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Hawai'i ABLE

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HI resident benefits

Hawai'i has partnered with the State of Oregon and their ABLE for ALL Savings Plan. The National Program ABLE for ALL Savings Plan is available without regard to the beneficiary's state of residence. The Hawai'i ABLE Savings Program is a participant in the National Program.

OVERVIEW

Program type

ABLE Savings plan

Investment manager

Sellwood Consulting

Inception

2021

State agency

Hawai'i Department of Budget and Finance - Director of Finance

Program manager

Sumday

Manager contract term

MORE INFORMATION

Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

An account may be opened by a qualified beneficiary under Section 529A or, if one is designated, his/her Authorized Representative on his/her behalf.

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.

Did you know?

The plan can be used to pay for qualified disability expenses.
This can include education, job training and support, healthcare and financial management.
Savings in an ABLE account will not impact eligibility to receive government benefits.
The first $100,000 is exempt from the Supplemental Security Income limit, and beneficiaries will continue to receive Medicaid regardless of account size.
Residents are not limited to investing in their own state's ABLE plan.
Another state may offer a plan with better suited investment options, lower fees or preferred features.
Visit this plan's website to learn more.

Contributions

Maximum contributions:

Annual contribution limit is currently $17,000 from all sources. If the beneficiary works, the beneficiary can also contribute part, or all, of their income to their ABLE account. This additional contribution is limited to the poverty-line amount for a one-person household. For 2023, this amount is $14,580. The designated beneficiary is not, however, eligible to make this additional contribution if their employer contributes to a workplace retirement plan on their behalf.

ABLE account beneficiaries can qualify for the Saver's Credit based on contributions they make to their ABLE accounts. Up to $2,000 of these contributions may qualify for this special credit designed to help low- and moderate-income workers.

Additional contributions to an ABLE account are not permitted if, taking into account the proposed contribution, the ABLE account's balance is or would be greater than or equal to the lifetime account limit, currently $400,000.

Minimum contributions:

The minimum initial contribution amount is $25 per ABLE account. The minimum subsequent contribution amount is $10 per ABLE account.

Investment Options

Target-Risk Options:

Select among 3 portfolio options: ABLE Conservative Investment Option, ABLE Moderate Investment Option, and ABLE Aggressive Investment Option, as well as a Cash Option.

Bank Money Market Investment / Checking Option:

The Cash Option offers FDIC insurance protection for amounts contributed to the Cash Option.

Fees & Expenses

Enrollment or application fee:

None

Account maintenance fee:

$35 annually; $10 per year for paper statements when you choose to opt out of electronic statements.

Program management fees:

State Administrative Fees of 0.30%

Expenses of the underlying investments:

Ranges from 0.0371% to 0.04%, depending on the selected investment option; none for the Cash Option

Total asset-based expense ratio:

0.30% - 0.34%, depending on the selected investment option

Fees or restrictions on the number of disbursements

There is a $2.50 fee on each paper check disbursement, as well as a $15 fee on outgoing wires, as well as for the re-issue of disbursement checks.

Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

None

State definition of qualified expenses

The state's definition of qualified education expenses currently includes expenses for attendance at an institution of higher education as defined by the Internal Revenue Code and its regulations addressing qualified state tuition programs. This does not include tuition for elementary or secondary education.

State tax treatment of qualified distributions:

Qualified distributions from Hawaii and non-Hawaii 529 plans are exempt.

Medicaid eligibility

The CMS guidance can be found at Implications of the ABLE Act for State Medicaid Programs on the CMS website. Please consult with your state's Medicaid office with any additional questions.

Medicaid recapture provisions

Under Section 529A of the Code, following the death of the beneficiary, any state may file a claim against the ABLE account for the amount of the total medical assistance paid for the beneficiary under the state's Medicaid plan after the establishment of the ABLE account (or any ABLE account from which amounts were rolled or transferred to the current ABLE account). The amount paid in satisfaction of such a claim is not a taxable distribution from the ABLE account. Further, the amount is to be paid only after the payment of all outstanding payments due for the qualified disability expenses of the beneficiary, which includes funeral and burial expenses, and is to be reduced by the amount of all premiums paid by or on behalf of the beneficiary to a Medicaid Buy-In program under that state's Medicaid plan.

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

The ABLE Visa Prepaid Card will be issued by Sunrise Bank. There are no transaction fees with the ABLE Visa Prepaid Card but there is a charge of $1.25 per month once the card is activated.

Distributions & Terminations

To whom are distributions made payable:

Only the beneficiary, or, if one has been named, the authorized legal representative, may direct withdrawals from an ABLE account.

Account Changes

Policy regarding participant/owner changes:

A change in the beneficiary of an ABLE account is not treated as a distribution and is not subject to federal gift or GST taxes if the new beneficiary is an eligible individual and a sibling of the current beneficiary. However, if the new beneficiary is not a sibling of the current beneficiary, the change is treated as a non-qualified withdrawal by the current beneficiary and may have federal gift tax or GST tax consequences.

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:

Contact

Website:

https://www.hawaiiablesavings.com/

Telephone:

844-394-2253

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