Treasury issues proposed regulations on expatriate health plans

Recently released proposed regulations provide rules for expatriate health plans, expatriate health plan issuers and qualified expatriates under the Expatriate Health Coverage Clarification Act of 2014 (EHCCA).  

The EHCCA provides that, with certain exceptions, Affordable Care Act (ACA) requirements don’t apply to expatriate health plans, the issuers of expatriate health coverage and employers in their capacity as sponsors of expatriate health plans. Examples of exceptions to this general rule include that expatriate health plans are treated as minimum essential coverage under Section 5000A, the employer shared responsibility requirements of Section 4980H continue to apply, and the applicable Form 1094 and Form 1095 reporting requirements apply, with certain modifications.  

These proposed regulations define an expatriate health plan as a plan offered to qualified expatriates that satisfies certain requirements. Qualified expatriates include individuals in one of three categories:
  1. Foreign workers in the U.S.
  2. Individuals who work abroad for a certain period of time
  3. Students and missionaries

The proposed regulations address other rules that apply to expatriate health plans, including the services that must be covered by the plan, the application of the ACA minimum value requirements, coverage for dependents up to age 26 and pre-existing condition exclusions.  
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.