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S 2987Benefit Programs

State Affairs and Government - Office of Health and Human Services

This bill prevents the state from taking money from disability savings accounts after the owner dies to pay back benefits.

Introduced36 Yea1 Nay1 Not voting
Population
Affected
8
Email Legislator
Introduced Mar 4, 2026Committee Senate Judiciary

Plain-English Summary

This legislation amends the rules governing ABLE savings accounts, which are tax-advantaged financial accounts designed for individuals with disabilities. Specifically, the bill prohibits the state of Rhode Island from acting as a creditor to seize funds remaining in an ABLE account upon the death of the designated beneficiary. Currently, the state can claim these funds to recoup costs for Medicaid benefits provided. Under this new rule, the state cannot seek payment from these accounts after the beneficiary dies, unless federal law explicitly requires such recovery.

For younger readers

There is a special type of savings account called an ABLE account that helps people with disabilities save money for things they need. Under current rules, if the person who owns the account dies, the state government can try to take the leftover money to pay itself back for healthcare it gave that person. This new law says the government cannot take that money anymore. Instead, the money can stay with the person's family, unless a strict national law forces the state to take it. This helps keep the money safe for the people it was meant to help.

Who & Where It Applies

Impacted groups
People with disabilitiesFamilies of disabled individualsABLE account holdersEstate plannersDepartment of Human Services
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
Amount unknown
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Protects the financial assets of individuals with disabilities, allowing for the intergenerational transfer of wealth within vulnerable families rather than seizing it for the state.
  • Strengthens the social safety net by encouraging families to save for disability-related expenses without the fear that the government will confiscate the savings later.
  • Corrects a systemic inequity where the state balances its books on the backs of deceased disabled individuals, ensuring more dignity and financial security for this marginalized community.
  • Reduces the amount of funds recovered by the state, which could theoretically decrease the total pool of money available for public services and Medicaid for other low-income residents.
  • Could be viewed as prioritizing the inheritance of specific families over the communal need to replenish state welfare funds used to provide care.
  • The clause "except as required by federal law" may result in confusion or disappointment if federal Medicaid estate recovery mandates override this state protection, offering false hope to families.
For Conservatives
  • Protects private property rights by preventing the government from seizing personal assets and savings upon the death of an individual.
  • Reduces government overreach and limits the power of the state to interfere with family inheritance and estate planning.
  • Encourages personal responsibility and private saving for healthcare and disability needs, rather than total reliance on state funding without asset accumulation.
  • Prevents the state from recovering taxpayer money spent on benefits, potentially shifting the financial burden to other taxpayers to make up the difference.
  • Violates the fiscal principle that public assistance is a loan of sorts that should be repaid from the recipient's estate if assets are available.
  • Creates a specific financial shelter that privileges one group of benefit recipients over others who may still be subject to estate recovery.

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.