What are the Affordable Care Act (Obamacare) requirements for Ex-Pats?

Date: November 6 2013

US expats are asking whether or not they are going to have to purchase health insurance that qualifies under the Affordable Care Act (Obamacare) or be penalized if they do not.

There is an exemption in the law that states that if an American is eligible to take the foreign earned income exclusion (Form 2555)  [see: IRC 911] either as a bonafide resident of a foreign country or under the physical presence test, the individual is exempted from the health insurance requirements of the Act.

Also, an American who is working abroad and is covered by the US employer Group Plan or covered by medicare is exempt from the Affordable Care Act.

Those who only work temporarily abroad for a few months and then return to the US are not exempted from the Acts requirements and must obtain health insurance or suffer penalties

Nonresidents who are not in the US long enough to become permanent residents (usually 183 days or more) are not required to obtain health coverage.

Can I still purchase a US health care insurance policy if I reside outside the United States?

No. In order to buy the insurance as an individual, you must be living in the US (2).

How will ObamaCare impact me as an expat? Will I owe taxes?

If you are a taxpayer that is considered a high-income earner:

  • Single filer with an AGI (adjusted gross income) over $200,000
  • Married filing jointly with an AGI over $250,000
  • Married filing separately with an AGI over $125,000
  • Head of Household with an AGI over $200,000
  • Qualifying widow(er) with an AGI over $250,000

You will have to pay an additional 3.8% tax on net investment income which includes but is not limited to interest, dividends, capital gains, rental income, royalty income, non-qualified annuities income from businesses involved in trading of financial instruments or commodities, businesses that are passive activities to the taxpayer.

It appears that the additional 3.8% tax paid by US citizens residing in Canada will not qualify for a foreign tax credit on their Canadian tax filing.


US Government

General Information


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