Many have asked about the ObamaCare Minimum Health Care Insurance Coverage Fine/Penalty/Tax that will be required for Individuals that live OUTSIDE the United States and are covered by foreign insurance. Below is our research and response:

According to U.S.C. Title 26 – INTERNAL REVENUE CODE cropped below:

CHAPTER 48—MAINTENANCE OF MINIMUM ESSENTIAL COVERAGE

(a) Requirement to maintain minimum essential coverage

An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.

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We have found the following site – Questions and Answers on the Individual Shared Responsibility Provision

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According to the site above –

12. Are US citizens living abroad subject to the individual shared responsibility provision?

Yes. However, US 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.

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So we THINK our clients will be fine. But we think for those “months” or “parts of months” that our clients reside in the US, they may be subjected to the penalty. We don’t know that part yet – still a very confusing law.

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Another question that we are often asked is also answered on this site –

23. If my income is so low that I am not required to file a federal income tax return, do I need to do anything special to claim an exemption from the individual shared responsibility provision?

No. Individuals who are not required to file a tax return for a year are automatically exempt from owing a shared responsibility payment for that year and do not need to take any further action to secure an exemption. Individuals who are not required to file a tax return for a year, but file anyway, will be able to claim the exemption on their tax return.