Do I need to have health care insurance as a US citizen when I'm away?

I support ObamaCare, but I don’t understand about the requirement that USA citizens must now have health insurance. I just got a new plan, and they don’t support any medical needs when I’m out of the country! So, if working abroad 6 months of year, how do I NOT pay insurance for those months and NOT get a tax penalty? FYI, I’ll be in a pretty high tax bracket in 2016.

Thanks!

I’d talk to an advisor, but you’d be better off all around by trying to qualify for the feie. You’ll not have to meet the health care requirement and you get the tax break.

Hey @ericvanbuskirk ,

I deal with this as well. The answer is

U.S. citizens living in a foreign country for at least 330 days of a 12-month period are not required to get health insurance coverage for that 12-month period. If you’re uninsured and living abroad under this definition, you qualify for a health insurance exemption. This means you don’t have to pay the fee that other uninsured people must pay.
Source: https://www.healthcare.gov/quick-guide/eligibility/

For your 6-month case, and my 7-month case, I’m 99% certain that means you need to register for ACA in whatever state you more or less arbitrarily choose to reside in during those months.

I have not spoken with a lawyer about this, primarily because the rule seem so similar to the Foreign Earned Income Exemption (feie). I’m assuming they used that tax rule as a model. Obviously, as @wanderingdev references, in order to qualify for either rule you will need to stay out for an additional 5 months. Much easier said than done.

On the opposite end of things, I believe you are allowed 90 contiguous days uninsured without being penalized per year. I can’t find that directly on an ACA website but here it is from another: http://obamacarefacts.com/questions/more-than-90-days-without-coverage-do-i-owe-the-fee/

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@Miquel and @wanderingdev Thanks for the feedback. I’ll admit I’m for Obama Care (although I don’t qualify because of salary). However, when you consider that at least some healthcare companies do NOT cover you when you’re abroad, this defeats the purpose of making Americans have health care. Sure, everyone should have it or be “punished.” But it’s similar to double taxation if a person works abroad 1/2 the year (something which none of us have to worry about). I can’t do more than 7 months work abroad and shouldn’t be pushed into staying out of the country. True, maybe I can drop it for three months. So, indeed I’ll have to speak w/ an attorney or accountant that knows about this

I agree with you. While double-taxation is a thing and the US is actually relatively friendly compared to other countries I have heard about, double healthcare does seem silly. The situation to me is reflective of a rule I’ve discovered in my own life: The broader scope of a policy, the more painful it is to be exceptional. So we just have to pick our times to be exceptional carefully.

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In addition to the above information already provided, here’s my take on the matter and what I do, for what it’s worth. Sounds like you might already know all of this, but for others’ edification…

  • The penalty in 2015 for not having an eligible insurance plan is 2% of your AGI or $325, whichever is greater. In 2016, that has gone up to 2.5% of your AGI or $695, whichever is greater. This is assessed on your tax return.
  • This year, I bought an international plan from Cigna that doesn’t meet all of the ACA requirements, but is much cheaper (and much better) than a qualifying plan in the US. It works just about anywhere in the world, including the US (for up to 90 days per calendar year).
  • At my income level, I will save money by buying the cheaper (and better) international insurance and paying the tax penalty compared to buying really crappy, expensive insurance in the US that won’t even work while I’m out of the country for months at a time.

There’s really no way around it and it’s not going to get any better. Seems to me that insurance companies in the US are having a field day this year with the way premiums went up.

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