I am a US citizen and taxpayer currently residing outside of the United States. This year, I will be require to live and work in Los Angeles from October 2015 – March 2016, and due to the terms of my contract, will not be provided healthcare during this period through my employer (The University of California Los Angeles).
I have three questions:
(1) Is it possible for me to apply for Obamacare for coverage ONLY during my time in the U.S.?
(2) If I arrange alternate insurance coverage only for the time that I am physically in the United States, will I incur a penalty when filing my 2015 return?
(3) What is the recommended way for me to ensure that I am covered during my stay and to avoid the tax penalty?
Thanks in advance for your reply.
If you are a US citizen you can get covered using ObamaCare's health insurance exchange when you move to the US and cancel your plan when you leave. You'll simply use special enrollment to enroll in a health plan and then cancel the plan when you leave again. The issue is that you are required to have coverage, pay a fee, or get an exemption not just for months you live here, but for all months in a year in which you are required to file taxes in the US. So you'll have to take an exemption for the remaining months in the year.
Below are the exemptions you can take as a citizen living aboard:
Citizens living abroad and certain noncitizens can claim an exemption on form 8965 - If they are:
- A U.S. citizen or resident who spent at least 330 full days outside of the U.S. during a 12-month period;
- A U.S. citizen who was a bona fide resident of a foreign country or U.S. territory;
- A resident alien who was a citizen of a foreign country with which the U.S. has an income tax treaty with a nondiscrimination clause, and you were a bona fide resident of a foreign country for the tax year; or
- Not a U.S. citizen, not a U.S. national, and not an alien lawfully present in the U.S. (For this purpose, an immigrant with Deferred Action for Childhood Arrivals (DACA) status is not considered lawfully present and therefore is eligible for this exemption.)
If you meet one of these conditions, you qualify for this exemption even if you have a social security number (SSN).
If none of these exemptions apply to you then you can look into other exemptions on the 8965 form.