Who Is Considered An Expat?
In the new Internal Revenue Service (IRS) tax code, expats are treated as if they have health insurance regardless of whether they do or not. In order to be exempt from the Obamacare insurance mandate, American expatriates must already be eligible for the IRS’ foreign earned income exclusion.
In order to meet the criteria for the exclusion that allows U.S. expats to avoid paying U.S. taxes on their first US $91,500.00 worth of income, the expatriate must have a tax home in a foreign country, as well as be either a legitimate resident in that country (Resident Temporal or Resident Permanente) or spend at least 330 days a year outside the United States.
A stamped passport would verify your time outside the U.S. whether or not you own a home in your new country.
International Health Insurance Important
It is a wise idea to have an international health care policy where ever you reside. In Mexico, the cost of a normal doctor visit, and purchasing prescriptions, is fairly inexpensive. However, if you have a critical illness or unexpected injury or accident, and need hospitalization, the costs can rise quickly and either deplete a savings account, or exhaust a credit card.
Many hospitals will not operate without payment upfront, and will certainly not let you check out without securing payment. It’s the unexpected critical care you want protection for.
Even if you are an expat on Medicare, it may not be so easy to board a plane to get back to the U.S. for treatment if you end up in the E.R. You may have to receive treatment in the country you reside in at least long enough to be able to fly back to the U.S. The cost of a hospital stay in this situation could easily exceed the cost of what an annual international health insurance policy will cost and the ease of mind you receive knowing you have coverage is priceless in a crisis situation.