Legitimate Expats Excluded From Obamacare Health Insurance Mandate

[rsokolowski]

Obamacare is NOT going to be the most important issue in the US election. Also, it's a wash and many people like the benefits of it.

Anyway, people who may be moving back to US will find this interesting. The SUBSIDIES for middle class Americans needing to purchase insurance privately are VERY GENEROUS. Much better than the status quo. Hopefully, most poorer people can get on expanded Medicaid, but of course the republicans are trying to block that. People with insurance from employers still get insurance from employers. If a middle class person chooses not to insure (if no employer insurance) even with the very generous government subsidies, they can choose to pay the Obamacare "penalty/tax" instead which is much lower than paying for the insurance, but no insurance then. For Romneycare in Massachusetts, ironically Obamacare's opponent Romney is the father of the core principles of Obamacare, only ONE PERCENT of people there are actually in a position to be liable for the tax penalty. As good as single payer? Not a chance. Better than the status quo? Absolutely.

If you don't believe me about the generous subsidies for middle income people, punch some numbers in this form, and you will be amazed:

http://healthreform....calculator.aspx

According to that calculator, a 50 year old person who earns $50,000 per year would pay $6,978 in healthcare premiums and get $0 tax credit from the government. Sounds like a sweet deal.

For my salary the calculator estimates it will be over 20,000 USD per year for premiums for my family. I currently have a very good employer subsidized plan and the total cost is a little over half of that amount. My share is only about 14% or $2400 a year. $2200 or more than $20,000, only the US government would think that this is a good deal.

[3SoiDogNight]

As discussed a number of times already, bona fide expats are exempt from the USA insurance requirement and the penalty/tax for not having it. As such, your personal interest in the program would come into play IF you repatriate.

I don't post in these forums very often so what has been discussed in other topics is irrelevant since I'm asking in this thread. Who and how is a "bona fide expat" determined? Something tells me it's not as simple as hopping on an airplane and leaving.

[lanny]

As discussed a number of times already, bona fide expats are exempt from the USA insurance requirement and the penalty/tax for not having it. As such, your personal interest in the program would come into play IF you repatriate.

I don't post in these forums very often so what has been discussed in other topics is irrelevant since I'm asking in this thread. Who and how is a "bona fide expat" determined? Something tells me it's not as simple as hopping on an airplane and leaving.

The law says that "expats" are those taxpayers who meet either of the two tests for the Foreign Earned Income Exclusion. You don't have to take the exclusion, just be able to meet either of the tests. So, even retirees, who don't have excludable income, will be able to avoid the penalty. Since the penalty is an additional tax, there will probably be a form to attach to your annual income tax return.

[3SoiDogNight]

As discussed a number of times already, bona fide expats are exempt from the USA insurance requirement and the penalty/tax for not having it. As such, your personal interest in the program would come into play IF you repatriate.

I don't post in these forums very often so what has been discussed in other topics is irrelevant since I'm asking in this thread. Who and how is a "bona fide expat" determined? Something tells me it's not as simple as hopping on an airplane and leaving.

The law says that "expats" are those taxpayers who meet either of the two tests for the Foreign Earned Income Exclusion. You don't have to take the exclusion, just be able to meet either of the tests. So, even retirees, who don't have excludable income, will be able to avoid the penalty. Since the penalty is an additional tax, there will probably be a form to attach to your annual income tax return.

So let me get this straight. I now have to take a "test" to prove to the IRS that I don't live in the United States?

I haven't earned a US dollar in over 5 years. Although I'm still forced to file, my Thai income is below the $95,000 per year threshold. The term "tax return" hasn't been in my vocabulary in over a decade since I haven't received one in over 10 years. I find it suspect that the government only has two categories of expats despite the fact that there are many reasons people move abroad. Those running from something aren't filing taxes anyway and never will.

You stated that the "penalty" is an additional "tax" even though Obama said his Affordable Health Care Act wouldn't raise taxes on those earning under $250,000 per year. Sounds like Obama bin Lyin'.

[lanny]

I did not say there were two categories of expats, I said there are two tests (by which I was referring to two different rules) for qualifying for the exclusion - you can be either a bona fide resident of another country or you can be out of the US for at least 335 days in any 12 months. You don't now and never did have to take a "test" to claim the exclusion. Nor is your reason for being an expat relevant.

You also seem to be confusing a tax return (which is a document concerning your income, etc.) with a tax refund (which is a return of advance payment against your tax.)

Finally, it is not Obama who says the "penalty" is a "tax." In their ruling upholding the law itself, the courts have held that, despite what the statute may call it, the addition to tax is, in fact, a "tax."

[3SoiDogNight]

or you can be out of the US for at least 335 days in any 12 months.

Ok now I can sleep better tonight.

<i>Finally, it is not Obama who says the "penalty" is a "tax." In their ruling upholding the law itself, the courts have held that, despite what the statute may call it, the addition to tax is, in fact, a "tax." </i>

So Obama bin lyin'.
Regardless of what it's called, it's more money out of our wallet.

[3SoiDogNight]

.

[OMGImInPattaya]

Most of the posts in this thread are approaching the issue from the point of view of an expat who doesn't want to participate in Obamacare. But suppose that you're a legitimate expat in Thailand but have the option of moving back to to the States if you want. Suppose further that you have no health insurance in Thailand and then you are diagnosed with cancer some other condition for which ongoing treatment will be necessary. Under Obamacare, insurers cannot exclude you from buying a policy because of a pre-existing condition. Does does it follow that an expat could live in Thailand until they get sick, then move back to the States, purchase a policy, and immediately have coverage for their on-going treatment?

Yes, it's one of the many civilizing influences "Obamacare" has brought to the United States...that people who are actually sick can purchase medical insurance for treatment at affordable group rates, even as an individual.

[OMGImInPattaya]

As discussed a number of times already, bona fide expats are exempt from the USA insurance requirement and the penalty/tax for not having it. As such, your personal interest in the program would come into play IF you repatriate.

I don't post in these forums very often so what has been discussed in other topics is irrelevant since I'm asking in this thread. Who and how is a "bona fide expat" determined? Something tells me it's not as simple as hopping on an airplane and leaving.

The law says that "expats" are those taxpayers who meet either of the two tests for the Foreign Earned Income Exclusion. You don't have to take the exclusion, just be able to meet either of the tests. So, even retirees, who don't have excludable income, will be able to avoid the penalty. Since the penalty is an additional tax, there will probably be a form to attach to your annual income tax return.

The way I read the statutory and interpretive language is one has to meet both tests not one, i.e., "either" of them to avoid the tax penalty for not having insurance. Of course, this will have to be cleared up later by the IRS, because by definition, retired expatriates don't meet the foreign earned income exclusion.

[Thighlander]

You can go to www.ehealthinsurance.com and get a good short term policy for the States. I was paying about 3 usd per day. Those policies do not meet the requirements of BO Care, though.

[TallGuyJohninBKK]

I understand the discussion above about what it takes to be considered as a non-resident expat for tax and other purposes.

But I still think there's an important issue/question that's not been addressed or answered above.

Will possessing one of the various Thai or international-issued health insurance policies (like those issued by companies like BUPA, LMG, etc) satisfy the insurance coverage mandate of Obama-care -- let's say, hypothetically, if someone doesn't meet the non-resident expat test for a particular year.

For example, if someone is retired, they're probably not having earned income or a business in Thailand. And then let's say, a family member in the U.S. dies or becomes ill and you need to go back to the U.S. for a more extended period in a calendar year -- even though your home continues to be Thailand and you continue to have your Thai medical coverage.

What then under Obama-care??? in that example where I had to go back to the U.S. for more than a month, would I end up getting the tax penalty for that year for not having a suitable medical insurance policy? Or would having the Thai policy suffice to meet that obligation?

My Thai-issued policy, for example, includes worldwide coverage. But for any period when I'm staying in the U.S., it will only cover emergency treatment, not non-emergency stuff. And even then, the coverage limits in a Thai policy typically aren't going to cover much relative to the expenses of U.S. emergency medical care costs. But still, I have coverage, and if I needed some non-emergency care, I obviously could get it in Thailand or any other place of my choosing.

[taxout]

Your insurance policy has to qualify under Obamacare, and your Thai policy almost certainly will not.

There is, however, a "hardship" exemption from the tax penalty for not having insurance. Of course the application of this exemption isn't clear yet, but it seems reasonably possible that it should apply in the case you suggest. To get the hardship exemption, though, you'll have to file a form with the IRS and plead your case for it.

Note that Obamacare policies -- like current US healthcare policies -- are based on your state of residence, and if you don't have a US residence it's not clear how you'll get a policy in any event. This, of course, could boost your argument for the hardship exemption.

[TallGuyJohninBKK]

Your insurance policy has to qualify under Obamacare, and your Thai policy almost certainly will not.

Taxout, I guess what I was hoping for was:

1. some specific information on what the criteria is or will be for qualifying policies under Obama-care and/or

2. a link to some govt website where that kind of info might be elaborated.

[Sheryl]

I think 2 different problems/issues being confused here.

First is whether or not you are required under the ACA to have a qualified insurance policy. To me it is quite clear that people who are either bona fide residents of another country (which would be most of us) or meet the physical presence test of being out of the country for 330 out of 365 days, are not so required.

A totally other problem is what to do by way of coverage for periods of time that one is back in the US. Unless you are covered by Medicare or Tricare etc, I strongly advise taking out a travel insurance policy. That's what I do every year to cover me while back in the US visiting family.

[taxout]

The definition of a qualified health plan is at 42 U.S.C. §18021. A plan from Thailand is just not going to be included, but you can read it if you like:

http://www.law.cornell.edu/uscode/text/42/18021

I don't think it's safe to assume that qualifying as an expat under the rules is a slam-dunk. When you look closely at tax rules and closely at individual cases doubts in applying facts to law almost always start to pop up.

[TallGuyJohninBKK]

The definition of a qualified health plan is at 42 U.S.C. §18021. A plan from Thailand is just not going to be included, but you can read it if you like:

http://www.law.cornell.edu/uscode/text/42/18021

I don't think it's safe to assume that qualifying as an expat under the rules is a slam-dunk. When you look closely at tax rules and closely at individual cases doubts in applying facts to law almost always start to pop up.

Thanks Taxout for the post and the link.

I didn't expect that international or Thailand based policies would be acceptable under that law... But at least I wanted to see what kind of requirement was being set up...

© is offered by a health insurance issuer that—

(i) is licensed and in good standing to offer health insurance coverage in each State in which such issuer offers health insurance coverage under this title; [1]

(ii) agrees to offer at least one qualified health plan in the silver level and at least one plan in the gold level in each such Exchange;

(iii) agrees to charge the same premium rate for each qualified health plan of the issuer without regard to whether the plan is offered through an Exchange or whether the plan is offered directly from the issuer or through an agent; and

(iv) complies with the regulations developed by the Secretary under section 18031 (d) of this title and such other requirements as an applicable Exchange may establish.

Hard to imagine than any Thai or international plan is going to meet that language and the rest of the details in the link you posted.

[Thighlander]

I was told that my United Health Coverage with a 5000 deductible would NOT meet their requirements. The whole thing is screwy as can be. I think it will be delayed, watered down, and dismantled. Fox News was asking people about it randomly on the streets of DC. No one could explain it there, either, but there were plenty of BO Lovers.

[chubby]

+The fines start small and get bigger year by year, even if prorated, they will eventually amount to something.

+The issue will be starting/stopping plans, if it is like most plans, there will be a few months of 'open enrollment', per year where you can change plans, and possibly only during those periods also sign up.

+the 330 day deal, sounds likely, but all the other things, probably are going to be unknown, till the 'rules' are fully written, and people start reporting , what the it means in the real world, i would guess.

for the pre-65yo , however, what this means, is that there won't be any risk of medical bankruptcy, assuming one does end up back in the US, which was a major risk of early retirement, as any small preexisting condition, and you can't get insurance, at ANY price (even $6k/year ) sure would be nice, if they threw in some overseas coverage with it ...

[3SoiDogNight]

Real expats are excluded. We've been over this before here.

What's the difference between a "real" expat and a fake expat?

How is that determined?

[chubby]

http://www.mrmoneymustache.com/2013/10/28/obamacare-friend-of-the-entrepreneur-and-early-retiree/

[T_Dog]

I called the 1-800 number for the https://www.healthcare.gov/ to sign up today and got through to an agent almost immediately. Tried to see if I could sign up but was told that I needed a US residence as they can not do anything if they do not have a state to start with. I asked her if she was sure so she got her supervisor and she also stated that I have to have a US residence to be able to sign up for the Affordable Health Care system. If you live in Thailand and do not have an address in the USA, it sure looks to me that expats are exempt. My only concern is how well versed with the law the folks answering the telephone are.

[nithisa78]

Even in the USA there is lack of clarity on this matter. If all else fails, you maybe able to claim exemption from it on religious grounds. Without having to say one word more than that. It is valid answer for not wanting you or your children having any vacinations.