“ACA Compliance” A Concern for the International Expat…

Affordable Care Act Compliance Now Required

As we approach the first of the year and the final implementation of the Affordable Care Act , people are scrambling to better understand what they are required to do.  The recent policy cancellations are finally hitting home and people are worried.  So much information is coming in through the media and other information outlets that people simply are not able to get their heads around this whole thing.

It is clear that if you are an American citizen you will be required to purchase an Affordable Care Act compliant health plan or face financial penalties to be carried out by the IRS.  But what about the U.S. Expat living outside the boarders of the United States?  How does this law affect them?  What if any requirements must they meet in order to avoid financial penalties for not complying with the new law?  I hope this post helps those of you who are Expats better understand what options you may have.

If you are living abroad permanently and you do not spend much time here in the U.S. then you may have nothing to be concerned about.  The current threshold as I understand it is 35 days.  35 days is the amount of time a U.S. Citizen can visit the U.S. within a 12 month period and not be subject to the penalty for not having an ACA Compliant health plan.  If you spend more than 35 days per year in the U.S. then you have a problem.

35 days is the threshold that separates penalty from no penalty.  So for those of you who may live abroad for 6 months or longer but spend a significant amount of time here in the U.S. you will have to either acquire a ACA qualified health insurance plan, adjust your visits to be less than the 35 day threshold or pay the penalty when you do your taxes at the end of the year.

Currently there are NO Individual International health plans that are considered to be ACA Compliant with the exception of some International Group plans such as the GeoBlue Group products.  But if you are responsible for your own coverage then you currently have no International Option that meets the ACA benchmark.  Although companies like GeoBlue have applied to HHS (Health and Human Services) for consideration of their plans to be qualified as ACA Compliant – this has not happened yet and it may take some time in light of all the launch problems the government has been experiencing with HealthCare.gov.

What To Do?

There are a couple of options to consider when living abroad and still meet the ACA Compliance required by U.S. Citizens.  One option to consider is to purchase an ACA Compliant health plan and along with it apply for an International Expat health plan that excludes coverage while in the United States.  This will cut your International premiums in almost half.  So what you end up with is a U.S. Health plan that covers you while you are in the United States.  When you leave the U.S. your International plan covers you overseas.

The second option is to apply for an Expat policy that covers you 24/7 worldwide including the United States.  This gives you complete coverage no matter where you seek care.  If your visits to the United States falls below the 35 days per year in the U.S. you should be fine and not subject to the ACA penalty.

The third option is to again apply for a complete worldwide Expat policy and if you are in the U.S. more than 35 days per year you simply pay the IRS penalty.  If you are employed in the U.S. and your employment requires you to travel back and forth to the U.S. you might consider negotiating the cost of the penalty in your employment contract.  You still have to pay the appropriate penalties but if your employer requires you to be in the U.S. for business purposes that exceed the 35 day requirement your employer in effect picks up the cost of the penalty.

The last option is to apply for a small group policy that is ACA Compliant.  But you must have at least two full-time employees to qualify for the group coverage.  For many small contractors this may be an option and a good one at that.  A group plan eliminates the need for a U.S. based plan and your can travel back and forth as needed.

GeoBlue for U.S. Citizens are the Go To Guys

GeoBlue_logo2GeoBlue offers simply the most comprehensive International plans for U.S. Expats and foreign nationals employed by a U.S. based company.  GeoBlue offers Expat policies that cover you just while you are outside the borders of the U.S. and they offer Expat policies that cover you 24/7 worldwide including the U.S.  The hope is that as some point in the future GeoBlue will be successful in obtaining the proper blessing from HHS eliminating this whole problem but until they do you have to choose the best option for your family as it exist today.

GeoBlue_Xplorer_Brochure_lgCheck out the Xplorer plans currently available from GeoBlue by clicking on the blue button below and see what option may best suit your needs.  If you click on the brochure image to the right you can view the Xplorer Brochure at your convenience.  If you have questions call us as we are here to help.  GeoBlue is the only U.S. based carrier offering complete Expat coverage where their plans are administered based on U.S. laws.  They take a first position for claims should the need for care arise.  Their 24/7 concierge type assistance is second to none – worldwide.

Call us at (619) 435-6700 and let us see if we can help you make the right choice based on your current needs.  We can also email you quotes based on your circumstances or you can apply directly online from the quote link below.  U.S. Citizens have never had a better choice for Expat coverage til now.


8 thoughts on ““ACA Compliance” A Concern for the International Expat…

  1. Mr. Jennings, I am a 45-year-old, self-employed artist. Currently, I spend nine months out of the year studying at an art school in Italy but come back home summers. Are you suggesting that there will be no ACA-compliant, U.S.-based health plans that will cover me while I’m overseas? My current plan (Blue Cross) is set to be cancelled by the end of 2014, but my insurer hasn’t told me what my options will be for 2015 and beyond.

    1. Hi Richard… Basically as I understand it if you are in the United States for more the 35 days a year and until there is an individual International medical plan that is considered ACA Compliant you will be required to have a U.S. ACA Compliant plan. Now you can apply for an International plan that does not include coverage in the U.S. which would reduce your International premiums by quite a bit but then you need a U.S. plan to cover you while in the U.S.

      In addition many of the ACA Compliant plans no longer provide coverage outside their new networks. So you will have to decide how to deal with it. Right now there is no single answer to the expat who lives part-time in the U.S. as far as I aware of other than two different products. I hope this is helpful.

      1. Thank you, Mr. Jennings. I appreciate your input. So there will be no ACA-compliant plans that provide coverage outside the United States, not even in the case of emergencies? If that is true, then it would make more sense for me to pay the “health tax” for the three months or so I’m in the U.S. and sign up for government coverage in Italy. After all, if I get sick while in the U.S., I can always sign up for insurance after the fact because they can no longer turn you down for pre-exisiting conditions. Right?

        1. Hi Richard – sorry for the delay – I simply missed your question. The only time you can enroll in an ACA Compliant plan is during Open Enrollment and qualifying events. This prevents people from doing exactly as you suggest. Get sick and then sign up when needed. If you get sick or injured you cannot enroll in a ACA plan until the next enrollment period.

  2. Jed

    Hi Timothy. Thanks for putting this article together. My situation is that I’ll be in the U.S. covered by my employer’s healthcare through June. I was then going quit the job and move abroad for one year. My plan was to pick up an international medical plan starting in July. I’m trying to determine if I can avoid paying into a US plan/penalty. This (older) link suggests that ACA compliant international plans are exempt from meeting all the requirements until 2016. That is how I read this bit:

    “…the Departments have determined that, for plans with plan years ending on or before December 31, 2015, with respect to expatriate health plans, the Departments will consider the requirements of subtitles A and C of Title I of the Affordable Care Act satisfied if the plan and issuer comply with the pre-Affordable Care Act version of Title XXVII of the Public Health Service Act.”

    My next question is: which providers offer expat health plans that comply with pre-ACA version of Title XXVII of the PHSA?

    1. Hi Jed – Recently I requested information on this from GeoBlue and they pulled the information together related to the Foreign Earned Income Credit. This exclusion for the ACA tax penalty applies to US citizens as well as resident aliens (foreign nationals working in the United States). The exclusion is reliant on a number of factors below. The information included in the attached document was taken from the IRS site. It is unlikely that a foreign national lawfully present here will qualify by virtue of where they are residing. Note, foreign nationals here on a J1, F1, or M1 visa are exempted from the ACA tax penalty (education or vocation visa).

      SUMMARY: To claim the FEIE—
      a. you must have foreign earned income as a US citizen or resident alien,

      b. your tax home must be in a foreign country,

      c. and you must be either:

      1. a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year

      2. physically present in a foreign country for at least 330 full days during any period of 12 consecutive months

      I will follow up with them on your questions but as I understand it right now this is how it stands. How the IRS will address this issue for this year I am not sure but will ask. GeoBlue is seeking ACA compliance for the Expat product the Xplorer from HHS and if they get it we will make sure we post it. For now there are no individual International Expat products that are considered ACA Compliant as of today that I know of. I hope this is helpful.

  3. I would suggest if you are going to be travelling in and out of the USA, where by you over stay the 35 day threshold, would be to enquire into an International Healthcare plan which would suit your needs best. Especially if you are travelling to different countries often enough for work purposes.

    1. Thanks for the post – as of today there simply are no Individual International Plans that are considered ACA Compliant. At least that I am aware of. Hopes are the GeoBlue will get the nod for their Xplorer plan this year from HHS and eliminate this concern for the U.S. Expat.

Leave a Reply