Wisconsin is an outlier on savings accounts for people with disabilities. That could soon change.

MADISON - Ann Stanton searched for information about savings accounts as she helped her family set up an estate plan after her brother was diagnosed with a disability that affects coordination.

At first, she thought Wisconsin had a program for tax-free savings plans for people with disabilities, known as ABLE accounts. Only four states haven't established the program, and Wisconsin is one of them.

The lawyer her family met with to discuss trusts wasn't an expert in ABLE accounts, but referred them to Illinois' program.

Stanton, who works in social services and whose brother was a social worker, found an FAQ page about the accounts in Illinois. But it wasn't clear to her whether information about how the accounts protect public benefits like Medicaid also applied to Wisconsin.

"We're so paranoid about my brother losing benefits. We're not going to take a chance," Stanton said. "It's enough work to set up these trusts and understand the rules."

In 2015, Wisconsin was poised to create its own program under the federal Achieving a Better Life Experience (ABLE) Act, but changed course when Congress began allowing people with disabilities to open accounts in other states.

Now, Wisconsin's participation rate in the program is around 0.2% — five to 10 times lower than neighboring states that have their own program and dedicate public resources to ABLE education, according to a 2022 state Department of Financial Institutions report.

"Virtually no one in the state is using ABLE accounts," said one disability advocate who spoke with the Milwaukee Journal Sentinel.

The state estimates more than 140,000 people in Wisconsin are eligible for ABLE accounts, but fewer than 300 people in Wisconsin claimed deductions for contributions on their state income taxes in recent years, according to the study.

The Stantons aren't one of them. The family's experience reflects that of many Wisconsinites who are wary of out-of-state accounts, said Kathleen Oberneder, a financial planner in Cedarburg with expertise in ABLE.

"It's not lack of awareness, it is fear. No parent wants to put their child's public benefits at risk. The communication isn't clear enough," she said. "People have heard of them, but it's the, 'I'm not going to send my money to another state. Wisconsin doesn't have one, so then there must be something wrong with that.'"

Wisconsin is the only state that has not established an ABLE program or tasked a government agency with helping people set up accounts in other states, according to DFI.

A bipartisan bill that passed the state Senate in June with only three no votes — but has not yet come up for a vote in the Assembly — could soon change that.

ABLE accounts help people with disabilities save without losing eligibility for benefits

People with disabilities can use ABLE accounts to invest and save for disability-related expenses, such as housing, transportation and assistive technology. Users can put up to $17,000 in the accounts each year, or more if they are employed, and keep a maximum of $100,000. Money grows in the account tax-free.

The accounts are similar to college savings plans like Wisconsin's Edvest program, falling under the same 529 section of the tax code.

ABLE accounts allow individuals with disabilities to save money without jeopardizing access to federal benefits like Medicaid and Supplemental Security Income. The "asset test" for those programs can discourage people with disabilities from working, as they could go over the savings limit. That was the case for Stanton's brother.

In order for a person with a disability or blindness to receive benefits through those programs, their liquid assets — like cash, checking and savings accounts — must total below $2,000 for individuals and $3,000 for couples. Legislation in Congress could raise those caps, set in 1989, to $10,000 and $20,000.

The asset test "has not been adjusted for inflation," said Ryan McGuire, a special needs financial planner in Madison. "$2,000 is an archaic, stress-inducing, very low limit. An ABLE account can create huge relief for people in managing cash flow to ensure there's no lapse in benefits."

Coming up with down payments for a new apartment, home or car is "impossible if you're limited to $2,000," explained Tami Jackson, a public policy analyst and legislative liaison for the Wisconsin Board for People with Developmental Disabilities. "ABLE accounts are kind of a workaround."

Saving, investing and growing money was "not something people with disabilities could do before ABLE Act legislation was passed," said Miranda Kennedy, director of the ABLE National Resource Center. "They didn't have that opportunity like anyone else would."

Opening ABLE accounts elsewhere has proven difficult for Wisconsinites

Stanton was one of several family members of people with disabilities who submitted testimony in support of the bill in March. One parent had success setting up an account in Iowa, while another said it took her several days to "sift through plans from nearly every state in the nation" before opening accounts in Nebraska.

"In theory, the status quo allows ABLE-eligible Wisconsin residents to obtain the advantages of ABLE participation without the need to establish our own Wisconsin program. In reality, however, the status quo is resulting in missed opportunities for our residents," DFI testified at the March hearing.

Organizations like the ABLE National Resource Center have state-by-state comparison tools — a resource Oberneder finds helpful. The center has also given presentations about ABLE to parent groups and financial planners in Wisconsin, who are "hungry and interested in this information," Kennedy said.

On presentations that compare account options by state, "we always have to have an asterisk or a little bit of an additional explanation" for Wisconsin, she said.

Disability advocates say being able to point to one source for ABLE information in Wisconsin would decrease the burden on individuals and families to learn about the accounts themselves or find someone to give them advice.

"Individuals with disabilities, or their families, have an awful lot of extra things on their plate that families that aren't dealing with disabilities do not have," said Joanne Juhnke, an advocacy specialist at Disability Rights Wisconsin. "It looms even larger to take on a project like this if there is not a simple way to do it."

Juhnke's daughter has an ABLE account but noted she has the advantage of being married to a tax economist. Oberneder and McGuire, whose daughter and sister also use the accounts, said they only know of a handful of chartered special needs consultants like them in Wisconsin.

The DFI report estimated that 142,150 Wisconsinites were eligible for ABLE accounts. That figure will soon be much higher, as federal law changed in December to allow people diagnosed with a disability before age 46, rather than 26, to open accounts. DFI has not run an estimate based on the new age group, which will become eligible in 2026.

The expansion could make the accounts available to veterans who have acquired disabilities, individuals experiencing early onset diseases and people with traumatic brain injuries or who have been in accidents, Jackson explained.

"There is a much larger group of people who can now benefit from these accounts. And it's more imperative now that we have a structure in place," she said.

The proposal now needs final Assembly approval

This isn't the first time lawmakers have looked at implementing ABLE in Wisconsin. Bipartisan bills were introduced in the last two legislative sessions but never got hearings. Last year, lawmakers voted to require DFI to conduct a report to weigh Wisconsin's options for implementing ABLE.

The report concluded the best way forward is to join one of two collaborations offering ABLE accounts, which most states are part of. Joining one of those multi-state groups costs nothing for a state, offers experienced program managers and charges lower fees for participants, the study found.

The current bill would allow DFI to take that path. Upon joining one of the collaborations, ABLE accounts could be offered through Wisconsin "within months," the agency said.

DFI says one full-time staffer is still needed to oversee the program and help educate Wisconsinites about ABLE accounts. That position would cost around $174,960. Stanton said funding just one position was "a little concerning" — the report noted other states employ a half-time staff member up to three people for the program.

Creating a program in Wisconsin, which the 2015-17 state budget required, would have cost at least $350,000. A year later, lawmakers passed a bill to repeal the plan, as people with disabilities could start opening accounts in other states. Some Democrats proposed amendments to the bill to make more information about ABLE available online, but those were voted down.

Republican Rep. John Macco, who represents Ledgeview and led the bill in 2016, said that while having a state-branded program could put people at ease, it wouldn't lead to better investments or cheaper costs. Money in the accounts would still sit outside of Wisconsin and residents can already compare vendors, unlike traditional 529 accounts, he said.

"We're creating more bureaucracy," Macco said in an interview. "The program already gives complete access to folks that need that type of care."

Macco founded a financial planning group, which he said tells clients about ABLE if their children have disabilities, calling it "a really good tool." Macco said he will vote for the current bill and thinks it will "definitely pass" the full Assembly.

Republican Sen. André Jacque, who represents De Pere and is an author of the measure, hopes the Assembly will schedule the measure for a vote soon.

If it passes, Democratic Gov. Tony Evers is likely to sign the measure. In his budget proposal, he recommended $247,500 and $275,000 over the next two years to implement the program, more than what DFI estimates the full-time position would cost.

Bankers, credit unions, insurers and Wisconsin Manufacturers and Commerce — the state's powerful business lobbying group — all support the bill, along with disability advocacy organizations. No lobbying groups have registered against the proposal.

"The longer this goes where we kind of are the unique outlier in the country, we're now at the point where this is doing some harm," Jackson said. "It really is an easy thing that we could do that would be helpful to an awful lot of people. Make it easier, not harder."

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This article originally appeared on Milwaukee Journal Sentinel: Wisconsin may soon offer ABLE accounts for people with disabilities