Obamacare Tax Penalty when insured through a foreign insurer
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Obamacare Tax Penalty when insured through a foreign insurer
I have excellent health insurance through a foreign insurer that fully covers me in the US.
Will I have to pay the tax penalty or is there some way around it?
Will I have to pay the tax penalty or is there some way around it?
Re: Obamacare Tax Penalty when insured through a foreign insurer
I believe that your foreign insurance must meet the minimum essential coverage guidelines. You can call the healthcare.gov people and see if they can tell you if your insurance qualifies.
As to getting around it, will you be out of the US for more than 330 days? If so you can apply for a waiver. Do you have some sort of reason why this is being done? Depending on the reason, there are various hardship waivers you could use.
As to getting around it, will you be out of the US for more than 330 days? If so you can apply for a waiver. Do you have some sort of reason why this is being done? Depending on the reason, there are various hardship waivers you could use.
Disclaimer: I am not a financial or legal expert and all information I provide is given for entertainment purposes only, at your own risk and with no guarantees of accuracy.
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Re: Obamacare Tax Penalty when insured through a foreign insurer
Oh this is excellence news, thanks! I will look into that. How does this look like at tax return time? Can I just assume that my plan qualifies and check a box or do the healthcare.gov people have to approve it beforehand? If yes, there there a specific letter, tax form, or certificate they have to issue?kirent wrote:I believe that your foreign insurance must meet the minimum essential coverage guidelines. You can call the healthcare.gov people and see if they can tell you if your insurance qualifies.
No.kirent wrote:As to getting around it, will you be out of the US for more than 330 days?
Because it is cheaper and better than the Obamacare plans.kirent wrote:Do you have some sort of reason why this is being done?
Re: Obamacare Tax Penalty when insured through a foreign insurer
Ask your foreign insurer if its policy provides minimum essential coverage. Otherwise, you will have to pay a penalty.
"Response: We agree that the health care benefits provided by foreign governments or through foreign insurance for legally admitted non-citizens of the United States vary from country to country and may create a barrier to care if health care providers in the United States do not accept payment from such coverage. Therefore, foreign health coverage is not designated as minimum essential coverage in this final rule. However, sponsors of foreign health coverage may apply for their coverage to be recognized as minimum essential coverage in the process outlined in § 156.604 of this final rules."
https://www.federalregister.gov/documen ... tions#h-42
"Response: We agree that the health care benefits provided by foreign governments or through foreign insurance for legally admitted non-citizens of the United States vary from country to country and may create a barrier to care if health care providers in the United States do not accept payment from such coverage. Therefore, foreign health coverage is not designated as minimum essential coverage in this final rule. However, sponsors of foreign health coverage may apply for their coverage to be recognized as minimum essential coverage in the process outlined in § 156.604 of this final rules."
https://www.federalregister.gov/documen ... tions#h-42
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Re: Obamacare Tax Penalty when insured through a foreign insurer
HueyLD, this is very helpful, thanks!HueyLD wrote:Ask your foreign insurer if its policy provides minimum essential coverage. Otherwise, you will have to pay a penalty.
"Response: We agree that the health care benefits provided by foreign governments or through foreign insurance for legally admitted non-citizens of the United States vary from country to country and may create a barrier to care if health care providers in the United States do not accept payment from such coverage. Therefore, foreign health coverage is not designated as minimum essential coverage in this final rule. However, sponsors of foreign health coverage may apply for their coverage to be recognized as minimum essential coverage in the process outlined in § 156.604 of this final rules."
https://www.federalregister.gov/documen ... tions#h-42
How does this look at tax return time? Do I simply have to state on the tax return that I have insurance that provides minimum essential coverage or is otherwise eligible by ACA rules? Or is there some other mechanism that needs to be fulfilled to prevent the tax penalty?
I have become a US citizen.
Re: Obamacare Tax Penalty when insured through a foreign insurer
My health insurer actually sends me a form each year stating that I have minimum essential coverage. I believe you have to have this form. You should contact your insurer.natureexplorer wrote:HueyLD, this is very helpful, thanks!HueyLD wrote:Ask your foreign insurer if its policy provides minimum essential coverage. Otherwise, you will have to pay a penalty.
"Response: We agree that the health care benefits provided by foreign governments or through foreign insurance for legally admitted non-citizens of the United States vary from country to country and may create a barrier to care if health care providers in the United States do not accept payment from such coverage. Therefore, foreign health coverage is not designated as minimum essential coverage in this final rule. However, sponsors of foreign health coverage may apply for their coverage to be recognized as minimum essential coverage in the process outlined in § 156.604 of this final rules."
https://www.federalregister.gov/documen ... tions#h-42
How does this look at tax return time? Do I simply have to state on the tax return that I have insurance that provides minimum essential coverage or is otherwise eligible by ACA rules? Or is there some other mechanism that needs to be fulfilled to prevent the tax penalty?
I have become a US citizen.
Re: Obamacare Tax Penalty when insured through a foreign insurer
If your foreign insurance company provides at least MEC in accordance with the U.S. law, it will be required to send you and the IRS form a copy of 1095-B.natureexplorer wrote:How does this look at tax return time? Do I simply have to state on the tax return that I have insurance that provides minimum essential coverage or is otherwise eligible by ACA rules? Or is there some other mechanism that needs to be fulfilled to prevent the tax penalty?
Without the 1095-B, IRS will know that you do not have any MEC and will assess a penalty known as "individual shared responsibility payment (ISRP)."
In other words, contact your foreign insurance company and hopefully it has been certified by the U.S. Otherwise, get ready to pay an ISRP.
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Re: Obamacare Tax Penalty when insured through a foreign insurer
HueyLD, ok,thanks so much!HueyLD wrote:If your foreign insurance company provides at least MEC in accordance with the U.S. law, it will be required to send you and the IRS form a copy of 1095-B.
Without the 1095-B, IRS will know that you do not have any MEC and will assess a penalty known as "individual shared responsibility payment (ISRP)."
In other words, contact your foreign insurance company and hopefully it has been certified by the U.S. Otherwise, get ready to pay an ISRP.
Re: Obamacare Tax Penalty when insured through a foreign insurer
I'm interested in the outcome of this, please post a follow-up. Thank you
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Re: Obamacare Tax Penalty when insured through a foreign insurer
Sadly, I fear HueyLD is correct. I did contact the foreign insurer and they are not certified by the US and why would they? It's annoying, because the foreign insurance policy is incomparably better than anything available on the US market.clast wrote:I'm interested in the outcome of this, please post a follow-up. Thank you
Re: Obamacare Tax Penalty when insured through a foreign insurer
Sorry that it looks like your foreign health insurance is not recognized in US for tax purposes.natureexplorer wrote:Sadly, I fear HueyLD is correct. I did contact the foreign insurer and they are not certified by the US and why would they? It's annoying, because the foreign insurance policy is incomparably better than anything available on the US market.clast wrote:I'm interested in the outcome of this, please post a follow-up. Thank you
I am curious. Mindful of privacy, would you expand on why you went this route? Have you used your health insurance while in US, and did it all work satisfactorily? I have seen on expat sites that foreign insurance companies often exclude coverage in the US.
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Re: Obamacare Tax Penalty when insured through a foreign insurer
I'm grand-fathered into a foreign plan that does cover me in the US. No deductibles. No network restrictions. No premium increases due to age. Some people spend money on cars, I spend it on this insurance plan.ikowik wrote:Sorry that it looks like your foreign health insurance is not recognized in US for tax purposes.natureexplorer wrote:Sadly, I fear HueyLD is correct. I did contact the foreign insurer and they are not certified by the US and why would they? It's annoying, because the foreign insurance policy is incomparably better than anything available on the US market.clast wrote:I'm interested in the outcome of this, please post a follow-up. Thank you
I am curious. Mindful of privacy, would you expand on why you went this route? Have you used your health insurance while in US, and did it all work satisfactorily? I have seen on expat sites that foreign insurance companies often exclude coverage in the US.
Of course, Obamacare rules are throwing me a curve ball. I am now looking into starting a religion that objects to the use of health insurance, which would exempt me from the penalty
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Re: Obamacare Tax Penalty when insured through a foreign insurer
I was amused to note that the local welfare office isn't sending the certificates of insurance required by ACA to their medicaid clients; they say "the IRS allows you to self-certify your coverage this year, so we won't send you the form". I dunno whether you could self-certify your own coverage. Speaking of religion, though, you might be able to join one of the "health sharing ministries" for a fairly low cost and gain an exemption that way for less cost than the penalty. And who knows whether there will be a penalty for 2017 in any case.natureexplorer wrote: Of course, Obamacare rules are throwing me a curve ball. I am now looking into starting a religion that objects to the use of health insurance, which would exempt me from the penalty