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I am currently a US citizen traveling without insurance for 3 months. I am no longer employed but plan to be again soon after I return. I understand that, in the past, I needed "creditable coverage" which is insurance that covers you in the United States in order to prove "continuous coverage". With continuous coverage, you will still be treated for pre-existing conditions and do not have to wait through the "exclusion period" (dependent on the state but often six months) to get treatment

A few things I have read leads me to believe that this has changed under the Affordable Care Act (Obamacare) but I can't seem to find anything authoritative enough for me to trust.

I would like to avoid getting insurance that has coverage in the United States because I won't be there! Various types of travel insurance exist and are much cheaper if you get plans without US coverage.

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    The ADA prevents insurance companies from denying you based on pre-existing conditions. But how is this a travel question? – Matthew Herbst May 13 '15 at 2:34
  • @Matthew You sure that's the Americans with Disabilities Act (and not the Patient Protection and Affordable Care Act)? – cpast May 13 '15 at 3:34
  • :) typo. I meant ACA, not ADA. – Matthew Herbst May 13 '15 at 4:17
  • I'm voting to close this question as off-topic because this is about health insurance rather than travel (or even travel insurance) – SpaceDog May 13 '15 at 6:50
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    So when you say "travelling", I suppose you mean travelling outside the US? – Vince May 13 '15 at 21:36
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+50

If you were gone for a little less than three months, rather than three months or more, it qualifies as a "short gap" in coverage and so you're exempt from the requirement to have insurance. From the IRS website:

  1. What are the statutory exemptions from the requirement to obtain minimum essential coverage?

...

  1. Short coverage gap. You went without coverage for less than three consecutive months during the year. For more information, see question 22.

Otherwise, I suspect that you're out of luck. There's an exemption from having coverage if you're gone for an entire year; from the U.S. State Department's website:

U.S. citizens living abroad are generally subject to the same individual shared responsibility provision as U.S. citizens living in the United States. Starting in 2014, the individual shared responsibility provision calls for each individual to have minimum essential coverage (MEC) for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. However, U.S. citizens or residents living abroad for at least 330 days within a 12 month period are treated as having MEC during those 12 months and thus will not owe a shared responsibility payment for any of those 12 months. Also, U.S. citizens who qualify as a bona fide resident of a foreign country for an entire taxable year are treated as having MEC for that year.

It may still be cheaper to pay the tax penalty for the three months in question than it would be to buy insurance that's valid in the US, though. You might want to look in to how much the penalty would actually be for you. The penalty for full-year non-coverage is $325 or 2% of your 2015 income, whichever is higher; this would be pro-rated for the parts of the year in which you don't have coverage, so your penalty would be about a quarter of this amount.

Disclaimer: I am not a lawyer or a tax professional of any kind, so my reading could be entirely off-base. There may be other exemptions that I'm not aware of.

  • Accepted because this answer uses good sources from government websites although I suspect there is still a lot more to know about this. I've also detailed my experience in a separate answer – Scott Rogowski Sep 10 '15 at 18:08
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For whatever it's worth, I completed my entire 3 months of traveling without creditable US-based health insurance. Upon returning, I quietly bought health insurance through Covered California and no one has assessed any penalty to me. That being said, I've also not visited a doctors office or filled a prescription so I don't know whether I might still be investigated or penalized. I'll update this answer if anything changes.

  • But the test will only come when you make a claim. – DJClayworth Sep 10 '15 at 18:41

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