Are American Expats Covered Under the Affordable Care Act?
Many expats are covered under a U.S.-based expatriate health plan, but it’s important to note that the provisions of the Affordable Care Act do not apply to these plans. In essence, the government has decided that for now it is too difficult for these plans to comply with the new law due to a number of practical concerns.
Defining and enforcing preventative care, for example, provides too many challenges overseas. The government is still evaluating how expatriate plans might possibly comply with the law in the future. Simply communicating with enrollees who live abroad is a logistical problem, so for now, expats are exempt from compliance consequences of the law. Until the law can be changed to cover them, expats have been granted an exemption at least until December 31, 2015.
In order to qualify for the exemption, you must prove residency in another country through one of two tests:
- The Bona Fide Residence Test: To qualify through this test you must have been living abroad for at least one year and have no immediate plans to return to the U.S.
- The Physical Presence Test: Most expats will qualify for this test, as you simply need to have foreign earned income and be physically out of the U.S. for 330 days out of a 365 day period.
How to ensure your plan complies
Once you qualify for foreign residency, you are said to have the “minimum essential coverage” that is required. Even if you have coverage, it’s important to understand what type of expatriate health plan you have. If you want to ensure that you are complying with the Affordable Care Act down the road, make sure you have an insured group health plan. These limit enrollment to primary insureds (and covered dependents) who reside outside of their home country for at least six months of the plan year.
How to protect yourself if not exempt
The good news is that if your plan satisfies this condition, then you have fulfilled the minimum requirements of the Affordable Care Act. However, this also means your expat health plan won’t offer any of the additional benefits provided by law such as free wellness/preventive care, coverage for children up to age 26, guaranteed maternity coverage, and no lifetime maximums. If you don’t qualify for the exemption, and you are not considered a resident of the foreign country you are living in, you may want to consider travel medical insurance for USA residents. Call (800) 647-4589 or 01 (480) 821-9052 to learn more.