Job Discussion Forums

[SENTINEL33]

"Letters of Employment" have been briefly discussed in the KSA forum in several instances. This has usually been with regard job applicants seeking to prove years of teaching experience so as to get offered a higher salary.

However, this "Letter of Employment" business works the other way around too.

US citizens contemplating returning to the US and enrolling in OBAMACARE, should be aware that proof that you were actually residing overseas and that you had health coverage during this period is, apparently, something you're going to have to provide in order to enroll in Obamacare without penalty.

Apparently, no thought was put into the program as to how to deal with people living overseas who cannot meet any "deadlines". Couple of friends of mine are right now going through this process and they tell me it's a harrowing experience (because no one knows what to do or what is really required).

If you fall into this category, I suggest you get a "Letter of Employment" (or whatever they call it) from your Saudi employer but even then, keep your passport available, and most important, get a copy of your original employment contract which almost always states what medical coverage your KSA employer has offered you.

(Letters of Employment hardly ever state that you had health coverage, so you have to prove it elsehow).

Also, if you were employed in KSA for an extended period of time, any subsequent "Letter of Employment Extension) or whatever your employer calls it, must be kept for future use.

Income tax returns (assuming you've been filing all along) could also be crucial in your eventual confrontation with Obamacare.

(Course, none of this applies to those who have categorically stated: "I will never set foot in the USA ever again")

[helenl]

All my employment contracts have clearly stated that my employer will provide me with medical care for the duration. Would that suffice?

[SENTINEL33]

[nomad soul]

[SENTINEL33]

Nomad Soul said: " Uh...?
==================

I'm assuming, NS, you found some kind of contradiction in my 2 msgs?

Possibly it's because my 1st msg sounds like I'm reading from a list of regulations whereas my second msg states none of what I'm saying is "official".

All my advice, so far, has been qualified with terms like "apparently" and as I told helen1, "I suggest" she do certain things. Basically, I'm telling readers to keep as many employment records since this is what my sources in the US are being asked for.

But I repeat - none of this is "official" information. I'm just alerting readers of the adverse affects that MIGHT take place IF they simply throw all documents away.

[johnslat]

A little Google might clear this up:

U.S. Citizens Abroad Avoid Health-Law Mandate


The Affordable Care Act requires most Americans to carry health insurance or pay a tax penalty–and there’s a reason we say “most” rather than “all.”

Americans who live abroad at least 330 days of the year will be treated as if they have qualifying insurance coverage and won’t owe any tax penalty, according to the Internal Revenue Service. That’s true regardless of whether the U.S. citizen actually has health insurance in the country where he or she lives.

The IRS reasons that it would be unfair to force Americans living abroad to buy a policy on one of the new health-insurance exchanges that opened Tuesday, because most domestic policies don’t cover anything more than emergency care overseas. This IRS document has more information (see #12 for the information on U.S. citizens abroad).

There are a few other cases where people are exempted from the insurance mandate. These include federally recognized Indian tribe members, prisoners and some religious groups whose beliefs might contradict the law’s requirements. States can also provide hardship exemptions to individuals or families.

Also, if someone loses coverage–say, by being laid off from a job that included health insurance–the penalty doesn’t kick in right away. Consumers will have a three-month grace period to get new coverage. And the IRS has determined that as long as consumers have insurance for at least one day of a month, they will have satisfied the law’s requirements for that month."

http://blogs.wsj.com/washwire/2013/10/02/u-s-citizens-abroad-avoid-health-law-mandate/


"Who Qualifies for This Exemption?

In order to qualify for the Obamacare exemption, the individual must qualify for the benefits of claiming the foreign earned income / foreign housing exclusions under Section 911 of the US Internal Revenue Code. Generally, Americans working abroad who meet particular requirements are eligible to exclude from US taxable income certain amounts of foreign earned income (wages, compensation for services) and housing costs paid by their employers under rules governing the Foreign Earned Income Exclusion (FEIE), and Foreign Housing Exclusion (FHE).

For an individual to qualify for the FEIE and / or FHE, a “tax home” must be maintained in a foreign country and either the Bona Fide Foreign Resident (BFR) or Physical Presence Test (PPT) must be met.

Generally, a “tax home” is the location of the main place of business, irrespective of where a family home is maintained. If the nature of a person’s work means that there is no regular or main place of business, then the tax home may be the place where the person regularly lives. A person is not considered to have a tax home in a foreign country if the person’s household is maintained in the US. Temporary presence in the US (for example, for vacation or for employment), does not necessarily mean that the household is in the US during such time.

The BFR Test: To meet the BFR Test, a person must be a bona fide resident of a foreign country for an uninterrupted period which includes a full calendar year. A resident is one who, based on the facts and circumstances, has established a “tax home” and has in effect settled in that country.

The Physical Presence Test: To meet the PPT an individual must be physically present in a foreign country or countries for 330 days in any 12 consecutive months. The 330 days do not have to be consecutive, but they must be whole days present in a foreign country. Travel time does not count toward the requisite 330 days if the travel is in the US or its possessions for periods of 24 hours or more, or takes place over international waters. Recordkeeping is critical. The PPT often helps an individual on short assignment. It also enables an individual to come back to the US for short periods (generally up to one month) in any consecutive 12-month period and still qualify for the exclusions.

Many people have asked if the individual must actually file returns and claim the FEIE and FHE in order to be exempt. My view is that so long as the individual meets the “tax home” test and either the BFR or PPT test, he should be exempt from the health care coverage rules. In other words, I believe the individual must merely qualify for the benefits of claiming the foreign earned income / foreign housing exclusions under Section 911 – the law does not say he has to actually claim them to qualify for the exemption. This would make sense since the exemption exists because it would not be fair to force Americans living overseas to purchase a US policy on one of US health insurance marketplaces since generally these policies do not provide coverage for overseas medical care. The law was trying to provide relief for the US person who is truly residing abroad and uses the “tax home”, BFR and PPT concepts to implement the exemption.

Copied below is some of the supplementary information from the final Treasury Regulations implementing the Obamacare provisions:"

http://blogs.angloinfo.com/us-tax/2013/11/11/us-citizens-abroad-and-obamacare/

ACA – Obamacare’s Effects on American Expats Living Abroad
Oct. 24, 2013 Update:

http://yucalandia.com/living-in-yucatan-mexico/aca-obamacares-effects-on-american-expats-living-abroad/


U.S. citizens living outside the U.S.
U.S. citizens living in a foreign country are not required to get health insurance coverage under the Affordable Care Act. If you're uninsured and living abroad, you don't have to pay the fee that other uninsured U.S. citizens may have to pay.

Generally, health insurance coverage in the Marketplace covers health care provided by doctors, hospitals, and medical services within the United States. If you're living abroad, it's important to know this before you consider buying Marketplace insurance.

Questions? Call 1-800-318-2596, 24 hours a day, 7 days a week. (TTY: 1-855-889-4325)

https://www.healthcare.gov/am-i-eligible-for-coverage-in-the-marketplace/

Regards,
John

[Xie Lin]

[johnslat]

Maybe it's "harrowing" and a "confrontation" depending on where you live in the US:

http://www.bloomberg.com/news/2013-10-24/tale-of-two-obamacares-as-some-states-bypass-u-s-site.html

Regards,
John

[SENTINEL33]

Many thanks to johnslat for a marvelous piece of research updating this rather complicated project.

Bottom line: regardless of what you hear, it still behooves you to retain as much documentation as possible of your last job, especially if it was overseas.

@ xie lin - people in my own family who have never been outside the US report all kinds of problems and kinks enrolling in the program. As johslat says, it largely has to do with which state you reside in.

[johnslat]

Dear SENTINEL33,

You're most welcome. I believe that if people overseas file with the IRS every year (as they're supposed to ) copies of that would be quite sufficient to prove overseas habitation.

Regards,
John

[Xie Lin]