Paul L. Caron

Thursday, October 3, 2013

IRS Waives Individual Mandate for Americans Living Abroad

IRS Logo 2IRS, Questions and Answers on the Individual Shared Responsibility Provision:

12. Are US citizens living abroad subject to the individual shared responsibility provision?
Yes. However, U.S. 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). These are individuals who qualify for an exclusion from income under section 911 of the Code. See Publication 54 for further information on the section 911 exclusion. They need take no further action to comply with the individual shared responsibility provision.

Wall Street Journal, U.S. Citizens Abroad Avoid Health-Law Mandate:

The Affordable Care Act requires most Americans to carry health insurance or pay a tax penalty–and there’s a reason we say “most” rather than “all.”

Americans who live abroad at least 330 days of the year will be treated as if they have qualifying insurance coverage and won’t owe any tax penalty, according to the Internal Revenue Service. That’s true regardless of whether the U.S. citizen actually has health insurance in the country where he or she lives.

The IRS reasons that it would be unfair to force Americans living abroad to buy a policy on one of the new health-insurance exchanges that opened Tuesday, because most domestic policies don’t cover anything more than emergency care overseas.

IRS News, Tax | Permalink


"Individual Shared Responsibility" -- didn't the governor of Massachusetts sign that into law in 2006?

Posted by: Bob | Oct 4, 2013 8:40:13 AM

Tell them to pick a state where their income gets them on Medicaid, declare that their residence, sign up and mooch off the government. If they're overseas and never use it it won't much matter.

Posted by: George Talbot | Oct 3, 2013 2:44:24 PM

They ought to qualify for premium subsidies, take a look at this calculator:

The bigger problem is that the cheapest plans on the exchanges have severly restricted networks; a family that travels a lot probably needs a large network of providers. It may be important enough to buy a more expensive plan (e.g., Kaiser).

And maybe wait a few weeks as the kinks are being worked out and the administrators build up some experience; I think (but you should check) that the exchanges are keeping enrollment open all year.

Bless you for helping them.

Posted by: Yo Gabba Gabba | Oct 3, 2013 2:11:42 PM

In ancient Rome it was wise to fear the bureaucrats and tax-farmers, but you could, if you were brave or rich, appeal to Caesar. In contemporary America both the bureaucrats and Caesar do as they wish and one has no place to or right to appeal. If this president continues to flaunt his own laws how long before the people follow his example?

Posted by: Jack Lifton | Oct 3, 2013 1:05:54 PM

"Individual Shared Responsibility." Pretty much says it all, as far as the incoherence of this monstrous law is concerned.

Posted by: Squid | Oct 3, 2013 11:58:37 AM

"Individual Shared Responsibility Provision:"
I've never seen the term Communism defined that way before,How cute.

Posted by: Rich K | Oct 3, 2013 10:49:12 AM

Any suggestions for what to tell a missionary couple with several children who spend 9 or 10 months in South America, and the rest of the year back in the US, but not in the same state because they travel to preach to supporters? Their income is below US minimum wage.

Incidentally, I have accessed the healthcare website far enough to find the caveat that posted rates "are subject to change." The media are quoting government officials who point out that the insurance does not start until January, and the enrollment deadline is not until December 15. But does anyone know of a reporter who has asked if the rates will be the same on December 15, as they are now?

Posted by: Bob | Oct 3, 2013 10:10:25 AM