H.R. 647, The ABLE Act of 2014

H.R. 647

The ABLE Act of 2014

Ways and Means

December 3, 2014 (113th Congress, 2nd Session)

Staff Contact

Floor Situation

On Wednesday, December 3, 2014, the House will consider H.R. 647, the Achieving a Better Life Experience (ABLE) Act of 2014, under a rule.  H.R. 647 was introduced on February 13, 2013 by Rep. Ander Crenshaw (R-FL) and referred to the Committee on Ways and Means, which ordered the bill reported, as amended, by voice vote.  The bill was also referred to and discharged by the House Energy and Commerce Committee.

Bill Summary

H.R. 647 is designed to provide individuals and families with the opportunity to save for the purpose of supporting individuals with disabilities in maintaining their health, independence, and quality of life.  Starting in 2015, States would have the option to establish an ABLE program, under which eligible individuals with disabilities may establish an ABLE account, which are modeled after current Section 529 savings accounts. To be eligible, individuals must: 1) be severely disabled before turning age 26, based on a marked and severe functional limitation; or 2) receive benefits under the SSI or Disability Insurance (DI) programs.  Other key features of the program include the following:

  • Contributions into an ABLE account can be made by any person;
  • Contributions are not tax deductible;
  • Income earned by the accounts is not taxed;
  • Account withdrawals, including portions attributable to investment earnings generated by the account, for qualified expenses are not taxable;
  • Qualified expenses are those related to the individual’s disability, including health, education, housing, transportation, training, assistive technology, and personal support;
  • Individuals are limited to one ABLE account, and total annual contributions by all individuals to any one account can be made up to the gift tax limit ($14,000 in 2014);
  • Aggregate contributions to an ABLE account are subject to an overall limit matching the State limit for Section 529 accounts;
  • Individuals with ABLE accounts can maintain eligibility for means-tested benefits. ABLE account balances and withdrawals are completely excluded for the purpose of Medicaid and other benefit programs. In SSI, the first $100,000 in account balances is excluded; and
  • In the event a beneficiary of an ABLE account dies (or no longer has a disability) and has remaining assets in the account, the assets are first distributed to any state Medicaid plan that provided medical assistance to the beneficiary.


“Individuals with disabilities can face significant barriers to finding and holding employment and living independently because their access to certain safety-net programs can be lost once they establish a minimum level of savings and income, thus creating a disincentive to find and obtain employment.”[1]  H.R. 647 would allow individuals with disabilities to work and live independently without losing access to Medicaid and Supplemental Security Income (SSI).

[1] See House Report 113-614, page 7.


In total, CBO and JCT estimate that enacting the ABLE account provisions in this legislation would increase deficits by $2.1 billion over the next 10 years.[1]  For this reason, the legislation has been amended to include a number of offsets in Title II that ensure H.R. 647 as amended does not increase the deficit.  These include:

  • A technical correction to worker’s compensation offset age (saves $220 million);
  • Accelerating by one year the application of relative value targets for misvalued services in the Medicare physician fee schedule, reduce the number of years the targets are in effect, and increasing the first year target; (saves $365 million);
  • Consistent treatment of vacuum erection systems across Medicare (saves $440 million);
  • A one-year delay of implementation of oral-only policy under Medicare ESRD prospective payment system (saves $380 million);
  • A modification of the Inland Waterways Trust Fund financing rate (increases revenue by $260 million);
  • IRS certification of PEOs (increases revenue by $8 million);
  • The exclusion of dividends from controlled foreign corporations from the definition of personal holding company income (increases revenue by $14 million);
  • An inflation adjustment for certain civil tax penalties (increases revenue by $115 million);
  • An increase in continuous levy to collect unpaid taxes (increases revenue by $241 million); and
  • A change in the investment direction rule for Section 529 plans (negligible revenue effect).

Overall, as CBO notes, “enacting H.R. 647 would reduce unified budget deficits by $33 million over the 2015-2024 period. The bill would reduce outlays by $294 million and reduce revenues by $261 million over those 10 years.”

[1] http://www.cbo.gov/sites/default/files/cbofiles/attachments/hr647_1.pdf

Additional Information

For questions or further information contact the GOP Conference at 5-5107.