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Obamacare and the effects on US expatriates living abroad

By Robert Tillotson –

Many US expatriates in Latin America have been asking our office about the new health care mandate back in the United States, the Affordable Care Act or ‘Obamacare,’ and how it will affect their lives abroad. Here is the main question that has been asked:

I am a US citizen residing outside of the US on a worldwide health insurance plan or no plan at all. Does the individual mandate apply to me?

US citizens who live abroad for a calendar year (or at least 330 days within a 12 month period) are treated as having ‘minimum essential coverage’ for the year (or period) and, therefore, are not required to purchase ACA (Affordable Care Act) coverage. These are individuals who qualify for an exclusion from income under section 911 of the IRS Code. See the IRS foreign earned income exclusion test for further information on this exclusion. They need take no further action to comply with the individual mandate. Please note that expatriate medical insurance does not meet the definition of ‘minimum essential coverage’ under the ACA. Expatriate health insurance is not intended to provide US citizens residing in the US with health insurance. While your expatriate plan for worldwide coverage will not be affected by the ACA, you should review the information below to see if you are exempt from the requirements of the ACA or not, and whether you will have to pay a tax penalty or not.

Under the ACA, all US citizens, nationals and resident aliens will be required to purchase minimum essential coverage (ACA compliant coverage), unless they are exempt. Exempt US citizens include US citizens who reside outside of the US. The exemption applies to; a US citizen who has a tax home (your main place of work or employment, or if you do not have a main place of work or employment, your main residence) in a foreign country, and has been a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire taxable year; or is present in a foreign country or countries during at least 330 full days in a twelve-month period.

Even if a person was required to purchase minimum essential coverage and did not, she/he would only be required to pay a tax penalty for not purchasing ACA coverage (if she/he files a US tax return). In many cases, this tax is far less than the premiums that a person would pay when obtaining ACA coverage.

If you have any questions regarding the new Health Care Act or information or expatriate medical coverage, please contact Robert at

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