529 PLANS

MiABLE

The mission of Michigan Achieving a Better Life Experience Plan is to encourage and assist the saving of private funds to help persons with disabilities cover costs that support their health, independence, and quality of life.

General

Program type:

ABLE Savings plan

How to enroll:

Enroll directly with the program

Initial year of operation:

2016

State agency(ies):

Michigan Department of Treasury's Student Financial Services Bureau

Program manager:

TSA Consulting Group

Manager contract term:

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Investment Manager

Prudential Investment Advisor

Eligibility

State residency requirements:

No

Who can be a participant/owner in the program?

An account may be opened to save for Qualified Disability Expenses by (i) an Eligible Individual or (ii) a Designated Representative on behalf of an Eligible Individual.

Program restrictions:

To be eligible for an ABLE savings plan, an individual must have been diagnosed with a disability before age 26, and be eligible to receive benefits under Supplemental Security Income (SSI) and/or Social Security Disability Insurance (SSDI). Individuals who are not receiving SSI and/or SSDI may still be eligible if they meet the age requirement and have been diagnosed by a licensed physician and received a letter of certification.

Contributions

Maximum contributions:

The annual contribution limit (from all sources) is equal to the annual gift tax exclusion amount under the Internal Revenue Code, currently $14,000, which is subject to change. There is also an aggregate account balance limit of $500,000. However, assets can grow beyond $500,000 due to investment earnings without violating the aggregate account balance limit.

Minimum contributions:

$25 per account unless the account owner signs up for the automatic investment plan (AIP) or payroll deduction of at least $15 per payroll. The minimum subsequent contribution amount is $25, but is waived if the account owner is signed up for AIP or payroll deduction.

Investment Options

Target-Risk Options:

Select among 5 portfolios: All Stock Aggressive, 80/20 Aggressive Portfolio, 60/40 Balanced Portfolio, 40/60 Moderate Portfolio, 20/80 Conservative Portfolio.

Bank Money Market Investment Option:

An omnibus savings account insured by the FDIC and held in custody by FPS Trust Company at the Bank

Fees & Expenses

Enrollment or application fee:

None

Account maintenance fee:

$45 annually

Program management fees:

0.50% for all portfolios

Expenses of the underlying investments:

Ranges from 0.17% to 0.28%. None for the Bank Money Market Investment Option

Total asset-based expense ratio:

0.50% - 0.78%

Fees or restrictions on the number of disbursements

No, however there is a $10 disbursement fee for checks, $15 fee for wires, and no fee for SCH.

Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

Contributions to a plan account are deductible, in an amount not to exceed $10,000 for married taxpayers filing jointly ($5,000 for single taxpayers and for married taxpayers filing separate returns), in computing the contributor's taxable income under Michigan law.

State tax recapture provisions:

None

State tax treatment of qualified distributions:

The earnings portion of a non-qualified withdrawal may be subject to a partial recapture of any Michigan state income tax deduction previously claimed.

State tax treatment of rollovers:

Michigan follows federal tax-free treatment.

Medicaid eligibility

The ABLE Act is designed to ensure that the value of any and all assets purchased using funds from an ABLE account that are qualified disability expenses will not count for the purposes of determining eligibility for Medicaid, and that once an asset is purchased it will not be subject to further review. However, the Centers for Medicare & Medicaid Services (CMS) have not yet provided interpretative guidance similar to SSA's regarding the potential impact of ABLE plans on Medicaid benefits.

Medicaid recapture provisions

Upon the death of the account owner or eligible individual, Code Section 529A permits a state to file a claim for the total medical assistance paid for the account owner under the state's Medicaid plan after the establishment of the account (or any ABLE account from which amounts were rolled or transferred to the account). The amount of the claim is to be paid only after the payment of all outstanding payments due for qualified disability expenses, including end of life, death and burial expenses, of the account owner and is to be reduced by the amount of all premiums paid by or on behalf of the account owner to a Medicaid Buy-In program under that state's Medicaid plan. Procedures for filing claims may vary from state to state. Designated representatives, executors, and personal representatives of estates may want to consider obtaining advice of the counsel on the applicability of, and any available exceptions to, Medicaid recapture under applicable state law and regulation.

Is there a debit card/ purchasing card available, and if so, at what cost?

Yes, available summer 2017. There will be no additional fees associated with the card, except for a replacement fee if the card is lost.

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

Qualified withdrawals will be payable to the account owner. Distributions will be sent to the address on the account, a third party designated by the account owner or by ACH.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer account ownership

Documents, Access & Reporting

Does participant have online password-protected access to account?

Yes

Can the complete enrollment process including funding be done online?

Yes

Documents and other services accessible or downloadable on the program's public Web site:

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Contact

Website:

Click here to visit

Telephone:

844-656-7225

State News

 

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