ACA & International Students
Let’s Get Down to Basics
The Affordable Care Act (ACA) is a health care reform law that is supposed to help increase the accessibility, affordability and overall quality of the US healthcare system. Put forth by President Barack Obama, ACA requires that all US citizens and residents have health insurance that meets the mandated criteria, or they are subject to a fine in their taxes. Keep in mind, that international students are normally exempt from the ACA compliance.
Exemption for International Students
Normally, international students are not in the US for a long period of time. To determine whether your insurance needs to be compliant with the ACA regulations, the Internal Revenue Service (IRS) will look at your tax status. If in your tax status you are still considered a ‘non-resident alien’ you will not be subject to comply with the ACA; as soon as you transition to become a ‘resident alien’ you will need to buy insurance that meets all the ACA requirements or you will need to pay the fine in your taxes.
The good part, normally international students on F, J, Q and M visas are considered ‘non-resident aliens’ for their tax status and thus will not have to purchase an ACA compliant plan. This is good because the health insurance plans designed for US citizens or permanent residents is not the best when you only need it short term. The same goes for citizens/permanent residents, they would never have a short term plan as their permanent one, this would be very costly.
Most ACA-compliant plans are designed in such a way, that the person purchasing the plan will keep the coverage for their whole life; because of this they the plan will offer some benefits that an international student does not need. For example, every ACA complaint health insurance plan now needs to offer coverage for wellness and preventive care. While these are important to get on a yearly basis; making them be covered in a health insurance plan will rise the premiums drastically. Due to this, international student health insurance plans do not cover such, they will allow the person to pay for these out of pocket, and thus keep the monthly premium at a low. On the other hand, ACA compliant domestic plans do not offer certain benefits that an international student would need, when being away from home. For example, normally, international student health insurance plans cover medical evacuation and repatriation, which would cover for your body to be returned to your home country in case you pass away. Nobody wants these benefits, but being away from home, they become a necessity. International student insurance plans, normally offer a range of travel benefits, that are essential when you are living away from home.
Insurance for International Students
While you are (normally) exempt from meeting ACA regulations, your school (high school, college or university) may have their own list of health insurance requirements, that must be met. Let’s dig a little deeper, to determine some requirements that you may need.
F, Q and M visa holders do not have any government related requirements, in this case, as mentioned before, they will have to comply with the minimums set forth by the school. Check out our school requirements database to check out the specs based on your school/university.
On the other hand, J visa holders have strict government requirements they need to follow through their whole stay. Both the visa holder and their dependents will be held accountable for those requirements. Keep in mind the school may put some additional requirements of their own.
There are a few ways that schools handle their health insurance plans for international insurance. Look below to see the breakdown:
- Group health insurance plan: This means that the schools requires international students to purchase the plan they have negotiated for the school; without the option to waive out of such.
- Group health insurance plan with option to waive: Other schools will give you the option to either get the group plan they offer, or get your own insurance that meets the requirements they have decided upon as necessary. Each school will have a list of the requirements needed to be fulfilled to waive out.
- Individual health insurance plan: This does not happen often, but some schools will not offer a ‘school insurance plan,’ giving you the liberty of deciding the level of coverage that you need and the amount of money you want to spend on insurance.
ACA impact on OPT?
What if I stay more than 5 years?
Normally, international students stay in the US for a short period of time, and for the most part, are not required to purchase ACA compliant health insurance. If a student stays more than five years, they have to take an ‘substantial presence test’ to determine their tax status.
Even if you pass the presence test, you can get a ‘closer connection’ exemption. To get this exemption you will be required to show deep ties to someone in your home country, and that this tie shows you will be going back to your home country after your stay in the US. Please check out the IRS website for more information on this exemption.
When buying health insurance, it is always a good idea to contact an agent to know whether or not you are meeting all the requirements set forth either by the government or the school. G4ST can help you through this process too.