Rep. McMorris Rodgers on the ABLE Act: ‘It’s Personal’

Allen Smith, J.D. By Allen Smith, J.D. October 20, 2020
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​The Achieving a Better Life Experience (ABLE) Act helps many young people with disabilities live more independently by letting them—and others, on their behalf—save for disability-related expenses in tax-free accounts. Rep. Cathy McMorris Rodgers, R-Wash., told SHRM Foundation Executive Director Wendi Safstrom at the Society for Human Resource Management's (SHRM's) INCLUSION 2020 virtual conference on Oct. 20 that the law, which McMorris Rodgers championed, is personal.

'Something's Wrong'

McMorris Rodgers recalled learning that one of her children had tested positive for Down syndrome. "It wasn't easy news to hear," she said. While processing this, she and her husband were told not to put any assets in the child's name because it might jeopardize his ability to get benefits or health insurance. "I remember thinking at the time, 'Boy, something's wrong,' " McMorris Rodgers recalled.

She said this recommendation sent the wrong message to parents and families.

Soon afterward, McMorris Rodgers learned about ABLE accounts. "I love the fact that this is legislation that was an idea that a dad had, a dad who had a daughter with Down syndrome," she said. "It's an example that your ideas can make a difference."

ABLE Account

"This dad had been told that the traditional education savings accounts didn't really make sense for his daughter," McMorris Rodgers said. "Yet there was no tool available for handling expenses related to transportation, education, housing, whatever it may be." So he called for the establishment of ABLE accounts.

The ABLE Act let states create tax-advantaged savings programs for eligible people with disabilities under Section 529A of the tax code. Although contributions are not deductible from federal taxes, distributions, including earnings, are tax-free to the account holder if used to pay for qualified disability expenses, according to Voya, a financial services firm. Some states have made contributions deductible from state income taxes.

It took seven years to get the ABLE Act signed into law. But now, employers, family members, friends and others may contribute up to an annual calendar limit of $15,000 to help ABLE account holders with the extra costs associated with disabilities.

An ABLE account currently is available only for someone who has been diagnosed with a disability before he or she is 26 years old, but McMorris Rodgers said she'd like to see the age cap eliminated.

Subsequent Legislation

McMorris Rodgers also led the effort to get two provisions into the Tax Cuts and Jobs Act of 2017, which expanded the ABLE Act.

The first provision, ABLE to Work, allows those with disabilities to take their earnings from a job or internship and put them into an ABLE account. This helps people with disabilities work without jeopardizing their Social Security or Medicaid benefits or their health insurance, she said.

The second provision, ABLE Financial Planning, allows family members who have already set up a 529 education savings account for a child before he or she is diagnosed with a disability to convert the 529 account into an ABLE account.

McMorris Rodgers also has introduced legislation with Rep. Bobby Scott, D-Va., that, if enacted, would phase out the subminimum wage for certain workers with disabilities. She said this bill, the Transformation to Competitive Employment Act, "is an important step in really breaking down these barriers that those with disabilities often encounter."

Changing Attitudes

Safstrom asked how legislation can change not only laws but attitudes. She urged McMorris Rodgers to "address some of the stigma that is out there."

There is still a stigma in having a disability, McMorris Rodgers replied. Many employers view hiring someone with a disability as charity rather than as a recognition of the individual's ability, she added.

"We're very quick to focus on the disability and dismiss an individual and not give them a chance," McMorris Rodgers said. "We need to give many of these individuals a chance, and a lot of this is education. So there's more work that needs to be done."

She recommended that employers look into the work being done at Project SEARCH, which helps organizations set up internships for those with significant disabilities who are in their final year of high school.

Employers that recruit people with disabilities are seeing a positive impact, McMorris Rodgers said. People with disabilities often "are excited to come to work. They show up every day on time. They're ready to learn, and, with minor accommodations, these individuals can become very valuable employees," she stated.

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