The Effects of Obama Care on US Permanent Residents (Green Card Holders)
In 2010, after decades of debate and lagging behind many other developed nations, the United States passed a comprehensive healthcare act named the Affordable Care Act of 2010 (a.k.a., Obama Care). Despite all the legislative issues, legal challenges and political attacks on this law, Obama Care is here to stay and we should begin thinking about how it affects our everyday lives and how to comply with its requirements.
Obama Care comprises a complicated set of laws promulgated to provide affordable healthcare to low income individuals. But, aside from just providing affordable care, this complex body of law has provisions with serious implications for every individual and company in the US. For example, every US resident, with few exceptions, must purchase healthcare insurance and must show proof of that insurance in their 2015 tax return forms. Those who cannot show proof of healthcare insurance on their 2015 tax return forms will be assessed a tax penalty. The tax penalties for 2015 are assessed as shown in Table 1.
TABLE 1
If you don’t have coverage in 2015, you’ll pay the higher of these two amounts:
1. 2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan; OR
2. $325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975.
One important implication of the Obama Care is how it affects those Iranians who have permanent resident status (i.e., Green Card holders), file annual tax returns but do not actually live in the US. The immigration laws require that Green Card holders or permanent residents must live in the US as their primary resident location. Relevant tax laws require that every qualified Green Card holder must file tax returns at the end of each year. The Obama Care, while excluding expatriates (i.e., US citizens who live in another country) from the insurance requirements, requires Green Card holders to purchase healthcare insurance. Therefore, every Green Card holder must purchase healthcare insurance or pay a penalty in 2015. If you have a Green Card, do not have healthcare insurance and do not qualify for an exception or exemption under Obama Care, you should consider purchasing healthcare insurance. Table 2 provides a brief explanation about Obama Care requirements for non-resident aliens and international students.
TABLE 2
Non-resident aliens, international students on F, J, M and Q visas are not subject to the individual mandate for their first 5 years in the US. All other J categories (teacher, trainee, work and travel, au pair, etc.) get a 2 year pass (out of the past six).
Affordable healthcare insurance may be purchased from federal or state healthcare insurance exchanges. The open season for purchasing healthcare insurance in the exchanges ends on February 15, 2015. After the February deadline, you may not be able to purchase affordable healthcare insurance offered by the exchanges, unless you qualify for a Special Enrollment Period. Regardless, you may always purchase more expensive healthcare insurance from private insurance carriers to satisfy the Obama Care requirements at any time.
It is important to note that the tax penalties are assessed on rolling bases, meaning that in any given year, you will be assessed a penalty only for the months that you do not have health insurance coverage. Although, you may obtain the price of your insurance premiums by applying for coverage through one of the available Exchanges, determining the amount of penalties you will be assessed if you do not purchase healthcare requires complex assessment.
About the author: Reza Ghafoorian, M.D., Esq., is the principal attorney for G2Z Law Group, PLLC, a healthcare law and patent law firm located in Washington, DC.
Dr. Ghafoorian may be reached at rghafoorian@g2zlaw.com or at (202) 656-8387. Copyrights belong to G2Z Law Group, PLLC.
