Obamacare and Expats

[DownLoLarry]

 

Affordable Care Act

U.S. citizens living abroad are generally subject to the same individual shared responsibility provision as U.S. citizens living in the United States. Starting in 2014, the individual shared responsibility provision calls for each individual to have minimum essential coverage (MEC) for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. However, U.S. citizens or residents living abroad for at least 330 days within a 12 month period are treated as having MEC during those 12 months and thus will not owe a shared responsibility payment for any of those 12 months. Also, U.S. citizens who qualify as a bona fide resident of a foreign country for an entire taxable year are treated as having MEC for that year.

All U.S. citizens are subject to the individual shared responsibility provision as are all permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes. Foreign nationals who live in the United States for a short enough period that they do not become resident aliens for federal income tax purposes are not subject to the individual shared responsibility payment even though they may have to file a U.S. income tax return. The IRS has more information available on when a foreign national becomes a resident alien for federal income tax purposes. Learn more here.

For general questions about the Act, see the dedicated ACA website operated by U.S. Department of Health and Human Services (HHS). The HHS website includes a link to information about whether U.S. citizens residing abroad are subject to ACA. The Health Insurance Marketplace, sometimes known as the Health Insurance Exchange, is a new way to find quality health coverage. To be eligible for health coverage through the Marketplace, you must live in the United States; must be a U.S. citizen or national (or be lawfully present) and can't be currently incarcerated.

For tax issues related to ACA, see the ACA page within the IRS website. The IRS site provides further links/webpages, depending on whether you are an individual, employer, or other organization. For more information, see the Question and Answer page for Individuals.

http://travel.state.gov/travel/living/living_1234.html

[xyzzy]

http://travel.state.gov/travel/living/living_1234.html

 

  I just, hopefully, finally got all signed up even though I started the process before I left home. I'm on a state exchange that has a good reputation unlike the national site. Still had all kinds of problems as the insurance company is apparently swamped. A mistake on their part that is going to cost me $400+.

 

  I can't even log straight into my state exchange web site as it seems to block users with an ISP from Thailand and Cambodia. Fortunately I was able to get in via a VPN.

[pdogg]

Some good info here if you are an American living abroad:

 

 

US Citizens Abroad and OBAMACARE

November 11, 2013

Commencing January 1, 2014, the “Affordable Care Act”, more derisively known as “OBAMACARE” will require that Americans carry so-called “minimum essential health coverage” (basically, health insurance) or suffer payment of a tax penalty.  The provision applies to any individual who is a US citizen or who qualifies as US “resident” for federal income tax purposes (e.g., a green card holder or one who meets the  so-called “substantial presence” test).  The rules apply to those individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have the required health coverage or if an exemption does not apply.

An important exemption exists for certain US persons who are living and working abroad if they meet certain requirements.  Those who qualify for this exemption need take no action to comply with the Obamacare provisions. The exemption exists because it would not be fair to force Americans living overseas to purchase a policy on one of the new US health insurance marketplaces because most US policies do not provide coverage for overseas medical care (other than emergency care).

Who Qualifies for This Exemption?

In order to qualify for the Obamacare exemption, the individual must qualify for the benefits of claiming the foreign earned income / foreign housing exclusions under Section 911 of the US Internal Revenue Code.  Generally, Americans working abroad who meet particular requirements are eligible to exclude from US taxable income certain amounts of foreign earned income (wages, compensation for services) and housing costs paid by their employers under rules governing the Foreign Earned Income Exclusion (FEIE), and Foreign Housing Exclusion (FHE).

For an individual to qualify for the FEIE and / or FHE, a “tax home” must be maintained in a foreign country and either the Bona Fide Foreign Resident (BFR) or Physical Presence Test (PPT) must be met.

Generally, a “tax home” is the location of the main place of business, irrespective of where a family home is maintained. If the nature of a person’s work means that there is no regular or main place of business, then the tax home may be the place where the person regularly lives. A person is not considered to have a tax home in a foreign country if the person’s household is maintained in the US. Temporary presence in the US (for example, for vacation or for employment), does not necessarily mean that the household is in the US during such time.

The BFR Test: To meet the BFR Test, a person must be a bona fide resident of a foreign country for an uninterrupted period which includes a full calendar year. A resident is one who, based on the facts and circumstances, has established a “tax home” and has in effect settled in that country.

The Physical Presence Test: To meet the PPT an individual must be physically present in a foreign country or countries for 330 days in any 12 consecutive months. The 330 days do not have to be consecutive, but they must be whole days present in a foreign country. Travel time does not count toward the requisite 330 days if the travel is in the US or its possessions for periods of 24 hours or more, or takes place over international waters. Recordkeeping is critical.  The PPT often helps an individual on short assignment. It also enables an individual to come back to the US for short periods (generally up to one month) in any consecutive 12-month period and still qualify for the exclusions.

Many people have asked if the individual must actually file returns and claim the FEIE and FHE in order to be exempt.  My view is that so long as the individual meets the “tax home” test and either the BFR or PPT test, he should be exempt from the health care coverage rules.  In other words,  I believe the individual must merely qualify for the benefits of claiming the foreign earned income / foreign housing exclusions under Section 911 – the law does not say he has to actually claim them to qualify for the exemption.  This would make sense since the exemption exists because it would not be fair to force Americans living overseas to purchase a US policy on one of US health insurance marketplaces since generally these policies do not provide coverage for overseas medical care.  The law was trying to provide relief for the US person who is truly residing abroad and uses the “tax home”, BFR and PPT concepts to implement the exemption.

Copied below is some of the supplementary information from the  final Treasury Regulations implementing the Obamacare provisions:

  
D. Foreign Issuer Coverage

1. In general, under section 5000A(f)(4) and § 1.5000A–1((2) of the final regulations, an individual is treated as having minimum essential coverage for a month if the individual is a bona fide resident of a United States possession for the month, or if the month occurs during any period described in section 911(d)(1)(A) or section 911(d)(1)( that is applicable to the individual. Section 911(d)(1)(A) is applicable to a citizen of the United States who has a tax home outside the United States and is a bona fide resident of a foreign country or countries during an uninterrupted period that includes an entire taxable year. Section 911(d)(1)( is applicable to a U.S. citizen or U.S. resident (as defined in section 7701() who has a tax home outside the United States and is present in a foreign country or countries for at least 330 full days during a period of 12 consecutive months.               

Overseas Assignment Ending?

Americans who are returning to the US in 2014 must be extra diligent to make sure they either (i) have the required coverage or (ii) will qualify for the Section 911 exclusion benefits. If they will no longer qualify for the Section 911 benefits, this could give rise to the Obamacare penalty provisions unless the individual already has qualifying health coverage, detailed below:

• Employer-sponsored coverage (including COBRA coverage and retiree coverage)
• Coverage purchased in the individual market, including a qualified health plan offered by the Health Insurance Marketplace (also known as an Affordable Insurance Exchange)
• Medicare Part A coverage and Medicare Advantage plans
• Most Medicaid coverage
• Children’s Health Insurance Program (CHIP) coverage
• Certain types of veterans health coverage administered by the Veterans Administration
• TRICARE
• Coverage provided to Peace Corps volunteers
• Coverage under the Nonappropriated Fund Health Benefit Program
• Refugee Medical Assistance supported by the Administration for Children and Families
• Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014 (for later plan or policy years, sponsors of these programs may apply to HHS to be recognized as minimum essential coverage)
• State high risk pools for plan or policy years that begin on or before Dec. 31, 2014 (for later plan or policy years, sponsors of these program may apply to HHS to be recognized as minimum essential coverage)

Minimum essential coverage does not include coverage providing only limited benefits, such as coverage only for vision care or dental care, and Medicaid covering only certain benefits such as family planning, workers’ compensation, or disability policies.

Fortunately, gaps in insurance coverage that are less than three-months long will generally not result in a penalty. This grace period to obtain new coverage may be helpful to the US person who has been employed overseas but is returning to the US to find a new employer. In addition, provided you have the required insurance for at least one day per month, you will have satisfied the law’s requirements for that month.

Penalty Provisions

If an individual otherwise required to be insured is not insured by the end of April 2014, he will be assessed a penalty at the higher of: $95 per adult and $47.50 per child, or 1% of household income. Household income will be computed by the Internal Revenue Service, basically, as any income in excess of the taxpayer’s tax filing threshold (which depends on tax filing status and age, for example, single or head of household http://www.irs.gov/pub/irs-pdf/i1040.pdf see Chart A on page 7).  The penalties increase annually. In 2015, they rise to $325 per person ($162.50 per child) or 2% of household income; in 2016, they rise to $695 per person ($347.50 per child) or 2.5% of household income. Commencing in 2017, the increase is indexed to inflation. Regardless of one’s total income, the penalty is capped at the approximate cost of a basic policy available on one of the new health-insurance exchanges.

http://blogs.angloinfo.com/us-tax/2013/11/11/us-citizens-abroad-and-obamacare/

[ArchieBunker]

So what if you dont enroll then the IRS are going to find you and penalize, oooooops I mean tax, you??  Whata  fucking joke.  Just ignore all the e mails.  If you ever return home or they bust your balls from DC, just tell them your hard drive crashed and you arent responsible.  It works for some.......

[ArchieBunker]

BTW the term "Obamacare" isnt derisive as The President was proud to have it called that.  He said so I one of the presidential debates.

[JaiDee]

So what if you dont enroll then the IRS are going to find you and penalize, oooooops I mean tax, you??  Whata  fucking joke.  Just ignore all the e mails.

 

 Problem is, if you keep current with your taxes and are expecting a return they will deduct whatever you owe, I guess it's 1% of your gross annual income? If you are not owed a refund they will just keep taxing you until you pay up;  you know Archie, like Jerry says; "they are like the mafia, they can take whatever they want!"

 

      A mistake made by someone close to me in 2011 pretty much voided my whole tax return for that year, and they have been telling me for 3 years now that I owe them 2800 balloons. Because I know they are wrong and my returns were done 100% correctly  I ignored the letters for the first year, and for the past 2 have had my accountant trying to straighten it all out, but all they do is penalize me more and more and act like they don't read my missives. Those fuckers are relentless.

[Torurot]

Hey your only a little guy. If you were a big corporate, not only would you have "double Irish/Dutch sandwiches" all over the place you would actually be getting massive tax refunds/corporate welfare....