Partnered Post/Reviews

Expat Health Insurance & US Healthcare Reform: What Are You Entitled To?

0 Comments 18 December 2013

doctor illustration

An interesting topic keeping us Americans overseas up to date on what the US Healthcare reform will mean for us. This post has been contributed to The American Resident.

In 2010 President Obama and the United States Congress enacted the most far reaching act of reform to US healthcare in a generation. The Patient Protection & Affordable Care Act was brought about with the goal of increasing both the quality and affordability of health insurance, ensuring that all Americans would have access to similar standards of care and therefore lowering the number of uninsured individuals. Individuals who could afford to purchase health insurance coverage and choose not to would face a tax penalty, a penalty that will increase to 2.5% of household income by 2016.

Importantly, the new scheme covers only healthcare delivered in the US, leading to two problems for Americans living overseas and covered by expat health insurance abroad, Americans who do not purchase health insurance at home and are therefore technically liable for a penalty. Firstly, most of these people hold adequate cover in their countries of residence, meaning that it’s unfair to require them to buy insurance back home that they do not need. Secondly, there is nothing in the bill to suggest that medical expenses incurred outside of the US would be covered by the act.

So, what are expats entitled to as part of it? A white paper produced by the law firm Baker McKenzie describes a newly passed exemption for American nationals living and working abroad. It is here that the IRS defines what they mean by ‘living overseas’. In order to quality for exemption, individuals must hold adequate health insurance in their country of residence and be a citizen of the United States and have been a resident abroad for an entire taxable year. Importantly, the exemption is not mandatory, meaning that should you want or require it you would be allowed to purchase health insurance in the US as well as in your foreign country of residence. You’d therefore be covered if you returned home for a visit or required treatment during said visit.

Away from individual private plans, it should be noted that under the Employee Retirement Security Act company expat group health plans will be required to meet the same coverage mandates that apply to domestic plans, such as free preventative services, guaranteed renewal and the reduction of lengthy waiting periods. Exemptions are only available to fully insured company plans, for employees working abroad for at least six months.

For members of the military on shorter tours, they are covered by a scheme called Tricare. Health institutions around the world provide care to military staff, whether insured or not, with the US government then reimbursing the local facilities directly, in a similar way to Medicare.


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An American writer in the UK for over 20 years. Lives in Essex. A pretend extrovert.

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