MiABLE Savings Accounts
529 ABLE is a new federal program that began enrollment in Michigan on 11/01/2016 as MiABLE. It allows individuals who were disabled before the age 26 and have an eligible disability status to accumulate funds to use for “qualified disability expenses” (QDE). These funds help individuals to support their health, independence and quality of life. .
ABLE assets are excluded for Medicaid eligibility and SSA limits of assets, thus allowing the individual to save for disability related expenses without the fear of losing benefits. Medicaid benefits are not suspended by any asset limit but SSI benefits are terminated once an individual has $100,000 on deposit.
Qualifying disability status can be confirmed by one of 3 ways. An individual can be a SSI/SSDI beneficiary, have a condition on SSA’s “List of Compassionate Allowances Conditions” or by Self Certification of Disability (under penalty of perjury). There are currently 5 states that have active ABLE programs. An individual account can be established in any state regardless of residence. The total annual contribution per account is currently $14,000 per year. Others can contribute to a MiAble account and can claim up to a $5,000 (single filer) or $10,000 (joint filers) deduction on their Michigan income tax returns. The accounts utilizes 21st century technology in the form of crowd funding to allow individuals to post their needs on the site and the community can contribute with a tax receipt provided at the time of funding.
Qualified disability expenses (QDE) are costs related to the beneficiary’s disability. All distributions from the account for QDE are tax exempt but distributions taken and used for non-QED are subject to taxation and additional penalties, including loss of SSA and Medicaid benefits. The qualifying expenses are encompassing and broad and are meant to cover the expenses of everyday living. They include but are not limited to transportation, housing, education, legal fees, AT and support services, employment training and end of life expenses.
The accounts do contain a “claw-back” provision in which upon an individual’s death the remaining funds are surrendered to Medicaid. The only current exception to the “claw-back” provision is if an individual has a qualifying MiAble family member, the funds can be transferred to that individual.
There is current pending federal legislation to expand the program. Specifically raising the age limit for onset of disability to 46 years of age, allowing individuals to rollover 529 Education accounts to the 529 ABLE account and a provision allowing working individuals to deposit up to the federal poverty level ($11,700) in addition to the Federal Gift Limit ($14,000).
Section 298 Initiative
The Section 298 Initiative is a statewide effort to improve the coordination of physical health services and behavioral health services in Michigan. This initiative is based upon Section 298 in the Public Act 268 of 2016. Under Section 298, the Michigan Legislature directs the Michigan Department of Health and Human Services to develop a set of recommendations “regarding the most effective financing model and policies for behavioral health services in order to improve the coordination of behavioral and physical health services for individuals with mental illnesses, intellectual and developmental disabilities, and substance use disorders.”
From MDHHS website http://www.michigan.gov/mdhhs/0,5885,7-339-71550_2941_76181—,00.html
The section calls for a restructuring of the Medicaid system to combine the behavioral health and medical services under one fund and all services to be administered by the state’s 11 contracted managed care plans. The governor’s intent was an integration and coordination of physical and mental health services for the consumer with the outcome being that more funds could be allocated for direct services. As a result of the backlash from consumer groups and CMH systems, workgroups were formed to examine the concerns and Section 298 is on hold for now.
There were several concerns but the most impactful are: there would be an increase of administrative costs for managed care plans that range from 10-15%, reducing funds that are available for services. The current plan provides fee for services for behavioral health with an administrative cost of about 3%. In addition to increased costs from the insurance companies, local CMHs will need to spend more resources to process claims to the 8 to 11 managed care providers the may participate with in their county.
Managed care plans want to exclude intellectually and developmentally disabled individuals from behavioral health services because of the large risk and liability costs. They are willing to maintain substance abuse and mental health support services because of their lower costs to provide services.
Most importantly the combining of the two Medicaid systems does not change or increase integration at the consumer level. Lansing will continue to explore viable options this coming year.