To qualify as an “expatriate health plan,” substantially all of the primary enrollees must be “qualified expatriates.” A “qualified expatriate” is a primary insured meeting all of the following:
Qualified Expatriates in the U.S.:
The individual’s skills, qualification, job duties, or expertise is of a type that has caused the employer to assign him to the U.S. for a specific temporary purpose or assignment tied to employment; and
In connection with such transfer or assignment, the plan sponsor reasonably determines that the individual will require access to health insurance in multiple countries, and is offered other multi-national benefits on a periodic basis (e.g., tax equalization benefits, cross-border moving expenses, compensation to enable the expatriate to return to his home country);
Qualified Expatriates Outside of the U.S.:
The individual is working outside the U.S. for a period of at least 180 days in a consecutive 12-month period that overlaps with the plan year.
For purposes of the definition, “U.S.” includes the 50 states, D.C., and Puerto Rico.
There are also special provisions for members 501(c)(3) and 501(c)(4) organizations who are traveling or relocating internationally for the organization, including students and religious missionaries.
Expatriate Health Plans are Minimum Essential Coverage
Expatriate health plans qualify as minimum essential coverage. This means that an expatriate health plan will satisfy the employer mandate and the enrollee’s individual mandate.
Employers are Still Subject to §6055/§6056 Reporting and Cadillac Tax on Certain Expatriates
The exemption from ACA requirements does not apply for the new health information reporting requirements for the beginning of 2016.
However, the information statements (primarily the Forms 1094-C and 1095-C for employers) may be provided electronically to individuals covered under an expatriate health plan even if the individual has not consented to electronic distribution (as long as the individual has not explicitly refused electronic distribution).
Expatriate health plans will be exempt from the §4980I excise tax on high cost employer-sponsored health coverage (generally referred to as the “Cadillac tax”) that is scheduled to take effect in 2018, except for expatriates assigned to work in the U.S.
Effective Date
These provisions related to expatriate health plans apply to expatriate health plans issued or renewed on or after July 1, 2015.