Strengthened clawback protection for ABLE accounts advanced

Lawmakers gave first-round approval March 5 to a measure intended to encourage participation in the state’s Achieving a Better Life Experience program.

The ABLE program, administered by the state treasurer, provides tax-advantaged savings accounts used to pay for the qualified disability expenses of a designated beneficiary.

Current law prohibits the state from reclaiming money that remains in a beneficiary’s account after their death to pay for medical assistance received by the beneficiary or their spouse or dependent under the state’s Medicaid program.

LB1240, sponsored by Glenvil Sen. Dave Murman, would expand that prohibition, ensuring that funds distributed from an ABLE account upon a beneficiary’s death could not be reclaimed.

Without that provision, Murman said, many families hesitate to open an account for fear that the state could “claw back” money they have contributed.

“LB1240 seeks to add a simple protection to ensure those accounts are protected so Nebraskans can have the assurance that their dollars invested are safe,” he said.

The bill advanced to select file on a vote of 30-0.