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Yet More Worries for Expats over Obamacare

Article Summary:

January 1st, 2014, is when the national health care plan, The Patient Protection and Affordable Care Act (PPACA) goes into full force. Here’s what expats need to know.

Photo Credit: i2.cdn.turner

Original Article Text From The Yucatan Times:

Obamacare for Expats and how it affects you

Beginning January, 2014 – March, 2014, people who do not qualify as an official “expatriate” will need to purchase a state qualified domestic health care package.

Are You an Expatriate?

In the new IRS tax code, expatriates are treated as if they have health insurance regardless of whether they do or not. To be exempt from the insurance mandate, American expatriates must already be eligible for the IRS “Foreign Earned Income Exclusion”.

To qualify for the exclusion which allows expats to avoid paying U.S. taxes on their first $91,500, the expatriate must have a tax home in a foreign country, as well as be either a legitimate resident in that country, or spend at least 330 days a year outside the United States.

If you are considered an “expat” via your IRS filing, you do not need to worry about finding a qualified domestic carrier through an approved PPACA state Exchange or broker. What If I Don’t Quite Qualify as an Expatriate? If you need to have health insurance in the U.S. to avoid the tax penalty and out of necessity in Mexico or internationally, there is a way to have both.

Get Your International Coverage First

Whether you qualify as an expat or not, you want to have coverage internationally in Mexico as domestic health care plans will not cover you once you cross the border.

You should purchase a private, major medical, international policy to cover you in Mexico. When you purchase an international health care policy, you are purchasing it to protect yourself and your family, not to meet PPACA requirements.

International policies are surplus line insurance plans and do not meet the PPACA qualified carrier specifications. If you do not qualify as an expatriot, you can purchase a private, major medical, international policy that excludes coverage in the U.S. to reduce your premium in consideration of purchasing a domestic plan as well.

If you do qualify as an expatriot, you can purchase a “Worldwide” policy that offers major medical coverage in the U.S. and every other country you live, work or travel to and not worry that it meets the PPACA requirements.

Domestic Coverage
If you are a person that does not quite fall into the “expatriate” category, such as maybe an oil field worker or consultant, who works and lives abroad but only for half the year, then you are going to need to purchase a domestic health care policy that is PPACA approved through a state Exchange or an independent broker beginning in January 2014 – March 2014.

If you do not purchase a plan by the end of March 2014, you will have to wait until January 2015 and you will be subject to the imposed tax fine.

State run Exchanges have been created by the government to help individuals (self employed and unemployed) and small businesses purchase health insurance coverage.

Beginning January 2014, each state run Exchange will help individuals make valid comparisons between plans that are certified to have met benchmarks for quality and affordability.

There are different levels of coverage and cost (Bronze, Silver, Gold and Platinum), however, in order for a plan to qualify as an approved health care plan, there are minimum provider requirements.

Individuals are not required to purchase health insurance through the Exchange, though subsidies will only be available for plans sold through the Exchange.

If you would rather buy your insurance through an insurance agent or broker, you will be free to do so. If not, you will be able to purchase insurance in a matter of minutes on your state Exchange Web site.

U.S. citizens living outside the U.S.
U.S. citizens living in a foreign country are not required to get health insurance coverage under the Affordable Care Act.

If you’re uninsured and living abroad, you don’t have to pay the fee that other uninsured U.S. citizens may have to pay.

Generally, health insurance coverage in the Marketplace covers health care provided by doctors, hospitals, and medical services within the United States.

If you’re living abroad, it’s important to know this before you consider buying Marketplace Insurance.

Link to Original Article:

From The Yucatan Times

  • ABJB

    If you live abroad for a majority of the year, yet do not qualify as an expat using the credit, are you committing fraud by buying a policy back in your home state?
    Seems there are expat articles written that elude to this catch22 like scenario.

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