Allows withdrawals from family tuition accounts to pay for treatment of substance use disorder, including detoxification and rehabilitation for the designated beneficiary.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5748
SPONSOR: Slater TITLE OF BILL:
An act to amend the education law, in relation to family tuition account
withdrawals for treatment of substance use disorder
PURPOSE OR GENERAL IDEA OF BILL:
To allow family tuition account withdrawals for substance abuse rehabil-
itation.
SUMMARY OF PROVISIONS:
Section 1 - Subdivision 5 of Section 695-e of the Education Law, as
amended by Chapter 593 of the Laws of 2003, is amended to include as a
qualified withdrawal from a family tuition account funds to pay for the
designated beneficiary's treatment for alcohol or substance abuse. Mini-
mum treatment parameters are set up to qualify as a rehabilitation
program.
JUSTIFICATION:
Approximately 1.4 million New Yorkers suffer from a substance abuse
disorder. The heroin and opioid epidemic has fueled the increased need
for substance abuse services in the state. In fact, the state documented
a 115% increase in heroin treatment admissions in Upstate New York and a
116% increase on Long Island between the years 2005-2014, according to a
2016 report from the New York State Association of Counties.
Substance abuse services can cost anywhere from $5,000 to $50,000 a
month depending on the facility and the type of treatment provided,
according to DrugRehab.com. These exorbitant costs are crippling fami-
lies who are willing to do whatever it takes to save their loved one's
life. Media reports detail anguished families spending their life's
savings, draining retirement accounts, and going into massive debt
trying to save their loved ones from the clutches of addiction. 'Even
with insurance coverage, opioid addiction treatment costs can crush a
family. Americans covered by employer health insurance received $2.6
billion worth of treatment for opioid addiction and overdoses in 2016,
with insurance covering approximately $2.3 billion and families paying
$355 million out-of-pocket, according to a report by the Kaiser Family
Foundation. More than half of this spending was for the treatment of
workers' children.
Parents need more options to help them pay for rehabilitative services
for their children's substance abuse or alcohol dependency without going
into paralyzing debt. Being able to access funds put away for college in
a 529 family tuition account will go a long way into helping these fami-
lies pay for the treatment to help their children battle the disease of
addiction.
PRIOR LEGISLATIVE HISTORY:
2017-2018: S8334
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be Determined
EFFECTIVE DATE:
Immediately
STATE OF NEW YORK
________________________________________________________________________
5748
2023-2024 Regular Sessions
IN ASSEMBLY
March 23, 2023
___________
Introduced by M. of A. SLATER -- read once and referred to the Committee
on Higher Education
AN ACT to amend the education law, in relation to family tuition account
withdrawals for treatment of substance use disorder
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 5 of section 695-e of the education law, as
2 amended by chapter 593 of the laws of 2003, is amended to read as
3 follows:
4 5. a. An account owner may withdraw all or part of the balance from an
5 account on sixty days notice or such shorter period as may be authorized
6 under rules governing the program. Such rules shall include provisions
7 that will generally enable the determination as to whether a withdrawal
8 is a nonqualified withdrawal or a qualified withdrawal.
9 b. For purposes of this subdivision, a qualified withdrawal shall
10 include a withdrawal in which the account owner withdraws all or part of
11 a balance from an account to fund treatment of substance use disorder,
12 including detoxification and rehabilitation, for the designated benefi-
13 ciary. Such treatment shall consist of at least fifteen hours and
14 include, but need not be limited to, classroom instruction in areas
15 deemed suitable by the commissioner.
16 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01838-01-3
