House File 2526 - Introduced HOUSE FILE 2526 BY COMMITTEE ON HUMAN RESOURCES (SUCCESSOR TO HF 2295) A BILL FOR An Act relating to transfer between trusts for persons with 1 disabilities. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5223HV (1) 88 pf/rh

H.F. 2526 Section 1. Section 12I.3, subsection 1, Code 2020, is 1 amended by adding the following new paragraph: 2 NEW PARAGRAPH . g. Any funds retained in a medical 3 assistance special needs trust pursuant to chapter 633C, or in 4 a supplemental needs trust pursuant to chapter 634A, may be 5 transferred to the Iowa ABLE savings plan trust account of a 6 designated beneficiary who is also the beneficiary of any such 7 trust, in accordance with the applicable provisions of chapters 8 633C, 634A, and this chapter. 9 Sec. 2. Section 633C.2, Code 2020, is amended to read as 10 follows: 11 633C.2 Disposition of medical assistance special needs 12 trusts. 13 Any income or assets added to or received by and any income 14 or principal retained in a medical assistance special needs 15 trust shall be used in accordance with a standard that is 16 no more restrictive than specified under federal law. All 17 distributions from a medical assistance special needs trust 18 shall be for the sole benefit of the beneficiary to enhance 19 the quality of life of the beneficiary, and the trustee shall 20 have sole discretion regarding such disbursements to ensure 21 compliance with beneficiary eligibility requirements. Any 22 funds retained in the medical assistance special needs trust of 23 a beneficiary who is also a designated beneficiary as defined 24 in section 12I.1 may be transferred to the Iowa ABLE savings 25 plan trust account of the designated beneficiary in accordance 26 with this chapter and chapter 12I. Any distinct disbursement 27 in excess of one thousand dollars shall be subject to review by 28 the district court sitting in probate. The department shall 29 adopt rules pursuant to chapter 17A for the establishment and 30 disposition of medical assistance special needs trusts in 31 accordance with this section . 32 Sec. 3. Section 634A.2, Code 2020, is amended by adding the 33 following new subsection: 34 NEW SUBSECTION . 8. Any funds retained in a supplemental 35 -1- LSB 5223HV (1) 88 pf/rh 1/ 2

H.F. 2526 needs trust of a beneficiary who is also a designated 1 beneficiary as defined in section 12I.1 may be transferred to 2 the Iowa ABLE savings plan trust account of the designated 3 beneficiary in accordance with this chapter and chapter 12I. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanation’s substance by the members of the general assembly. 7 This bill relates to trusts for persons with disabilities. 8 The bill provides that any funds retained in a medical 9 assistance special needs trust or in a supplemental needs trust 10 of a beneficiary with a disability who is also a designated 11 beneficiary of an Iowa ABLE saving plan trust account may be 12 transferred to the Iowa ABLE savings plan trust account of the 13 designated beneficiary in accordance with the provisions of the 14 Code chapters applicable to the specific trusts. 15 The disabilities expenses savings plan trust is also known 16 as the Iowa ABLE savings plan trust which was established as 17 a qualified ABLE program under section 529A of the Internal 18 Revenue Code. The purpose of ABLE savings accounts is to 19 encourage and assist individuals and families in saving 20 private funds for the purpose of supporting individuals with 21 disabilities to maintain health, independence, and quality 22 of life and to provide secure funding for disability-related 23 expenses on behalf of designated beneficiaries with 24 disabilities that will supplement, but not supplant, benefits 25 provided through private insurance, the Medicaid program, 26 the federal supplemental security income program, and other 27 sources. ABLE savings accounts allow eligible individuals the 28 opportunity to save and fund a variety of qualified disability 29 expenses without endangering eligibility for certain benefits 30 such as Medicaid and supplemental security income. 31 -2- LSB 5223HV (1) 88 pf/rh 2/ 2