A bipartisan group of legislators, which includes Senators Amy Klobuchar (D-MN) and Eric Schmitt (R-MO) and Representatives Sharice Davids (D-KS) and Brian Fitzpatrick (R-PA), recently introduced S. 2459/H.R. 4644: ABLE Employment Flexibility Act in Congress. This bill is designed to expand economic opportunities for Americans with disabilities by allowing employers new flexibility to provide retirement benefits to qualified employees.
Under the ABLE Employment Flexibility Act, employers can make tax-free contributions to ABLE accounts, which are special savings accounts for eligible individuals with disabilities. A major benefit of ABLE accounts is that individuals with disabilities can save money without jeopardizing their eligibility for federal means-tested public benefits programs like Supplemental Security Income (SSI) and Medicaid.
The purpose of the Act is to allow these workers not only to preserve their current eligibility for the financial support and health care they need, but also to save for future needs that government programs may not cover. Currently, employer-provided retirement contributions, such as matching funds that employers deposit in workers’ 401(k) plans, may prevent individuals from being eligible for federal benefits programs. Without the Act, these individuals are at a disadvantage compared to other workers when planning for their futures. By allowing employers to contribute funds directly to ABLE accounts, individuals with disabilities can still access savings with tax advantages without losing benefits.
Frequently Asked Questions
Who is eligible to have an ABLE account that could receive employer contributions under this Act?
ABLE accounts are available to individuals who became disabled before age 26 (or after January 1, 2026, before age 46) and meet the Social Security Administration’s definition of disability. The Act does not change eligibility rules for ABLE accounts—it simply allows employers to contribute to them in a tax-advantaged way.
How does this legislation affect employers who want to support workers with disabilities?
Employers gain a new option to provide retirement-style benefits without risking their employees’ access to federal programs. Instead of being limited to traditional retirement accounts like 401(k)s, they can now direct contributions into ABLE accounts, aligning workplace benefits with the unique financial needs of disabled employees.
How does the ABLE Employment Flexibility Act compare to existing retirement benefit structures?
Traditional retirement accounts like 401(k)s or IRAs can unintentionally disqualify individuals with disabilities from means-tested benefits. The Act creates a parallel path for employer contributions to ABLE accounts, preserving eligibility for programs like SSI and Medicaid while still offering tax-free growth and withdrawals for qualified expenses.
Does the ABLE Employment Flexibility Act change how federal benefits are calculated?
No, the Act does not alter the formulas or eligibility rules for programs like SSI or Medicaid. Instead, it creates a safe channel for employer contributions to flow into ABLE accounts, ensuring that these funds are excluded from the calculations that typically reduce or eliminate benefits when traditional retirement contributions are made.
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