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ACA Requirements for US Citizens Living Abroad

ACA Requirements for US Citizens Living Abroad

PPACA

Patient Protection and Affordable Care Act (PPACA), also called Affordable Care Act (ACA) or Obamacare, requires most U.S. citizens, permanent residents, and certain other U.S. residents to purchase and maintain a compliant insurance plan that meets the Minimum Essential Coverage (MEC).

Exemption

If a U.S. citizen spends at least 330 full days outside the U.S. during a given calendar year, they are exempt from maintaining ACA compliant health insurance.

Short term insurance plans, travel insurance plans or even expatriate health insurance plans are not ACA compliant; therefore, they do not count towards maintaining Minimum Essential Coverage.

Options

The situation can be frustrating to U.S. citizens that live abroad for more than 3 months but less than 330 days. Before 2019, some U.S. citizens abroad were required to have Obamacare compliant medical insurance, which is most likely not going to cover them abroad or even provide a limited coverage; if they didn't have coverage, they would be penalized at tax time. The good news for U.S. citizens residing abroad is that as of January 2019, the federal tax penalty is no longer applicable to U.S citizens and residents, including U.S. citizens living abroad. However, for U.S. citizens and residents of some states, a state tax penalty may apply –– if a U.S. citizen living abroad is considered a resident of such a state, they should be sure to consider the costs of maintaining ACA compliant insurance or paying the state tax penalty.

Of course, while any expatriate is abroad, they should be covered under expatriate health insurance.

When an expat is visiting the USA temporarily, they can purchase short term travel insurance. If already covered under expatriate health insurance with worldwide health coverage, it isn't necessary to purchase any travel insurance.

If they are going to be moving back to the U.S. permanently, they can try to enroll into Obamacare using a special enrollment period. If that does not work out, then purchase domestic short term medical insurance until they are eligible to enroll into ACA compliant medical plan.

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