After Friday’s Supreme Court announcement on the ACA – Obamacare, there are bundles of questions that now arise affecting US citizens who are outside the USA.
This article is for all the Americans traveling or living abroad who have, so far, avoided learning about the Affordable Care Act (ACA), affectionately known as “Obamacare” to those interested in Obama’s legacy.
Many readers now wonder what are the effects on US expats, now that the US Supreme Court has ruled that Obamacare is legal.
Are US citizens outside the US covered / protected by the ACA? . . .
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Full article at: ACA – Obamacare’s Effects on American Expats Living Abroad
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Feel free to copy while giving proper attribution: YucaLandia/Surviving Yucatan.
Dr. Steven M. Fry
Read on, MacDuff!
Surviving Yucatan 
My husband and I have a situation that appears to be different from most. We actually may WANT to pay for US insurance, at least for the year or two until we qualify for Medicare. We have lived overseas for years but are spending more and more time in the US to help care for our elderly mothers, about 3-4 months a year presently. We qualify as non-US residents under the ‘permanent residence’ clause. However, since we now live mainly on unearned income, with a little income from US-based sources, we do not file for the earned income exclusion, but do use our foreign address to file. And we file as non-residents for state taxes. Our health insurance company stopped serving long-term overseas residents a month ago and the only other insurance we can get doesn’t cover pre-existing conditions, which both of us just got a few months ago. So in order to be covered in the US for pre-existing conditions, we would like to apply under the affordable health care act. We will also keep our overseas insurance that doesn’t cover pre-existing conditions. We spend most of the time in the US in MI, where we receive business mail, but we are not MI residents. Can we apply in MI or under the Federal umbrella for US health insurance?
Hi maggie,
Michigan has roughly 140 plans available, at some of the lowest prices in the nation. Under AFA/Obamacare, they MUST offer coverage of preexisting conditions. Se http://www.detroitnews.com/article/20130925/BIZ/309250032/Michigan-health-exchange-has-plenty-choices?odyssey=tab|topnews|text|FRONTPAGE for more details. Check with the Michigan plan. If not, the insurance agencies (except a few unique “grandfathered plans”) are required to cover preexisting conditions as of Jan. 1, 2014.
steve
thanks much for that. I’m a little confused since at the healthcare.gov site, when I typed in Michigan as my state, it said I must apply at the national site. Anyway, they basically said we should just do the application and see!
I am in a strange situation here.. I have been living in Thailand now for 4 years and have a Thai wife who works for the Thai Government. Through her employment I have 100% free medical here. Although this does not cover me in the US, I really have no intentions to do more than a short vacation in the USA. I receive Disability from America so I have not had to pay taxes for the past 5 years. Even though i have been living abroad I have not changed my residency to this country. Do I need to get Obamacare? There are many others here in Thailand in the same situation as I am.
Hi Richard,
Can you meet the 330 day physical presence test for being outside of the USA for 330 days (next year)? If not, then read IRS Publication 54 to see if you are exempt as a “bona fide resident” of another country.
Specifically: IRS Publication 54 See: ~ Bona Fide Resident – (of a foreign country) ~ tests to see if you qualify as a “bona fide” resident of a foreign country. There are just way too many questions I would have to ask you to see if you qualify, so, please see the IRS publication 54 on this at: Pages 14-15 AND Page 34 of http://www.irs.gov/pub/irs-pdf/p54.pdf
Also: If your annual income is sufficiently low, and you are exempt from filing with the IRS due to low income, then you are exempt from ACA’s requirements.
steve
There is another way of becoming exempt from ACA’s requirements; which is a much more serious decision to make with multiple legal and personal implications. Renounce U.S. citizenship. It is not a matter to take lightly, but you can find a host of resources on http://tax-expatriation.com/ where I have compiled a number of key U.S. international tax, professional articles and IRS and U.S. State Department resources, Enjoy!
Patrick W. Martin
International Tax Partner
Procopio, Cory, Hargreaves & Savitch LLP
525 B Street, Suite 2200
San Diego, CA 92101
direct dial: (619) 515-3230
direct fax: (619) 744-5430
patrick.martin@procopio.com
http://www.procopio.com
Hi Patrick,
Fortunately, many US retirees in Mexico have Medicare or Medicaid, and are EXEMPT from ACA/Obamacare.
It makes sense that a tax accountant would advertise the services to renounce citizenship, because the US does not accept the renunciation until the IRS charges the applicant special taxes to sever their relationship with the USA – so a good accountant can be very helpful in completing the renunciation process. … like breaking up with a really bad girlfriend… (the USA does not just forgive, forget, and move on) … so the guidance of a good tax advisor can help move people through the process.
steve
Steve,
For most retirees, I agree, it would make no sense for them to renounce US citizenship, especially when they are relying upon Medicare. However, I am working with a number of folks these days. They fall into another category usually; which I call “Accidental Americans”. They were born in the U.S. and have spent most of their lives overseas in their “home” country. Probably the vast majority of your readers would never fit into this category?
In any event, there are some who would like to know and understand the consequences. It’s not always like breaking up with a “really bad girlfriend,” since often times no tax is ever due after complying with the rules. I explain how this works in my article entitled – Accidental Americans Rush to Renounce U.S. Citizenship to Avoid the Ugly U.S. Tax Web International Tax Journal,CCH Wolters Kluwer, Nov./Dec. 2012, Vol. 38 Issue 6, p45. There are some real number calculations reflected – to see how it works. Hopefully the US federal government is more like a “good girl friend” with a few bumps on the relationship! 😉
Saludos – Patrick
Patrick W. Martin International Tax Partner
[cid:539420516@30062013-0931] Procopio, Cory, Hargreaves & Savitch LLP 525 B Street, Suite 2200 San Diego, CA 92101 direct dial: (619) 515-3230 direct fax: (619) 744-5430 patrick.martin@procopio.com http://www.procopio.com
Antes de imprimir este mensaje, asegrese de que es realmente necesario. Gracias.
El Feb 3, 2014, a las 10:12 PM, “Surviving Yucatan” <comment-reply@wordpress.com> escribi:
yucalandia commented: “Hi Patrick, Fortunately, many US retirees in Mexico have Medicare or Medicaid, and are EXEMPT from ACA/Obamacare. It makes sense that a tax accountant would advertise the services to renounce citizenship, because the US does not accept the renunciation u”
Steve,
For most retirees, I agree, it would make no sense for them to renounce US citizenship, especially when they are relying upon Medicare. However, I am working with a number of folks these days. They fall into another category usually; which I call “Accidental Americans”. They were born in the U.S. and have spent most of their lives overseas in their “home” country. Probably the vast majority of your readers would never fit into this category?
In any event, there are some who would like to know and understand the consequences. It’s not always like breaking up with a “really bad girlfriend,” since often times no tax is ever due after complying with the rules. I explain how this works in my article entitled – Accidental Americans” – Rush to Renounce U.S. Citizenship to Avoid the Ugly U.S. Tax Web” International Tax Journal,CCH Wolters Kluwer, Nov./Dec. 2012, Vol. 38 Issue 6, p45. There are some real number calculations reflected – to see how it works.
Hopefully the US federal government is more like a “good girl friend” with a few bumps in the relationship! 😉
Saludos – Patrick