Sunday, November 8, 2009

Attention all ex-pats

My friend Pearl and her kids spent Shabbat with us and mentioned something about a $1900.00 payment that Americans living abroad would have to pay for healthcare coverage even though they do not use the health care system in their native country. A red flag went up in my brain and I stored it away.

Count on Jameel to have the details. If you've been following the news, you'll know that President Obama has proposed sweeping new legislature to provide Universal Health Care, which the House of Representatives passed over the weekend. The bill will now go to the senate. If the bill passes, "even as an American living in Israel, paying monthly health care taxes in Israel, (under Israeli government mandated health care laws), you will also need to pay American Health care, even though you can get zero benefit from US Health care" [quoted directly from the Muqata].

Nineteen hundred dollars is a huge sum to pay for an American benefit that I will not be using.

So what can we as ex-pats do?

We can contact our senators quickly and let them know how we feel about this bill. (You can find your senator and their contact address here). You can contact all your friends and neighbors who are American ex-pats and tell them to contact their senators. Post to your facebook accounts and e-mail lists and if your community has an e-mail listserve let them know aswell.

Jameel adds a sample letter that you can e-mail to your senators (or the senators of the last state you lived in). I don't think he'll mind that I'm posting it here:

The Honorable………
United States Senate
Washington, DC 20510

November , 2009

RE: America’s Healthy Future Act of 2009

Dear Senator………,

As one of your constituents who resides outside of the United States, I write you as my Senator to request that you alert Senator Baucus and the drafters of “America’s Healthy Future Act of 2009” concerning the urgent need for greater precision in the definition of those covered by the proposed legislation. In the version as released on September 16, 2009, there is wording which would inadvertently cause great hardship to American citizens living outside the United States. We hasten to bring this to your attention, so that it can be corrected early in the legislative process.

Overseas Americas should be exempted from the requirement to participate in the U.S. health plan and as a consequence, they should also be excluded to any right to claim a tax credit available for low income families in the United States under this health legislation.

Under Title 1, Subtitle D, “Shared Responsibility”, the Personal Responsibility Requirement currently states on page 28 that “Beginning in 2013, all U.S. citizens and legal residents” would be required to purchase coverage of one of the specified types of insurance coverage. This broad reference clearly includes U.S. citizens residing overseas. Yet citizens who are bona fide residents in foreign countries have health coverage plans valid in the country where they reside. If they subscribe to the U.S.-specific insurance outlined in the program – which they do not need and cannot use – they will be paying twice for health insurance. If they do not participate in the U.S. program, they will be subject to an excise tax to be levied on their IRS returns as defined in the bill on page 29.

The purpose of the excise tax is to encourage all Americans who benefit from the U.S. health program to participate in its financing. Americans residing overseas cannot benefit from the U.S. health system, so for them the excise tax is just that – a tax with no counter-part service. As per the September 22nd press release concerning the chairman’s markup, the maximum excise tax per family for non-participation, is $1,900, not a negligible amount.

Proposed solution:

A modest alteration in the present formulation would correct the legislation. Following is a suggested addition.:
“All U.S. citizens who meet the requirements of Sec. 911(d) (1)(A) or (B) of the Internal Revenue Code of 1986, without regard to the tax home requirement in Sec. 911(d)(1), are exempt from any mandate to purchase insurance in the United States and are not subject to the excise tax for non-participation in a U.S. health insurance plan.”

This modification would align the Senate bill to the "America’s Affordable Health Choices Act of 2009" (H.R. 3200) presented in the House of Representatives, which specifically exempts overseas Americans from a tax on not subscribing to a U.S. domestic health plan under Section 401 of the Act (which adds Section 59B of the Internal Revenue Code of 1986). America’s Affordable Health Choices Act of 2009 states under Part VIII – HEALTH RELATED TAXES
Subpart A -Tax on Individuals Without Acceptable Health Care Coverage
Section 59.B “Tax on Individuals Without Acceptable Health Coverage
(c) Exceptions:
(3) INDIVIDUALS RESIDING OUTSIDE UNITED STATES
Any qualified individual (as defined in section 911(d)) (and any qualifying child residing with such individual) shall be treated for purposes of this section as covered by acceptable coverage during the period described in subparagraph (A) or (B) of section 911(d)(1), whichever is applicable."

I thank you most sincerely for your attention to this important issue and trust that you will do all necessary to bring about the change in the text of the proposed legislation.

Sincerely yours,
(Your name)


What are you waiting for? Get to it, folks!!

6 comments:

Arthur said...

Baila

While we can talk about universal health care till we are blue in the face, Israel has a similar rule. You must keep paying bituach leumi or if and when you return you will not have health coverage for up to two years. is 1900 dollars so much for health care in the US. I mean how many people have run from Israel and all over to get us citizenship for the tax credit, arent these two a wash?

ilanadavita said...

I have no idea what the situation for French expats is but will try and find out.

Baila said...

Arthur,

1900.00 seems like alot of money to me for this tax. On our Israeli salary it's a pretty big chunk.

As far as the tax credit issue, I'm not sure how much longer people will have to "run...and get US citizenship"; the credit is scheduled to expire in 2011. And with the credit there is a question of what is being done legally and what is not. Or at least the letter vs. the spirit of the law.

I was of course, unaware of Israel's requirement to pay Bituach Leumi--do you happen to know how much the yearly cost is?

ID,

I wonder....

Batya said...

That figure is "maximum per family," not universal. If it's like Israel, it would only be if you're moving back to the states and want to be covered.
Nobody seems to know the actual details of the bill, but what I checked said: "up to $1,900 per family."
It would be nice if someone knew more about it. That's why I haven't blogged it.

Baila said...

Batya,

Check out the AACI website. They seem to have more accurate and updated information.

Jameel @ The Muqata said...

Baila (thanks for the link...I sent the issue to AACI for them to publicize as well :-)

Arthur: Yes, Israel makes you pay some sort of health insurance if you're outside of Israel -- however its not a crime to not pay it. Rather, you wont have coverage when you return to Israel (for up to 2 years). With the USA's current bill in the Senate -- not paying health insurance, as a non-resident US citizen, you must pay up to $1900 annually. Failure to pay is a federal crime, punishable by prison and a penalty.

You can't really compare the two.