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Senate File 2070 - IntroducedA Bill ForAn Act 1relating to trusts for persons with disabilities.
2BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 12I.3, subsection 1, Code 2020, is
2amended by adding the following new paragraph:
3 NEW PARAGRAPH. g. Any funds retained in a medical
4assistance special needs trust pursuant to chapter 633C, or in
5a supplemental needs trust pursuant to chapter 634A, may be
6transferred to the Iowa ABLE savings plan trust account of a
7designated beneficiary who is also the beneficiary of any such
8trust, in accordance with the applicable provisions of chapters
9633C, 634A, and this chapter.
10 Sec. 2. Section 12I.4, subsection 3, Code 2020, is amended
11to read as follows:
123. Moneys in the account of a designated beneficiary may
13 shall not be claimed by the Iowa Medicaid program as provided
14 authorized in section 529A(f) of the Internal Revenue Code and
15subject to limitations imposed by the treasurer of state unless
16such claim is required to maintain qualified ABLE program
17status under section 529A of the Internal Revenue Code.
18 Sec. 3. Section 249A.53, Code 2020, is amended by adding the
19following new subsection:
20 NEW SUBSECTION. 3. a. Following the death of an individual
21who is a designated beneficiary of an account established under
22a participation agreement pursuant to chapter 12I, all of the
23following shall apply to the extent permitted pursuant to
24chapter 12I and under federal law including section 529A of the
25Internal Revenue Code:
26(1) The department shall not seek recovery of any account
27balance remaining in the designated beneficiary’s account for
28medical assistance paid to or on behalf of the designated
29beneficiary on or after the date the participation agreement
30was entered into and the account established for the designated
31beneficiary.
32(2) The department shall not file a claim for payment under
33section 529A(f) of the Internal Revenue Code.
34(3) Any account balance remaining in the designated
35beneficiary’s account may be transferred to an account for
-1-1another eligible individual specified by the designated
2beneficiary, or if another eligible beneficiary is not so
3designated, then the account balance shall be transferred to
4the estate of the designated beneficiary or to the successor
5as defined in section 633.356.
6b. For the purposes of this section, “designated
7beneficiary”, “Internal Revenue Code”, and “participation
8agreement” mean the same as defined in section 12I.1.
9c. For the purposes of this section, “eligible individual”
10means the same as defined in section 529A of the Internal
11Revenue Code.
12 Sec. 4. Section 633C.2, Code 2020, is amended to read as
13follows:
14633C.2 Disposition of medical assistance special needs
15trusts.
16Any income or assets added to or received by and any income
17or principal retained in a medical assistance special needs
18trust shall be used in accordance with a standard that is
19no more restrictive than specified under federal law. All
20distributions from a medical assistance special needs trust
21shall be for the sole benefit of the beneficiary to enhance
22the quality of life of the beneficiary, and the trustee shall
23have sole discretion regarding such disbursements to ensure
24compliance with beneficiary eligibility requirements. Any
25funds retained in the medical assistance special needs trust of
26a beneficiary who is also a designated beneficiary as defined
27in section 12I.1 may be transferred to the Iowa ABLE savings
28plan trust account of the designated beneficiary in accordance
29with this chapter and chapter 12I. Any distinct disbursement
30in excess of one thousand dollars shall be subject to review by
31the district court sitting in probate. The department shall
32adopt rules pursuant to chapter 17A for the establishment and
33disposition of medical assistance special needs trusts in
34accordance with this section.
35 Sec. 5. Section 634A.2, Code 2020, is amended by adding the
-2-1following new subsection:
2 NEW SUBSECTION. 8. Any funds retained in a supplemental
3needs trust of a beneficiary who is also a designated
4beneficiary as defined in section 12I.1 may be transferred to
5the Iowa ABLE savings plan trust account of the designated
6beneficiary in accordance with this chapter and chapter 12I.
7EXPLANATION
8The inclusion of this explanation does not constitute agreement with
9the explanation’s substance by the members of the general assembly.
10This bill relates to trusts for persons with disabilities.
11The bill provides that any funds retained in a medical
12assistance special needs trust or in a supplemental needs trust
13of a beneficiary with a disability who is also a designated
14beneficiary of an Iowa ABLE saving plan trust account may be
15transferred to the Iowa ABLE savings plan trust account of the
16designated beneficiary in accordance with the provisions of the
17Code chapters applicable to the specific trusts.
18The bill also provides that following the death of an
19individual who is a designated beneficiary of an ABLE savings
20account established under a participation agreement pursuant
21to Code chapter 12I (disabilities expenses savings plan
22trust), to the extent permitted pursuant to Code chapter 12I
23and under federal law including section 529A of the Internal
24Revenue Code, the department of human services (DHS) shall
25not seek recovery of any account balance remaining in the
26designated beneficiary’s account for medical assistance paid
27to or on behalf of the designated beneficiary on or after
28the date the participation agreement was entered into and an
29account established for the designated beneficiary; DHS shall
30not file a claim for payment under section 529A(f) of the
31Internal Revenue Code; and any account balance remaining in
32the designated beneficiary’s account may be transferred to
33an account for another eligible individual specified by the
34designated beneficiary, or if another eligible beneficiary
35is not so designated, then the account balance shall be
-3-1transferred to the estate of the designated beneficiary or to
2the successor.
3The bill provides definitions for terms used in the bill and
4makes conforming Code changes.
5The disabilities expenses savings plan trust is also known
6as the Iowa ABLE savings plan trust which was established as
7a qualified ABLE program under section 529A of the Internal
8Revenue Code. The purpose of ABLE savings accounts is to
9encourage and assist individuals and families in saving
10private funds for the purpose of supporting individuals with
11disabilities to maintain health, independence, and quality
12of life and to provide secure funding for disability-related
13expenses on behalf of designated beneficiaries with
14disabilities that will supplement, but not supplant, benefits
15provided through private insurance, the Medicaid program,
16the federal supplemental security income program, and other
17sources. ABLE savings accounts allow eligible individuals the
18opportunity to save and fund a variety of qualified disability
19expenses without endangering eligibility for certain benefits
20such as Medicaid and supplemental security income.
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2BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 12I.3, subsection 1, Code 2020, is
2amended by adding the following new paragraph:
3 NEW PARAGRAPH. g. Any funds retained in a medical
4assistance special needs trust pursuant to chapter 633C, or in
5a supplemental needs trust pursuant to chapter 634A, may be
6transferred to the Iowa ABLE savings plan trust account of a
7designated beneficiary who is also the beneficiary of any such
8trust, in accordance with the applicable provisions of chapters
9633C, 634A, and this chapter.
10 Sec. 2. Section 12I.4, subsection 3, Code 2020, is amended
11to read as follows:
123. Moneys in the account of a designated beneficiary may
13 shall not be claimed by the Iowa Medicaid program as provided
14 authorized in section 529A(f) of the Internal Revenue Code and
15subject to limitations imposed by the treasurer of state unless
16such claim is required to maintain qualified ABLE program
17status under section 529A of the Internal Revenue Code.
18 Sec. 3. Section 249A.53, Code 2020, is amended by adding the
19following new subsection:
20 NEW SUBSECTION. 3. a. Following the death of an individual
21who is a designated beneficiary of an account established under
22a participation agreement pursuant to chapter 12I, all of the
23following shall apply to the extent permitted pursuant to
24chapter 12I and under federal law including section 529A of the
25Internal Revenue Code:
26(1) The department shall not seek recovery of any account
27balance remaining in the designated beneficiary’s account for
28medical assistance paid to or on behalf of the designated
29beneficiary on or after the date the participation agreement
30was entered into and the account established for the designated
31beneficiary.
32(2) The department shall not file a claim for payment under
33section 529A(f) of the Internal Revenue Code.
34(3) Any account balance remaining in the designated
35beneficiary’s account may be transferred to an account for
-1-1another eligible individual specified by the designated
2beneficiary, or if another eligible beneficiary is not so
3designated, then the account balance shall be transferred to
4the estate of the designated beneficiary or to the successor
5as defined in section 633.356.
6b. For the purposes of this section, “designated
7beneficiary”, “Internal Revenue Code”, and “participation
8agreement” mean the same as defined in section 12I.1.
9c. For the purposes of this section, “eligible individual”
10means the same as defined in section 529A of the Internal
11Revenue Code.
12 Sec. 4. Section 633C.2, Code 2020, is amended to read as
13follows:
14633C.2 Disposition of medical assistance special needs
15trusts.
16Any income or assets added to or received by and any income
17or principal retained in a medical assistance special needs
18trust shall be used in accordance with a standard that is
19no more restrictive than specified under federal law. All
20distributions from a medical assistance special needs trust
21shall be for the sole benefit of the beneficiary to enhance
22the quality of life of the beneficiary, and the trustee shall
23have sole discretion regarding such disbursements to ensure
24compliance with beneficiary eligibility requirements. Any
25funds retained in the medical assistance special needs trust of
26a beneficiary who is also a designated beneficiary as defined
27in section 12I.1 may be transferred to the Iowa ABLE savings
28plan trust account of the designated beneficiary in accordance
29with this chapter and chapter 12I. Any distinct disbursement
30in excess of one thousand dollars shall be subject to review by
31the district court sitting in probate. The department shall
32adopt rules pursuant to chapter 17A for the establishment and
33disposition of medical assistance special needs trusts in
34accordance with this section.
35 Sec. 5. Section 634A.2, Code 2020, is amended by adding the
-2-1following new subsection:
2 NEW SUBSECTION. 8. Any funds retained in a supplemental
3needs trust of a beneficiary who is also a designated
4beneficiary as defined in section 12I.1 may be transferred to
5the Iowa ABLE savings plan trust account of the designated
6beneficiary in accordance with this chapter and chapter 12I.
7EXPLANATION
8The inclusion of this explanation does not constitute agreement with
9the explanation’s substance by the members of the general assembly.
10This bill relates to trusts for persons with disabilities.
11The bill provides that any funds retained in a medical
12assistance special needs trust or in a supplemental needs trust
13of a beneficiary with a disability who is also a designated
14beneficiary of an Iowa ABLE saving plan trust account may be
15transferred to the Iowa ABLE savings plan trust account of the
16designated beneficiary in accordance with the provisions of the
17Code chapters applicable to the specific trusts.
18The bill also provides that following the death of an
19individual who is a designated beneficiary of an ABLE savings
20account established under a participation agreement pursuant
21to Code chapter 12I (disabilities expenses savings plan
22trust), to the extent permitted pursuant to Code chapter 12I
23and under federal law including section 529A of the Internal
24Revenue Code, the department of human services (DHS) shall
25not seek recovery of any account balance remaining in the
26designated beneficiary’s account for medical assistance paid
27to or on behalf of the designated beneficiary on or after
28the date the participation agreement was entered into and an
29account established for the designated beneficiary; DHS shall
30not file a claim for payment under section 529A(f) of the
31Internal Revenue Code; and any account balance remaining in
32the designated beneficiary’s account may be transferred to
33an account for another eligible individual specified by the
34designated beneficiary, or if another eligible beneficiary
35is not so designated, then the account balance shall be
-3-1transferred to the estate of the designated beneficiary or to
2the successor.
3The bill provides definitions for terms used in the bill and
4makes conforming Code changes.
5The disabilities expenses savings plan trust is also known
6as the Iowa ABLE savings plan trust which was established as
7a qualified ABLE program under section 529A of the Internal
8Revenue Code. The purpose of ABLE savings accounts is to
9encourage and assist individuals and families in saving
10private funds for the purpose of supporting individuals with
11disabilities to maintain health, independence, and quality
12of life and to provide secure funding for disability-related
13expenses on behalf of designated beneficiaries with
14disabilities that will supplement, but not supplant, benefits
15provided through private insurance, the Medicaid program,
16the federal supplemental security income program, and other
17sources. ABLE savings accounts allow eligible individuals the
18opportunity to save and fund a variety of qualified disability
19expenses without endangering eligibility for certain benefits
20such as Medicaid and supplemental security income.
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