Good Neighbor Insurance provides both individual, as well as group health care coverage in Arizona as well as travel insurance cover. We are pleased to share the following information for our clients who currently have individual coverage.
Individual Shared Responsibility Provision
Question: An Australian citizen lives in Arizona 3 to 8 months out of the year, owns property here, files a tax return here; is she required to have US health insurance while she is here in Arizona?
Answer: A tax advisor would probably know the answer, but I believe the fact that she files a tax return is the linchpin that causes a “yes”.
This is what the IRS says:
Yes. However, U.S. citizens who are not physically present in the United States for at least 330 full days within a 12-month period are treated as having minimum essential coverage for that 12-month period. In addition, U.S. citizens who are bona fide residents of a foreign country (or countries) for an entire taxable year are treated as having minimum essential coverage for that year. In general, these are individuals who qualify for a foreign earned income exclusion under section 911 of the Internal Revenue Code. Individuals may qualify for this rule even if they cannot use the exclusion for all of their foreign earned income because, for example, they are employees of the U.S.
Individuals that qualify for this rule need take no further action to comply with the individual shared responsibility provision during the months when they qualify. See Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, for further information on the foreign earned income exclusion.
U.S. citizens who meet neither the physical presence nor residency requirements will need to maintain minimum essential coverage, qualify for an exemption or make a shared responsibility payment for each month of the year. For this purpose, minimum essential coverage includes a group health plan provided by an overseas employer. One exemption that may be particularly relevant to U.S. citizens living abroad for a small part of a year is the exemption for a short coverage gap. This exemption provides that no shared responsibility payment will be due for a once-per-year gap in coverage that lasts less than three months.”
Tax Credit Payback
Question: If a family was eligible for a $320 tax credit these past few months, does he have to pay it back when he finalizes his taxes at the end of the year, now that he is enrolling in employer group health coverage effective July 1, 2014? Is it still based on household income, even though he legitimately received the $320 for a few months? I told him he can’t have both, as his employer coverage does meet the (1) minimum value, and (2) he is not paying more than 9.5% of his Box 1 W-2 income. A local accountant confirmed they have not received guidance from the government on this issue.
Answer: The individual will need to show proof of coverage (the individual plan/subsidy) when he files his taxes. That should solve the problem.
Good Neighbor’s qualified and licensed professionals are always here to help you with your questions and needs. We strive to help our clients find good, cost-effective health, travel, and life insurance while providing caring service with integrity. Please call us at 480-813-9100 or email us at email@example.com.