- Are U.S. citizens living outside the U.S. affected by the ACA?
During the 2018 plan year, 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 plans are NOT qualifying health coverage or MINIMUM ESSENTIAL COVERAGE (MEC) that satisfies the health coverage requirement of the affordable care act. In 2018, if you didn't have minimum essential coverage, you may owe an additional payment with your taxes. Starting with the 2019 plan year (for which you'll file taxes in April 2020), the federal penalty if you do not have a qualifying MEC plan no longer applies. If you don't have coverage during 2019 or later, you don't need an exemption to avoid the penalty. This is a change to federal law, not individual state laws.
- Are non-U.S. citizens living inside the U.S. affected by the ACA?
2018 ACA rules apply if you are a permanent legal resident (green card holder) or a resident alien as defined by the IRS. Starting with the 2019 plan year, the federal penalty if you do not have a qualifying MEC plan no longer applies.
- 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. In 2018, U.S. citizens working and living outside the States for 330 days or more in a 12-month period are not required to maintain MEC. 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. Starting with the 2019 plan year, the federal penalty if you do not have a qualifying MEC plan no longer applies.
- 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?
Generally, you are a resident alien after six months of presence in the U.S. The IRS states that you are a non-resident alien unless you meet either the green card test or the substantial presence test.
For more help in determining Alien Tax Status, please visit: https://www.irs.gov/Individuals/International-Taxpayers/Determining-Alien-Tax-Status.
- What ACA rules apply?
If you are subject to ACA rules during 2018, you are expected to meet the Individual Mandate for every 12-month period, or you will be subject to tax penalties when you file your Federal tax return. Starting with the 2019 plan year, the federal penalty if you do not have a qualifying MEC plan no longer applies.
The EHCCA- Expatriate Health Coverage Clarification Act of 2014 generally provides that most ACA provisions do not apply to expatriate health plans covering individuals traveling to or from the United States.
- 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 HTH coverage without penalty?
In 2018, 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 12-month period. 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. Starting with the 2019 plan year, the federal penalty if you do not have a qualifying MEC plan no longer applies.
- How is the shared responsibility payment calculated?
The penalty in 2018 is calculated in one of 2 ways. You'll pay whichever of these amounts is higher:
Under the ACA in 2018 , taxpayers and their dependents who are without minimum essential coverage for one or more months in a taxable year may owe an individual shared responsibility payment when filing federal income tax returns, unless an exemption applies. The IRS individual penalty amount is capped at the cost of the national average premium for a bronze level plan available through the Marketplace. For 2018, the penalty translates to the greater of $695 per adult, $347.50 per child, with a family maximum of $2,085 or 2.5% of household income above the filing threshold. The average 2018 for a Bronze level plan: $283 monthly or $3,396 annually.
(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%)
Note: Starting with the 2019 plan year, the federal penalty if you do not have a qualifying MEC plan no longer applies.
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.