ABLE Tomorrow Act

Key Points

• The bill stops states from clawing back Medicaid costs from a deceased person's ABLE account, letting families keep those savings. Currently, states can recover Medicaid payments from ABLE accounts after the beneficiary dies, which discourages saving.
• Employers could contribute directly to a worker's ABLE account instead of a traditional retirement plan, and those contributions would be tax-deductible. This helps workers with disabilities save in a way that better fits their needs without losing employer matching.
• People could make larger one-time deposits from life insurance proceeds, third-party trusts, or 529 education accounts without hitting the usual annual contribution limit, making it easier to manage inheritances or settlements.
• Federal agencies including the Social Security Administration, the VA, HUD, Medicaid, CHIP, TANF, SNAP, Head Start, and special education programs would be required to tell eligible people about ABLE accounts when they sign up for benefits.
• If someone's ABLE account balance triggers a suspension of their SSI benefits, the bill creates a two-month buffer before the suspension kicks in, giving people time to adjust their savings without immediately losing income.
• The bill authorizes $50 million per year from 2027 through 2031 for grants to states and tribal governments to promote ABLE accounts and help eligible people open them.