H 8184Benefit Programs

State Affairs and Government - Office of Health and Human Services

Prohibits the state from seizing funds in a disabled person's ABLE savings account to repay benefits after they die.

Held for study

Population
Affected

Introduced Feb 27, 2026Committee House Finance

Plain-English Summary

This legislation modifies the rules governing ABLE accounts, which are tax-advantaged savings accounts for individuals with disabilities. Specifically, it prevents the state of Rhode Island from claiming the money remaining in these accounts after the beneficiary passes away to pay back Medicaid or other state benefits received during the person's life. The bill ensures that the state cannot seize these funds or act as a creditor against the account upon the beneficiary's death, unless federal law explicitly requires them to do so.

For younger readers

There are special bank accounts called ABLE accounts that help people with disabilities save money for things they need without losing their government help. Before this law, if the person who owned the account died, the government could take the money left in the account to pay itself back for the help it gave them. This new rule says the government cannot take that money anymore. This means the money can stay with the person's family or friends instead of being taken by the state.

Who & Where It Applies

Impacted groups

Individuals with disabilitiesFamilies of ABLE account holdersEstate planning attorneysOffice of Health and Human ServicesMedicaid recipients

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

Amount unknown

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Promotes economic justice by allowing individuals with disabilities to build and pass on generational wealth, rather than having their savings seized by the state upon death.
Strengthens the social safety net by ensuring that accepting government assistance does not require the forfeiture of personal assets and savings.
Protects vulnerable populations from predatory state debt collection practices, ensuring that families of disabled individuals are not financially penalized for their loved one's reliance on public services.
Reduces the amount of funds recouped by the state, which could theoretically decrease the total pool of money available for other public health and human services programs.
May benefit wealthier families who can afford to max out ABLE contributions more than the poorest individuals, potentially widening a wealth gap within the disability community.
Limits the state's ability to recycle funds from unused accounts back into the system to help current beneficiaries who are in immediate need.

For Conservatives

Protects private property rights by preventing the government from seizing personal assets and savings, effectively eliminating a "death tax" on the disabled.
Limits the reach and power of the state bureaucracy, preventing government agencies from acting as creditors against private citizens.
Encourages personal responsibility and financial independence by removing the disincentive to save money caused by the threat of government confiscation.
Prevents the state from recovering taxpayer money spent on benefits, potentially shifting the financial burden of these programs to the general taxpayer base.
Allows individuals to retain private assets while simultaneously utilizing publicly funded safety nets, which may violate the principle that welfare should be a last resort.
Could lead to long-term budget shortfalls in state entitlement programs if cost-recovery mechanisms are systematically dismantled.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 5 additions · 3 deletions

It is enacted by the General Assembly as follows:

SECTION 1. Section 42-7.2-20.8 of the General Laws in Chapter 42-7.2 entitled "Office of Health and Human Services" is hereby amended to read as follows: 42-7.2-20.8. Creditors. Notwithstanding any provision of the general or public laws to the contrary, money in the ABLE program shall be exempt from creditor process and shall not be liable to attachment, garnishment, or other process, nor shall it be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of any contributor or beneficiary; ~~provided, however, that the state of residency of the designated beneficiary of an ABLE account~~ ~~shall be a creditor of such account in the event of the death of the designated beneficiary~~. Upon death of a designated beneficiary, an agency or instrumentality of the state shall not seek payment pursuant to 26 U.S.C. § 529A from any ABLE savings trust account or its proceeds for benefits provided to a designated beneficiary, except as required by federal law.

SECTION 2. This act shall take effect upon passage.