Go One Step Further: The 529 ABLE For Recovering Opioid Abusers…?

Posted December 13, 2018

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Can the 529 ABLE account be expanded to include Opioid Use Disorder as a qualified disability?  It is worth considering.

Prior to June 2018, the Whatcom County Sherriff’s office had a policy of denying individuals suffering from opioid use disorder (OUD) medications that treat opioid addiction.  Inmates were required to go “cold turkey” during their time in custody.  An exception was made for pregnant inmates.  The Americans With Disabilities Act forbids discrimination against disabled individuals; a public entity cannot deny the benefits of the services programs, or activities of the public entity based upon a disability for which reasonable accommodations for access to the benefits can be made.  Individuals suffering from OUD are considered disabled.  The ACLU of Washington’s position in the class action civil rights lawsuit filed against Whatcom County and the Whatcom County Sherriff was that MAT or “medically assisted treatment” medications (which include buprenorphine and morphine) are “clinically appropriate medications” and are on par with other medications for people suffering from other medical ailments (e.g., heart or diabetes medicine).  OUD is a “chronic” condition, effects brain chemistry and can require the use of MAT on a regular basis…even for the remaining years of the addict’s life.  MAT helps addicts achieve better outcomes through their recovery journey, which may include reduction in unnecessary physical suffering, chance of relapse, and overdose.  To deny incarcerated addicts suffering from OUD access to MAT is to single out a group of people deemed disabled by the ADA, which is discrimination and prohibited.   The U. S. District Court in Seattle ruled that the Whatcom County Jail was, indeed, in violation of the ADA.  OUD is a protected disability under ADA.

What is a qualified disabled person according to the Americans with Disabilities Act, Title II?

According to Title II, Section 201 of ADA, a “qualified individual with a disability” is a person with a disability who, “with or without reasonable modifications to rules, policies, or practices, the removal of architectural, communication, or transportation barriers, or the provision of auxiliary aids and services, meets the essential eligibility requirements for the receipt of services or the participation in programs or activities provided by a public entity.”  Explicitly, ADA addresses public transportation, vehicles, construction and access to facilities.  However, there is the idea that the services provided by the public entity (state or local government, department, agency, district, instrumentality, or commuter service) are to be available for all qualified individuals and the disability itself is to have no bearing on their qualifications to receive the service offered.

The plaintiffs in the ACLU of Washington case were entitled to receive the same medical services that other inmates received in Whatcom County Jail because OUD was a medical condition that required medication.  Previous trouble with the law or the fact that they were not pregnant did not absolve the jail from treating the inmates fairly by offering medications to treat a chronic, debilitating and deadly condition.

What is a qualified disabled person according to the Social Security Administration?

The federal government has a very strict definition of disability.  A recipient of benefits must not be able to work; the condition must be severe, significantly hindering ability to do basic work activities such as lifting, standing, walking and remembering.  Blindness, in severe, non-correctable cases is a condition that warrants SSA benefits under the strict federal definition of disability.  In addition, the condition must be expected to last more than one year or result in death.  There is a five-step process when determining whether or not a person meets the criteria of qualified disabled person that addresses the following:

  1. Employment status and earnings
  2. Severity of condition
  3. Is the condition included on the listing of impairments? (“medically equal” conditions, similar in severity to listed impairments, are also considered)
  4. Ability to do work within or related to current/previous profession
  5. Ability to do ANY gainful work

What is a qualified disabled person according to the requirements of a 529 ABLE account?

On December 19, 2014, President Obama signed The Stephen Beck, Jr. Achieving a Better Life Act of 2014 into legislation to facilitate a way for blind and disabled individuals to save money in tax advantaged accounts for the purpose of ensuring a better quality of life.  Qualified disabled persons are individuals with a physical or mental disability (not necessarily limited to sight or hearing) that functionally limits their ability to be employed or substantially limits one or more life activities (walking, speaking, breathing, learning, or working.)  In order to be qualified, the individual must meet the requirements set forth by title II or XVI of the Social Security Act.

According to the ABLE National Resource Center in Washington DC, qualified expenses are “any expenses related to the designated beneficiary’s blindness or disability that assist him/her in increasing and/or maintaining their health, independence and/or quality of life. These may include expenses related to education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services and other disability related expenses that the beneficiary might incur as a result of having a disability.”  Some of the noteworthy characteristics of ABLE accounts are:

  1. Can be set up for qualified individuals that became disabled prior to age 26. It is possible to open the account at any age.  The ABLE Age Adjustment Act was introduced in the Senate on April 4, 2017, which aims to increase the age threshold to 46.
  2. Only one account may be set up per qualified disabled individual (beneficiary). The beneficiary is the owner; however, it is possible to designate a parent, guardian or power of attorney to have signing authority on the account for the benefit of the beneficiary.
  3. If a beneficiary of a 529 Education Savings Account, which can be established specifically for qualified education related expenses, becomes disabled, then the education account funds can be “rolled over” to a 529 ABLE account, however there are some limitations on amounts.
  4. For 2018, the annual contribution limit is $15,000. Multiple individuals can contribute to the account up to the annual limit.  The beneficiary can contribute a portion of their own compensation to the ABLE account, subject to some limitations.
  5. Money used from the account for “qualified expenses” will not be included in the beneficiary’s gross income. This means that others can contribute to the account, but the owner gets the benefit of using the funds for their health and well-being without incurring an extra tax burden.  There are direct deposit and debit card features.
  6. The funds deposited in the 529 ABLE account are not subject to the $2000 maximum personal asset limit required to qualify for public benefits like Medicaid and Supplemental Security Income. However, if the account balance grows to over $100,000, SSI benefits will be suspended.
  7. Funds within the 529 ABLE grow tax free…AND…as long as the distributions are for qualified expenses, there are no taxes due on the growth when the funds are withdrawn!
  8. Set up of a 529 ABLE account is relatively simple, without the expense, complexity or IRS filing requirements of trust accounts that are used to meet the same general objectives of providing funds for individuals with special medical/health and welfare needs.
  9. The ABLE act authorized states to establish the accounts, however, establishment was not required. Each state has unique characteristics that pertain to additional tax savings and the treatment or reimbursement of state benefits upon the death of the beneficiary.
  10. According to the ABLE National Resource Center, as of August 2018, 29 states established ABLE programs with a cumulative of $100,000,000, in 20,000 accounts, with an average of $5000 of savings per account.

Opioid Overdose DeathsAs calamitous as the graph above appears, in December 2017 the National Institute on Drug Abuse published an overview of the results of the Monitoring the Future survey, a large-scale federal survey described as a continuing study of American youth.  Two of the several highlights of the survey were:  1) while adult opioid use rates remain relatively high, the data shows that teen misuse is less frequent than ten years prior;  and 2) teens reported that narcotics other than heroine were not as easy to acquire as they used to be in the past (In 2017, 35.8% of 12th graders felt they were easy to obtain, versus 54% in 2010).[i]   View commentary by Dr. Nora Volkow, Director of the National Institute of Drug Abuse here.

However, the graph displays number of opioid deaths, not number of people “living in hell” per se.  Those that are still struggling through the addiction contend with the economic and social barriers to recovery on a daily basis.  Consider the Bureau of Labor Statistics Job Outlook for substance abuse, behavioral disorder and mental health counselors.

Behavior Health Career InfoEmployment of substance abuse, behavioral disorder, and mental health counselors is projected to grow 23 percent from 2016 to 2026, much faster than the average for all occupations. Employment growth is expected as people continue to seek addiction and mental health counseling services.

Demand for substance abuse, behavioral disorder, and mental health counselors is also expected to increase as states seek treatment and counseling services for drug offenders rather than jail time. In recent years, the criminal justice system has recognized that drug and other substance abuse addicts are less likely to offend again if they get treatment for their addiction. As a result, sentences often require drug offenders to attend treatment and counseling programs. In addition, some research suggests that these programs are more cost-effective than incarceration and states may use them as a method to reduce recidivism rates. In addition, there will be a continued need for counselors to work with military veterans to provide them the appropriate mental health or substance abuse counseling care. [ii]

A premise of “Thief” is that the opioid epidemic is systemic.  “Thief – Overcoming Economic and Social Barriers to Recovery” dealt with some of the social, political, legal and financial planning issues that planners and clients must contend with during human capital recovery.   On the road to recovery, opioid use disorder patients receive financial, social and emotional support in the form of pooled funds for groceries, transportation, educational and vocational experience expenses, dual diagnosis medication payments, rent payments, behavioral health therapy, and several iterations of treatment.  The SSA List of Impairments identifies conditions that are severe enough to prevent gainful activity or to cause severe functional limitations that are permanent or will result in death—a tall hurdle that currently applies to 529 ABLE accounts.  Recovery from OUD is very possible with support systems that provide long-term proactive management of the recovery with appropriate medication and supportive social and professional networks willing to create an environment for change.  There are no easy, standardized solutions, but society, as a collective, can provide the tools to help families and communities help themselves by:  1) providing the ability to pool assets from several people in a tax advantaged manner ; and 2) accountability for expenditures.  The 529 ABLE could be expanded to be such a tool in the midst of the opioid epidemic by not only increasing the age qualification limit, but also including OUD sufferers with documented dual diagnosis treatment as qualified disabled persons.

The plaintiffs in the ACLU of Washington case against Whatcom County and the Sherriff’s Department were teenagers when they became addicted to opiates and suffered from OUD for at least ten years prior to the incarceration that prompted the lawsuit.  BLS statistics indicate that the need for behavioral health professionals will increase dramatically between now and 2026.  Behavioral health professionals and the criminal justice system are adjusting their approach to counseling, diagnosis and incarceration.

The 529 ABLE account is not meant to transfer and preserve wealth.  Families on the economic margins engage in a form of financial planning by pooling extremely limited resources for the benefit of a beneficiary.  Why not expand the reach of an account type that is meant to (according to Section 101 of the ABLE Act of 2014):

1)     Encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life; and

2)     Provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program under title XIX of the Social Security Act, the supplemental security income program under title XVI of such Act, the beneficiary’s employment, and other sources.

…for the most vulnerable, for the sake of OUD beneficiaries and contributors?

It is worth considering.

Terry

[i] Kaiser Family Foundation, Opioid Overdose Deaths By Age Group, State Health Facts Tool, https://www.kff.org/other/state-indicator/opioid-overdose-deaths-by-age-group (visited December 12, 2018)

[ii] Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Substance Abuse, Behavioral Disorder, and Mental Health Counselors,
on the Internet at https://www.bls.gov/ooh/community-and-social-service/substance-abuse-behavioral-disorder-and-mental-health-counselors.htm (visited November 22, 2018)

Decluttering For Dollars

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Wow!  My heart jumps with just a little bit of excitement when I discover some cash in the pocket of a jacket that I have not donned for a couple of years.  Have you ever picked up laundry from your local drycleaner to find a twenty-dollar bill pinned to the claim check!? Winning!  (Insert visual of you doing the running man and flexing your muscles!)  Sometimes I place the funds in a “change” jar along with other treasure found between the sofa cushions or under the car seats.  If I find a fair amount of “change”, let’s say five dollars or more, I set aside the recovered funds for a specific savings goal.  I also give consideration to decluttering the area where the money was found.  The final thought leads me to this question:  When was the last time you checked your state’s department of revenue or controller website for unclaimed property that belongs to you?

If you have ever changed your residence, changed employers, not filed taxes because you were not required to file, or had accounts at or ownership in a company that went bankrupt, you should take a look at government unclaimed property websites for intangible property that belongs to you.   Inactive or closed consumer accounts with remaining balances are considered “abandoned” or “unclaimed.”  Each state is required to set up laws that require:  1) businesses to transfer the unclaimed property to a designated division or agency (the state controller, for example) after three years of inactivity; 2) the state to hold the assets for the benefit of the consumers, and potentially their heirs, until the items are claimed; 3) the state agency or unclaimed property organization to return the assets to the rightful owners upon verification of identity; and 4) the state agency or unclaimed property organization to maintain a database and a process for attempting to locate the owners and heirs of abandoned property.  Vehicles, real estate and most physical property are not considered unclaimed property.  Refer to individual state statutes and unclaimed property divisions for specifics on laws, procedures and policies.

In fiscal year 2015, state governments returned $3.235 billion dollars to rightful owners, according to the National Association of Unclaimed Property Administrators (NAUPA), a non profit organization comprised of professionals that are responsible for administration of state unclaimed property programs.  During that same year $7.763 billion was collected!  These funds go unclaimed because the business entities that owe the funds lose contact with the individuals that own the funds.  NAUPA recommends consumers cash checks received in a timely manner, respond to legitimate requests for account balances and stockholder proxies, record safe deposit box information and give an extra key to a trusted person, and prepare a will that delineates how your assets are to be distributed.  Talk with your financial planning and/or estate planning professionals to assist you in developing an estate plan that best preserves your privacy and ensures your assets are distributed as you wish.

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Check the websites for the following organizations to determine if you own a portion of the billions of dollars waiting to be claimed by rightful owners.  While this is not an exhaustive list, it’s a good starting place.

  • Your state’s (current and previous) department of revenue or controller for refunds from bank accounts, insurance proceeds, securities (stocks, bonds, and mutual funds), items abandoned in safe deposit boxes and utility and phone company balances.  You may also find other undeliverable funds like uncashed payroll checks, insurance payments and travelers’ checks.
  • The US Department of Labor Wage and Hour Division for unclaimed wages from a previous employer
  • Pension Benefit Guaranty Corporation for unclaimed pensions
  • Internal Revenue Service for unclaimed refunds
  • US Department of the Treasury Bureau of the Fiscal Service for unclaimed property owed to you by foreign governments or from foreign transactions

A list of more organizations that facilitate the collection and delivery of unclaimed property can be found at www.usa.gov/unclaimed-moneyAnd remember, the government is not going to call you about unclaimed funds, so BE CAREFUL to avoid scams.  Do not send money or provide personal information to someone that promises to send you “free money.”  Review the Federal Trade Commission Consumer Information website at www.consumer.ftc.gov/articles/0048-government-imposter-scams for tips on avoiding government imposter scams.

Consider the amount you discover and how best to use the funds in accordance with your financial planning goals.  Use the funds to supplement a rainy-day savings account, fund a retirement account, start an education account, pay for school supplies, or donate to a non-profit of your choice.  You may decide that it is just the right amount to go out for coffee with a friend, ice-cream with the kids, or a family day at a local museum.  After all, I am a firm believer in investing in relationships with the ones we love and our communities.  Whatever you decide to do with the funds, the key take away is that they are YOUR funds, so put them to work as you see fit.  Think of the search for unclaimed property as a simple treasure hunt-like exercise in decluttering your financial past and making the most of a sweet surprise along your journey to your financial planning goals.  – Terry