Author Topic: Confused Expat on ACA / Obamacare Requirements  (Read 317 times)

zombiehunter

  • 5 O'Clock Shadow
  • *
  • Posts: 87
Confused Expat on ACA / Obamacare Requirements
« on: May 05, 2021, 01:33:05 PM »
Hi MMMers, I am departing the US on May 31 on what I expect to be a permanent basis, and having a tough time understanding the requirements that are applicable for foreign earned income and health insurance requirements (generally in the health insurance context since I don't expect to earn any foreign income at this time).  Based on my googling and research:

A US citizen or greencard holder that files taxes in the US has an exemption to the healthcare mandate if:
  • S/he lives outside of the US for at least 330 days during any 12-month period.
  • S/he remains outside the US as a bonafide resident of another country or countries for an entire taxable year.

I will have qualifying health insurance in the US from January through end of May, but because I will depart on May 31, 2021, there are only 215 days left until Dec 31 - which seems to make it impossible to satisfy the first exemption for 2021 tax purposes.  By the time April 15, 2022 comes around, only 320 days will have passed (assuming I don't return for any time at all in the interim).  How does one satisfy this requirement for the first year abroad ?  .

The following IRS publication has a lot of examples relating to the above requirements, generally in the foreign income context, although the rules appear to be the same for purposes of healthcare requirements:  https://www.irs.gov/pub/irs-pdf/p54.pdf


 
« Last Edit: May 05, 2021, 01:39:05 PM by zombiehunter »

secondcor521

  • Magnum Stache
  • ******
  • Posts: 3847
  • Age: 52
  • Location: Boise, Idaho
  • Big cattle, no hat.
    • Age of Eon - Overwatch player videos
Re: Confused Expat on ACA / Obamacare Requirements
« Reply #1 on: May 05, 2021, 01:35:49 PM »
Currently the penalty for violating the mandate is $0, so there is in effect no mandate to have HI for anyone in the US at the moment.  This could change but is probably unlikely to for the next couple of years.

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 6006
  • Age: 36
  • Location: Seattle, WA
    • My blog
Re: Confused Expat on ACA / Obamacare Requirements
« Reply #2 on: May 05, 2021, 05:52:14 PM »
Furthermore given the wording of "12-month period" instead of "calendar year" I'd guess you could satisfy the first exemption if you spend at least 330 days abroad in the 12-month period between June 2021 and May 2022. Then starting in 2022 as long as you're a "bona fide resident" of another country for the entire calendar year you could potentially be outside of the US for less than 330 days in that calendar year and still be exempt.

zombiehunter

  • 5 O'Clock Shadow
  • *
  • Posts: 87
Re: Confused Expat on ACA / Obamacare Requirements
« Reply #3 on: May 05, 2021, 08:37:06 PM »
Thanks both - that's very helpful! 

Catbert

  • Handlebar Stache
  • *****
  • Posts: 2080
  • Location: Southern California
Re: Confused Expat on ACA / Obamacare Requirements
« Reply #4 on: May 06, 2021, 11:24:59 AM »
For this and related issues you might go poke around www.gocurrycracker.com

He's a FIRE expat who has written about taxes, including FEI, and health insurance on more than one occasion.