First National Bank of Omaha is days away from becoming the first bank to offer an ABLE plan nationwide. It’s big news for the estimated six million individuals and families who stand to benefit. ABLE accounts allow families to set aside money that can be used tax-free for a disabled person’s expenses without losing government benefits.
To understand the importance of this, read this overview of ABLE accounts.
After more than a year of planning, First National Bank of Omaha is ready to sign up its first account owners. Deborah Goodkin, program manager for the Enable Savings Plan, shared the bank’s journey.
Q: What prompted the bank to participate in the ABLE program?
A: We had been investigating the possibility of doing an ABLE plan since its Passage in December 2014. We strive to serve the community we live in and believe the individuals with disabilities and their families are a part of that community. We never hesitated and never thought that we were going down an unknown road because we knew it was the right thing to do.
Q: What were some of the challenges in offering a national program?
A: As with our NEST 529 College Savings Plans, for which we are also program manager, the problem is usually marketing and distribution. How does someone in one state influence those in other states across the country? In the case of ABLE, the industry is very lucky to have national organizations that are out there promoting and encouraging their constituents to open an ABLE account.
Q: How will the program work?
A: Individuals can open an account online or by downloading a form from enablesavings.com. Almost all account maintenance, contributions and withdrawals can be made from our ADA website. We also have an experienced and excellent call center that can answer questions. Account management can be done online, by phone, or by filling out a form.
Q: Who is eligible?
A: An individual is eligible to open an account if the disability was present before the age of 26 and is 1) entitled to benefits on blindness or disability under Title II (eligible for SSI) or XVI (eligible for SSDI) of the Social Security Act, or 2) has a written diagnosis from a licensed physician that he or she has a medically determinable physical or mental impairment, which results in marked or severe functional limitations, and which can be expected to result in death or can be expected to last for a continuous period of no less than 12 months.
Q: Why is ABLE an important program?
A: Before ABLE, individuals with disabilities who received resource-based benefits (SSI, SAP and Medicaid) and have more than $2,000 in assets in their name would lose all or a part of their benefits. With this limit, it means that they cannot work and cannot take care of themselves. In addition, it forces them to live below the poverty level. Parents and grandparents can’t even give these individuals birthday or Christmas gifts. Parents worry about who will support their child with disabilities when they pass away.
The ABLE Act authorized individuals with disabilities to open tax-exempt savings accounts to save for disability-related expenses without impacting current or future eligibility for resource-based benefits. They can have financial resources available to them to help them live as normal a life as possible. It also enables them to live within their community and meet their dreams and aspirations for the future. By being financially independent, these individuals can do what a lot of us take for granted – like going to the movies with their own money or living in their own apartment – to be included in the community, not excluded.
Q: What are your goals for the program?
A: To provide a simple, easy to understand and manage ABLE savings plan that both encourages individuals to save for their future and allows them to easily withdraw money to pay for their everyday expenses.
Q: Any advice for other banks about participating/implementing a program?
A: Opening an ABLE plan is not easy and takes an enormous amount of work to implement and manage, without understanding how many individuals will open an account and how the accounts will be used. However, it is an important product for the community, which makes all the work worth it.
Q: Why do you think there hasn’t been wider adoption?
A: Institutions are waiting to see if rules will change, if the age limit for disability determination will increase, and if there will be additional incentives that will make it financially viable. It takes a lot of money to change systems, develop rules and implement an entirely new financial product without knowing how many people will open accounts. We are proud to be the first nationwide program.