Sponsors (8)
The bill substantially expands and promotes tax‑advantaged ABLE saving—helping many people with disabilities and families build and protect savings—while increasing federal and state fiscal costs, administrative burdens, and potential risks of beneficiary confusion or reduced retirement accumulation.
People with disabilities (including low-income individuals and families) can save more tax-advantaged dollars for disability expenses because ABLE eligibility and contribution flexibility are expanded (later onset age, higher contribution allowances, Saver’s credit eligibility, 529 rollovers, one-time trust/life‑insurance transfers).
People with disabilities who receive Medicaid will be able to preserve ABLE account balances from Medicaid estate recovery, providing legal clarity and protecting savings for beneficiaries and heirs.
Employees with disabilities can receive employer-directed contributions to ABLE accounts (with Treasury model plan amendments and guidance), increasing workplace options to build disability-related savings and ensuring the election is universally available within plans.
Tax expenditures (tax-advantaged treatment, credits, expanded rollovers) combined with $250 million in new outreach appropriations over five years will reduce federal receipts and increase near-term budgetary costs borne by taxpayers.
States may face higher Medicaid costs because ABLE account balances cannot be used for Medicaid recovery, removing a source of post‑benefit repayment and reducing states' fiscal flexibility.
Implementing these changes will impose additional administrative, compliance, and IT burdens on federal and state agencies, employers, plan administrators, and the IRS (updating materials, guidance, payroll systems, grant reporting), raising costs and diverting staff time.
Based on analysis of 9 sections of legislative text.
Protects ABLE accounts from Medicaid recovery, loosens certain rollover/lump-sum contribution limits, allows employer contributions to ABLE accounts, mandates outreach, and funds outreach grants.
Official title: Amend the Internal Revenue Code of 1986 to make expiring ABLE provisions permanent, improve accessibility and education for families, and for other purposes.
Introduced May 12, 2026 by Jerry Moran · Last progress May 12, 2026
Creates several changes to expand and promote ABLE accounts for people with disabilities: it bars States from recovering Medicaid payments from an ABLE account, loosens some rollover and lump-sum contribution limits, allows employer retirement plans to direct employer contributions into ABLE accounts, requires federal outreach to beneficiaries (including SSA, VA, HUD programs), and funds a multiyear federal grant program to boost ABLE account awareness and enrollment.