Expatriate plans and the ACA: not sure why this is an issue for certain big insurance firms.

The general rule is that if you are an American overseas, and would be covered under the Foreign Earned Income Exclusion, then you don’t need to show “minimum essential coverage”. The assumption behind the law is that you are probably covered by the health care system in the country in which you live. Alternatively, that you won’t be showing up back home with your health care issue to impose it on the medical system—at least, not before Open Enrollment.

However, certain insurance companies have been pressuring Congress to amend the Affordable Care Act to allow the sale of certain expatriate plans as being compliant or exempted from minimum essential coverage. Why this is necessary, as I say, is unclear, but the big corporations claim that it puts them at a competitive disadvantage with foreign insurance companies who might come in and sell deficient policies to Americans and resident aliens.

I know that, in Japan, American-based travel insurance companies, operating through two or three shell corporations, did a remarkable business selling these travel policies to long-term expats and discouraging them from enrolling in the Japan national health insurance program. This has gone on for years and years, and there is only spot enforcement of the real law.

If a long-term American expatriate is exempt from minimum essential coverage anyway, then it isn’t clear why the expat insurance companies are so concerned that Congress permit them a special exemption. It makes it sound like they operate (so to speak) in the shadows in any event, and simply want that right to continue into the indefinite future. A regulator poking around, and asking what items they are selling to whom, means that someone other than the CEO is asking about what is going on in that market. The big corporations don’t want that.

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