Affordable Care Act (ACA) FAQs

  • Are U.S. citizens living outside the U.S. affected by the ACA?
    • U.S. citizens living abroad for an entire year or at least 330 days per calendar year, are exempt from the ACA rules. If you are covered by an appropriate expatriate group plan purchased in the U.S. by your employer, you meet ACA requirements. If you do not fall into either of these categories, certain rules may apply (see below). Our plan IS NOT QUALIFYING HEALTH COVERAGE ("MINIMUM ESSENTIAL COVERAGE") THAT SATISFIES THE HEALTH COVERAGE REQUIREMENT OF THE AFFORDABLE CARE ACT. IF YOU DON'T HAVE MINIMUM ESSENTIAL COVERAGE, YOU MAY OWE AN ADDITIONAL PAYMENT.

  • Are non-U.S. citizens living inside the U.S. affected by the ACA?
    • ACA rules apply if you are a permanent legal resident (green card holder) or a resident alien as defined by the IRS.

  • Does travel outside the U.S. affect a U.S. resident's obligations under the ACA?
    • No. Short-term travel outside the U.S. has no bearing on a U.S. resident's obligations under the ACA.

  • Is retaining an ACA compliant domestic health plan while traveling internationally a viable alternative?
    • In an effort to avoid the penalty, some expats have gone abroad with a domestic health plan that harshly restricts overseas coverage. This has resulted in increased financial burden and unexpected out-of-pocket expenses because of significant benefit gaps. Additionally, expats choosing this path are forced to deal with the inconvenience of managing issues with an insurer thousands of miles away: in a different time zone, with no understanding of the local health care or the relationships necessary to secure trusted care.

      The expense of the shared responsibility payment can be considered minimal when you consider the alternative of finding yourself injured or ill overseas, and uninsured.

      Coverage and network problems aside, most individual health insurance policies explicitly require that you meet the ongoing eligibility criteria for the policy. Eligibility hinges upon being a resident or living in the plan service area. Definitions can vary but if you no longer reside, live or work in the service area your coverage typically terminates after 60 days or based on the last billing cycle in which your eligibility changed.

  • Are non-U.S. citizens traveling inside the U.S. affected by the ACA?
    • No. Unless you are a permanent legal resident or a resident alien, you are typically exempt from ACA requirements.

  • Am I a resident or non-resident alien?
  • What ACA rules apply?
    • If you are subject to ACA rules, you are expected to meet the Individual Mandate each calendar year, or you will be subject to tax penalties when you file your Federal tax return.

      To find out if you are eligible for a coverage exemption or if you are required to make an individual shared responsibility payment, click here.

  • Do plans that meet the Individual Mandate function well outside the U.S.?
    • At this time, there are no individual expatriate plans sold to Americans that meet the definition of Minimum Essential Coverage (MEC) and thus meet the individual mandate. Plans available today on https://www.healthcare.gov, online exchanges operated by certain states, as well as websites operated by health insurers and health insurance brokers are not designed for accessing care outside the U.S. and thus may expose the policy holder to significant financial risk. Click here to see examples of how patients outside the U.S. directly bear substantial costs for medical emergencies, preventive care or routine illnesses when they purchase a plan that meets the Individual Mandate.

  • Can I keep my current GeoBlue coverage without penalty?
    • There is no tax penalty for purchasing this policy if you are outside the U.S. for the entire year or 330 days in a calendar year. In this instance, you are deemed to have met the individual mandate. Additionally there is no tax penalty applicable to J1, F1, M1 visa holders and other populations that meet one of the exemption categories related to the ACA individual mandate.

  • How is the shared responsibility payment calculated?
    • The penalty in 2016 is calculated in one of 2 ways. You'll pay whichever of these amounts is higher:

      - 2.5% of your yearly income above the filing threshold ($10,150 for individuals, $20,300 for couples filing jointly in 2014, the most recent year available). Or 2.5% of taxable income. The share responsibility payment is capped based on the national average premium for bronze level insurance plans for single individuals and the number of people in the insurance unit. Specifically, the cap equals that average premium times the number of people up to a maximum of five.

      The average bronze plan premiums for 2015 and the projected premium for 2016 are:

          2015:  $2,484 annual/ $207 a month per individual
          2016:  $2,676 annual/ $223 a month per individual

      (See filing thresholds in financial examples below) - $695 per person for the year ($347.50 per child under 18). The maximum penalty per family using this method is $2,085.

      Financial Example Individual Income: $50,000 Taxable income = $39,850 (individual income ($50,000) - taxable threshold for individual ($10,150)) Shared responsibility payment = $996.25 annually, $83.02 monthly (taxable income X 2.5%)

      Financial Example Family Income: $100,000 Taxable income = $80,000 (individual income ($100,000) - taxable threshold for couple/family ($20,000)) Shared responsibility payment = $2,000 annually, $166.67 monthly (taxable income X 2.5%)

The information above is provided for general instructional purposes only and is not intended to be legal guidance, opinion, or serve as a substitute for advice from licensed, legal and/or tax professionals; the law and tax regulations change frequently and may vary depending on jurisdiction. All risk of loss or damage based upon this information is solely that of the User, and Company (WIS) disclaims any and all liability thereof.