up the difference.
2.      Communicate, communicate, and communicate with other family members about the importance of coordinating any contribution into the account.
3.      Regardless of your state’s ultimate lifetime funding limit, do not contribute more than the stated $100,000 limit. This amount came about after eight hard years of political compromise. Any hope for future enhancements to this or other plans with the goal of helping our citizens with unique needs to better achieve a higher level of self-sufficiency will go right out the window if we begin to read about accounts with two or three times that amount being established. Plus, with the Medicaid payback provision, any advisor that suggested that level of funding should be subject to whatever remedy is available.
4.      Keep excellent records.
The success or failure of this program the will be based on many factors. The key to a good beginning will be, I believe, based on the agency or organization chosen in your state to be the ABLE provider. In my state of Texas I already know who that should be; The ARC of Texas Master Pooled Trust and I am expending what limited political capital I do have in carrying their banner. I want this program to work because I can see the great potential for many of those individuals that my firm works with on a daily basis. I say the ARC because they already have all of the necessary components required by legislation, plus they have years of experience in dealing with those who will be providing plan oversight and management. This next year or two with ABLE will have its highs and lows and I will feel much more comfortable with a steady, component hand at the helm of the Texas plan.
Yes, the bill was almost unanimous in its passing, and the President was swift in its ratification- and now the states are in a race to create and pass their legislation. All that means is the managers have met and exchanged lineups at the plate and the umpires are heading to their positions in the field - but the game doesn’t start until the players come out onto the field of play. The hope is that it will be a rewarding and entertaining game and that the box score will be a just reward for the years of hard work that went into its preparation. But, little has been heard from the 800 pound gorilla in the room, yet – so stay alert and be ready to play hard.

Postscript:   I was just preparing to publish this post when I received notification that the Texas Legislature had completed and passed its version of the ABLE plan. After a quick review it appears to express all of these significant elements of the federal bill along with the initial Treasury Department regulations. It names the Texas Comptroller’s office as the states lead agency and mandates the creation of an independent advisory board to work through the details. The stated goal is to have a working program available by 2016.

Thursday, July 02, 2009

Texas approves a Medicaid Buy In Program

Medicaid Buy-In approved for children with disabilities

Texas families struggling to provide health insurance for their children with disabilities may soon be able to buy coverage through the state’s Medicaid program.
During the recent session of the Texas Legislature, lawmakers approved an exceptional item in the HHSC appropriation request calling for creation of a Medicaid Buy-In program for children with disabilities whose family incomes are below 300 percent of the federal poverty level. In real dollars that means a family of four with a disabled child and an annual income of $66,150 might qualify. Monthly premiums or cost-sharing payments paid by participating families would help offset some of the cost of the program.

HHSC will now begin work to develop rules for the program, set up eligibility criteria and plan for integration of the new program into HHSC’s eligibility system. At the same time, HHSC must secure approval of the federal Centers for Medicare and Medicaid Services by way of an amendment to the Texas Medicaid State Plan. That process usually takes nine months to a year to complete.

The legislation projects the new Medicaid Buy-In program will serve more than 6,000 children each year once it’s fully implemented.
HHSC already administers a buy-in program for working adults with disabilities who are looking to access or continue Medicaid coverage. For more information on that program, visit the Frequently Asked Questions section of the Medicaid Buy-In website.

Monday, April 27, 2009

Seaton Foundation releases 3rd Edition on Life Long Planning

The Center for LifeLong Living and Planning announces publication of the third edition of “LifeLong Living & Planning for Individuals with Cognitive Disabilities”
Austin, Texas – April 27, 2009 – The Center for LifeLong Living and Planning, a program of the Seaton Foundation, is excited to announce the publication of the revised edition of its free informational booklet, “LifeLong Living and Planning for Individuals with Cognitive Disabilities.” The booklet provides families, guardians, caregivers and other professionals with a basic understanding of issues related to quality of life and long-term planning for individuals with brain injuries and other cognitive disabilities.
Featured authors include David Seaton, Harvey Jacobs, Janet M. Williams, Sandy Ransom, Al Condeluci, John Sassin, Stan Seaton, Randy Lewis, David B. Pharis, Deborah Green, Stephen C. Brewer and Steve Rhatigan.
The Seaton Foundation provides educational and training opportunities for caregivers and professionals who work with individuals affected by cognitive disabilities.
To request a copy, please contact or call Laura Latham at 512-371-1078. A PDF version of the booklet can also be downloaded from

Wednesday, November 26, 2008

Employment Issues take Center Stage

Employment for individuals with disabilities is receiving a much needed boost from an unlikely source; DEMOGRAPHIC REALITY. With the huge group of Baby Boomers just now beginning their slide into the "Golden Years", companies of all sizes will start to notice the ever growing number of empty positions within their walls. Many have already begun to feel the pinch and are looking at the huge, untapped supply of individuals with intellectual, cognitive and physical disabilities as a possible replacement source.

This demographic event has arrived just as many in the advocacy world are developing new and successful methods for preparing those same individuals for employability and, ultimately, self sufficiency. With a little luck and a lot more work from educators', service providers', benefit administrators' and employers', we could be on the brink of a new paradigm that screams "disabled doesn't mean unable".

Two great sites to catch much of the new information, go to DisabilityInfo.Gov and ODEP

Tuesday, July 29, 2008

Medicare issues new Durable Medical Equipment rules

Nearly four million people with Medicare living in ten communities across the nation will receive information about a new program that will lower their costs for certain medical equipment and supplies by changing how Medicare pays for these items. The Centers for Medicare & Medicaid Services (CMS) will begin mailing letters on the new program, which begins July 1, to beneficiaries later this month

“Beginning July 1, Medicare beneficiaries will see lower costs for some of their durable medical equipment and supplies – as much as a 43 percent savings for certain items – and the assurance they will have accredited and financially sound suppliers providing them with equipment and supplies,” said CMS Acting Administrator Kerry Weems. “It is important that people with Medicare who use certain medical equipment and supplies know they can call
1-800-MEDICARE or go to to see if their current supplier is a Medicare-contract supplier or what they may need to do to find a new supplier approved by Medicare.”

The resources being mailed to beneficiaries will include a brochure about the new program and a list of Medicare contract suppliers in their area. CMS is also sending similar information about the new program and the list of Medicare contract suppliers to local partner groups and durable medical equipment (DME) referral agents, such as hospital discharge planners, physicians’ office staff and home health agency social workers. The ten Round One communities include certain ZIP codes in the areas of Charlotte, N.C.; Cincinnati and Cleveland, Ohio; Dallas/Fort Worth, TX; Kansas City KS-MO; Miami and Orlando, Fla.; Pittsburgh, Pa.; Riverside, Calif. and San Juan, Puerto Rico.

The new program, required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), uses the competitive marketplace to establish prices for certain durable medical equipment, prosthetics, orthotics, and supplies. Under the new program, bids submitted by suppliers were evaluated and the bids within the winning range established the competitive prices that beneficiaries – and Medicare – will pay. Suppliers who were accredited, met financial and quality standards and bid within the winning range were offered contracts under the competitive bidding program. By using these selected contract suppliers, Medicare beneficiaries should receive high quality items at an average saving of 26 percent from approved suppliers.

Sunday, July 27, 2008

Financial Security Accounts for Individuals with Disabilities Act of 2007

The Financial Security Accounts for Individuals with Disabilities Act of 2007
H.R. 2370
Fact Sheet

General Purpose
The federal government gives American families a helping hand in saving for the future. Accounts with special tax advantages help people save for college, retirement, and other normal life events. But people with disabilities don’t have the same expectations for the future. They need a new savings instrument.

A typical tax-deferred savings plan, such as a “529” college tuition plan, can’t help a family with a child who may not go to college or become financially independent. On the other hand, the need for savings is even greater for a child with a disability because he or she will likely be less able to earn an income, and may require additional spending on medical treatment or adaptive equipment. Without a clear vision of the future, parents of children with disabilities must choose between turning down the advantages of savings plans or risking a penalty if their child cannot use the funds according to the account restrictions.

The Financial Security Accounts for Individuals with Disabilities Act of 2007 was first introduced n the 109th Congress. The legislation amends the Internal Revenue Code of 1986 to provide for the establishment of Financial Security Accounts for Individuals with Disabilities (FSAID) for the care of family members with disabilities.

Legislative Highlights
FSAID’s are exempt from taxation during the period of contribution;

Anyone can contribute to the financial security of a loved one;

Proceeds from the account, when used in accordance with this legislation, are not includible in the gross income of the beneficiary;
Accounts are for the exclusive purpose of paying qualified expenses of an individual who is disabled and who is designated the beneficiary of the trust;

Accounts are used for qualified expenses, not compensated for by insurance or otherwise, as detailed in the legislation. Such expenses include:

Educational expenses,
Medical and dental care,
Community based support services,
Employment training and support,
Assistive technology, and
After the age of 18, housing and transportation expenses.

1. Flexibility
FSAID accounts are easy to establish, unlike some other savings instruments.
Anyone – other family members, friends, employers – can contribute to an account on behalf of a beneficiary;
Since they are as easy as a savings account to establish, the costs associated in administering the account are low;
The Beneficiary can serve as the Trustee of the account;
A family who saves money in a traditional account for a child who becomes disabled later in life can roll over the funds into a disability savings account without penalty;
The beneficiary can be changed to other qualified family members.

2. Portability
Unlike some savings instruments, such as “529” college accounts, the FSAID would be created and regulated only on the federal level, so they would operate under the same rules in every state.

3. Financial Security
The Financial Security Accounts for Individuals with Disabilities Act of 2007 would give families of people with disabilities the ability to save for their child’s future just like every other American family, and help people with disabilities live full, productive lives in their communities

Under the proposal, an “individual with a disability” is defined as anyone currently receiving supplemental security income benefits under title XVI of the Social Security Act or an individual otherwise eligible to receive such benefits notwithstanding the income and assets tests required for eligibility for such benefits;

Rollovers from other accounts are allowed without penalty into a FSAID;

Prohibits amounts held by, or paid or distributed from, FSAIDs from being treated as income or assets when determining eligibility for benefits provided by any Federal benefits program;

Any distributions that exceed qualifying expenses are subject to an income tax on the non-qualifying portion of the disbursement;

Contributions to a FSAID are capped at $500,000.00.

Steve Rhatigan goes to Washington DC, Part Two

May 8, 2008

Steven C. Rhatigan from The Woodlands, Texas was named as Chair for the President's Committee for People with Intellectual Disabilities (PCPID).

Thirteen new members of PCPID, appointed by President George W. Bush, were sworn in by U.S. Department of Health and Human Services’ (HHS) Deputy Secretary Tevi D. Troy, Ph.D. The President’s Committee for People with Intellectual Disabilities provides advice to the President and to the Secretary of HHS pertaining to matters relating to programs and services for people with intellectual disabilities.

“Persons with disabilities are a unique group and they deserve the same quality of life as all other individuals,” said Daniel C. Schneider, HHS acting assistant secretary for children and families. “The new members will assist in upholding the rights of children and adults with intellectual disabilities and guarantee their capacity to participate in all aspects of community life.”

“This is a diverse and remarkable group of leaders at the local, state and national level, coming together to finish out the president’s New Freedom Initiative, which is to remove barriers to community living for people with disabilities,” said Steve Rhatigan, new chairman for PCPID, appointed by President George W. Bush.

Since its inception in 1965, the President’s Committee has led the charge to improve the lives of people with intellectual disabilities, most recently adopting the goals outlined in President George W. Bush’s New Freedom Initiative to recognize and uphold the right of all people with intellectual disabilities to enjoy a quality of life that promotes independence, self-determination, and full participation as productive members of society. These goals include the assurance of full citizenship rights, the reduction of the occurrence and severity of intellectual disabilities and the promotion of forward thinking programs and services and cutting edge assistive technologies to improve the lives of people with intellectual disabilities.

Monday, February 26, 2007

Social Security and Medicaid come under fire.

The issues surrounding the support of an individual with lifetime special needs are complex and varied. There is no “one size fits all” model that can be used as a template as each person, regardless of the disabling condition, has unique needs and abilities. There is also the question of what “natural” supports already exist in the form of family, friends and resources.
The programs that federal and state benefits provide are valuable to all qualified individuals and form the financial and security foundation of most long term plans. The nature and structure of these benefits make it difficult to match the need with the supports available, creating a situation not always conducive to actually achieving the stated mission of providing help to those in need with dignity and a sense of self worth.
And, many of the programs actively eschew the natural supports and quite often penalize a beneficiary for their caregiver’s actions and support.

The outcome of such a confusing maze of services is that many qualified individuals, and their caregivers, are not receiving the support that might make positive and profound improvements in their lives. And, even after they are on benefits, the constant flood of communications from the varied sources make it very difficult to maintain equilibrium as to their current status. Even experienced advocates find it a task to keep up with the published regulation changes, and this doesn’t include accounting for the regional interpretations and application of those changes.
Where can individuals get help? There is a cottage industry of attorneys’ who advertise their experience; however, they are usually partial to those cases with large back payment potential. That leaves the single mother with a special needs child largely at the mercy of the “voice” on the other end of the telephone line. And even the most educated person will find it hard to cut through the clutter.
At this particular time it is not unusual for an initial applicant to wait six to nine months to process their file trough 3 levels of evaluation. If they are still not approved, it can take another year to get through levels four and five.
If you consider that many individuals must make application through several agencies to receive their full measure of benefits, most with different terminology and requirements, it is no wonder that 30% of eligible individuals never re apply after their first failed attempt.

Some recent statements from reputable sources about the state of our benefit programs are direct and damning:

The Eligibility Definition used by SSA needs to be changed.
David C. Stapleton Dir, Cornell University Institute for Policy Research

“Further, I have concluded that we have to make fundamental, conceptual changes to both how we define eligibility for economic security benefits, and how we provide those benefits, if we are ever to fulfill the promise of the ADA.”

A User’s Perspective on Federal Disability Data
by Martin Gould, Ed.D. Director of Research and Technology
National Council on Disability

"There are dozens of individual federal funding streams with varying and different eligibility criteria for program access. There is a patchwork quilt of policy and program initiatives that change when Administrations turn over, or that are outmoded – some dating to the 1960s and 1970s -- and uncoordinated. There are no specific or concrete national goals for people with disabilities in a host of critical areas of life.”

Issues in Medicaid Policy and System Transformation:
Recommendations from the President’s Commission on the Freedom Initiative
Stephen L. Day, M.S.W.

“For the longer term an opportunity exists to review the current patchwork of
Medicaid optional services and state-level variations and to consider a more
consistent national Medicaid benefit plan”

A Disability System for the 21st Century
The Social Security Advisory Board
September 2006 Report

“Our Nation’s policymakers need to acknowledge that the current disability programs, though well intentioned, are badly fractured and disjointed. A unifying point of vision, oversight, and management is desperately needed.”

June 2005

“GAO’s research has found that these programs are neither well aligned with 21st century realities nor are they well-positioned to provide meaningful and timely support for Americans with disabilities. Solutions to these problems are likely to require fundamental changes, including regulatory and legislative action.”

It's time for a new plan for those with lifetime special needs and their caregiver's.