Special needs families face increased financial pressure in Covid-19 crisis. This can help

For millions of students with disabilities and special needs in U.S. public and private schools, the shift to remote learning has created an even greater host of challenges — and, in some cases, additional financial pressures for their families. 

Special needs students require varied educational and support services. In this coronavirus pandemic, many families are facing tough decisions as the responsibilities for health care, therapies and education are falling on their shoulders. Meanwhile, many parents are also facing their own financial challenges.

“Parents have to decide, ‘Okay, how am I going to address this gap?’ And quite often they have to pay out of pocket for those services,” said Jessica Tuman, vice president of Voya Cares Center of Excellence at Voya Financial, which focuses on planning for individuals with special needs and their families. 

Dori-Anne Newton of Hazlet, New Jersey, has overseen online classes and therapies for her almost 11-year-old daughter, Isla, who has Down’s syndrome, since her public school switched to virtual learning in the spring. Isla is receiving extended school year services this summer as part of the free, special education program offered by the school district. 

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For a while Dori and her husband, Jim, supplemented the school’s instruction and services with physical, occupational and speech therapies and private tutoring that they paid for out of pocket. 

“We’re on one income now. We’ve scaled back and taken that away,” said Dori-Anne, a freelance makeup artist who stopped working in March. 

The Newtons are considering homeschooling Isla and their 9-year-old son, Theo, who has ADHD and dyslexia. But they said that option may be too pricey. 

For the homeschooling programs Dori-Anne researched, “the range is between $5,000 and $10,000 per child for that curriculum,” she said. “And that wouldn’t even include their services. So we would have to supplement and do more therapy. When you opt out of the district’s virtual learning, you opt out of their services as well.”

“Generally, for a child who is identified as having special needs, the school district has to provide education and related services through their individualized education program, or IEP, which is mandated under federal law,” said Bernard A. Krooks, Esq., founding partner of Littman Krooks LLP and past president of the Special Needs Alliance, a national not-for-profit organization dedicated to assisting individuals with special needs and their families.

“Now some school districts are claiming they can’t offer the services they’re required to provide remotely,” Krooks said. And at some schools that are requiring students to attend class in person, parents have significant reservations about sending children with certain disabilities and special needs back into the building. “These are unchartered waters,” he said.

Krooks, Tuman and other financial and legal experts suggest that families of children with disabilities explore workplace benefits, special savings accounts and other resources to help bridge a financial gap. 

Employee benefits can help families save up to pay for therapies and other costs. A family can save up $7,100 pretax in a health savings account, or HSA, this year. And up to $2,750 in a flexible spending account, or FSA.

“If you haven’t enrolled in one of these plans, an FSA or HSA, then see if that’s open to you, because they’ve changed the rules and the regulations now so that you can actually open one this year throughout the course of 2020,” Tuman said. The IRS recently released guidance providing employers and employees with more flexibility during the Covid-19 pandemic in terms of what is covered and how to access FSAs, HSAs and other “cafeteria plans.”

Another savings option — an ABLE account — lets you save even more for a special needs child. You can put away up to $15,000 a year for a beneficiary. And the first $100,000 saved in an ABLE account will not jeopardize key government benefits, such as Supplemental Security Income (SSI) payments. 

“An ABLE account functions much like a 529 college savings plan, where money inside the account, including principal and earnings, can be withdrawn tax-free provided it is used to cover specific costs related to the person’s disability,” said author and certified financial planner Lili Vasileff of Wealth Protection Management in Woodbridge, Connecticut. “If you know people — friends, relatives — who are interested in contributing financially to help to support a special needs person, instead of giving a financial gift directly to the person, which can negatively impact their eligibility for government benefits, it can be preferable to make a contribution to the person’s ABLE account.”

For the Newtons, who now rely solely on Jim’s income, saving up to pay for extra services for their children is tough.

“We don’t have the resources to do it, the funds to do it,” Dori-Anne said. “We’re just trying to focus on getting through this really difficult educational time.”

There may be other alternatives to help pay for extra costs. Tuman said some health insurance plans may also cover special therapies, like applied behavorial analysis (ABA therapy) for children with autism, for example. 

Remember to ask your child’s doctor for a “letter of medical necessity,” she said, to verify that therapies, services and items that you’re purchasing are needed for your child’s diagnosis, treatment and/or medical condition. The IRS, for example, may require the doctor’s statement for certain eligible expenses to be covered by an FSA or HSA. 

Your list of added costs for your child can be daunting. So “be sure to consider tapping the many private funding sources that offer financial support to special needs people and their families — for equipment, treatment and more,” Vasileff said. “The eSpecial needs website and the Kaufman Children’s Center provide good starting points in the search for information on private funding sources.”

You may also find expert advocates through national nonprofit organizations that represent specific disabilities and special needs who can help you research options for your family’s particular needs. Voya also provides an extensive list of special needs planning tools and resources for caregiver, community, legal and financial support on its website.