Voya Financial Inc announced today that it supports — and encourages Congress to pass — the federal ABLE Employment Flexibility Act (H.R. 4672) to further enable financial well-being for workers with disabilities.

The bill would make ABLE accounts more accessible to employees with disabilities and remove a barrier to competitive, integrative employment. As it is currently written, the proposed legislation would assign similar treatment to contributions that employers make to ABLE accounts (529A accounts) as is assigned to employer contributions to retirement plans. In addition, it would provide more options for employees with disabilities to save for their futures without jeopardizing their eligibility for crucial government benefits.

Aims to Spur Employers to Contribute to ABLE Accounts

Today, employer contributions to ABLE accounts are not counted as a tax deduction for the business, but employer contributions made to tax-qualified retirement plans are tax-deductible. This proposed legislation seeks to change that, adding incentives for employers to contribute to ABLE accounts for eligible employees.

Additionally, many people with disabilities depend on means-tested government benefit programs to sustain their independence. These programs — such as Medicaid, Supplemental Security Income (SSI), Federally Assisted Housing and the Supplemental Nutrition Assistance Program (SNAP) — determine eligibility by asset levels. Employee contributions to retirement plans that, in turn, are matched by employers can be considered accumulating assets for the individuals with disabilities, affecting their eligibility for these means-tested benefits. Contributions by both the employer and the employee to ABLE accounts would be excluded from asset tests, preserving eligibility for government benefits while enabling savings.

“This would be another positive step toward financial security and compensation equity for people with disabilities. They would be able to contribute to the employer match, just as their colleagues would, while remaining within the asset limit of the means-tested government programs that they depend on for their independence.

“For employers, in addition to ‘doing the right thing,’ the proposed legislation would create additional flexibility to offer responsive employee benefit programs to help recruit, hire, train and retain people with disabilities, a largely untapped pool of talent.”

— Jessica Tuman, head of the Voya Cares Center of Excellence

ABLE Employment Flexibility Act

The ABLE Employment Flexibility Act bill, introduced into Congress on July 22, 2021, expands the 2014 Achieving a Better Life Experience (ABLE) Act that allows qualified beneficiaries with disabilities to save up to $15,000 a year in a 529A savings account for the purpose of supporting and maintaining their health, independence and quality of life, and those funds are excluded from the asset limitations of federal benefit programs.

In 2017, the ABLE Act was further amended by the ABLE to Work Act that allows employed ABLE account owners who do not opt in to their retirement plans to save an additional $12,760* above the $15,000 limit.

*Federal poverty line for a one-person household in 2021 is $12,760.

[Source(s): Voya Financial, Business Wire]