Insurance for the global nomad ???

[papadad111]

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What insurance is recommended for those spending a "significant amount of time" traveling or living abroad each year ? Do you have dual policies or does the policy you have cover you while abroad ? Presume ACA purchased insurance only covers you when in usa ... Or outside usa for x days?

 

[AnIntentionalRoad]

When we traveled extensively abroad by sailboat we researched special purpose insurance policies that basically paid for transportation back to the US and care in the US in the case of serious need.

It did require that you stay outside the US but for a limited number of days each year. They wanted to ensure it wasn't used as a replacement for regular policies.

 

[kramer]

One thing to keep in mind is that, even if you are only a part-time resident of the USA, you will need to keep (virtually) year-around health coverage based in the USA in order to avoid the ACA mandatory health coverage penalty. Your overseas-based health insurance will not satisfy the requirements, even if it covers you in the USA and even if it covers you year-around.

Also, even if they provide overseas coverage, many USA-based health policies will disqualify you from overseas coverage if you are gone too long.

It can be a Catch 22.

 

[papadad111]

Thanks Kramer. Know you are a global nomad too ... What is your plan ? Pay the penalty or get some form of insurance. ? Hoping they change this portion of the law but doubtful.

 

[Alan]

One thing to keep in mind is that, even if you are only a part-time resident of the USA, you will need to keep (virtually) year-around health coverage based in the USA in order to avoid the ACA mandatory health coverage penalty. Your overseas-based health insurance will not satisfy the requirements, even if it covers you in the USA and even if it covers you year-around.

Also, even if they provide overseas coverage, many USA-based health policies will disqualify you from overseas coverage if you are gone too long.

It can be a Catch 22.

What if you are US citizen living permanently in a foreign company? You still have to file a tax return but do you really have to buy health insurance? Surely there must be an "out" for the thousands of US Ex-Pats who don't live in the US and for the thousands of "accidental" US citizens who were born here, haven't lived here since they were children, but still have to file a tax return. Making them buy health insurance as well sounds crazy.

 

[kramer]

What if you are US citizen living permanently in a foreign company? You still have to file a tax return but do you really have to buy health insurance? Surely there must be an "out" for the thousands of US Ex-Pats who don't live in the US and for the thousands of "accidental" US citizens who were born here, haven't lived here since they were children, but still have to file a tax return. Making them buy health insurance as well sounds crazy.

You are correct in that there is an out. The out is if you are truly a resident of another country by passing the IRS bona-fide residence test or physical presence test.

However, a global nomad who is traveling abroad most of the year and then returning "home" to the USA for more than approximately 35 days a year will not qualify and be required to carry year around USA-based health insurance assuming he has not established an on-going bona-fide residence in a particular country abroad. (This is not an exact legal definition but you get the idea)

I believe I am now exempt as I have an established residency (both a residence and legal status) in the Philippines so I can visit the USA for more than 35 days per year as I am a bona-fide resident in a particular foreign country.

But I used to be a global nomad living in one country on a tourist visa for 8 months, another country for 4 months, etc. But I spent maybe 7 weeks per year visiting the USA and I would have needed year-around health insurance in the USA even though I was not technically a resident of any state and regardless of my insurance status abroad and even though I was insured by travel insurance for visits to the USA.

It is a poorly though out area of the law. The IRS understandably makes the residency issues strict because the idea is to not allow people to escape income taxes by earning foreign income -- but this strictness is now applied in a whole different area of living where it does not necessarily make sense.

 

[Alan]

Thanks kramer, good explanation, and I'm pleased to hear that you are not burdened by having to carry year round health insurance.

 

[kramer]

Thanks Kramer. Know you are a global nomad too ... What is your plan ? Pay the penalty or get some form of insurance. ? Hoping they change this portion of the law but doubtful.

I have an insurance based in the Philippines that, for the most part, is valid only in the Philippines. I have it mostly to guarantee entrance to any hospital here without first flashing cash, I don't consider it great health insurance.

For any trips to the USA, I buy travel health insurance. Many of these insurances require you to be a resident abroad and a few require that you not be a US citizen. For my last couple of USA trips, I have used IHI BUPA which I think is branded under World Nomads. I put down my residence as the Philippines during the application process. I can't remember exactly, but I think it costs around $200/month and is not age-rated.

However, I have to be careful to never be considered a resident of the USA as none of these insurances would qualify as valid coverage under Obamacare. Even if you have a top notch expensive year-around global nomad plan from a top foreign insurance company like BUPA, it will not qualify.

 

[candrew]

You might want to have look here:

Insurance - AARO - Association of Americans Resident Overseas

 

[papadad111]

Thanks Kramer. Helpful. I've looked into IHI Bupa too.

Where in the philippines do you reside ?

Do you use philhealth local insurance or something else ?

 

[kramer]

Thanks Kramer. Helpful. I've looked into IHI Bupa too.

Where in the philippines do you reside ?

Do you use philhealth local insurance or something else ?

I use Phil Health insurance in the Philippines. Basically, it is for getting admitted to a hospital if an emergency were to happen. It would help with the bill, too, but that is not the reason that I have it. The cost is only about $60/year -- it is basically the national public health insurance system and it provides some reimbursement at private hospitals, also. But I really consider myself self-insured.

For trips to the USA, I use World Nomads travel health insurance.

I live on the main Luzon island a couple of hours outside of (polluted and traffic-clogged) Manila.

As an interesting aside, if one is a resident of the Philippines, he cannot purchase Bupa insurance that covers one in the Philippines. That is because there is a (tragically flawed) law in the Philippines that prevents foreign insurance companies selling insurance to expat residents of the Philippines or Filipinos. You can use it if you are a resident somewhere else and travel to the Philippines.

 

[papadad111]

Kramer - a pm is being sent to you. Have a few more country specific questions based on your experience. I'm a global nomad but not insurance savvy - was always covered under mega corp global policy while roving the world. FIRE changes the insurance piece of that. Help !!

Thanks !

 

[kramer]

OK, please send me a PM, I will help all that I can

 

[onemorehappycamper]

Hi Papa..
I was wondering if there was a any conclusion drawn for this question as a result of your investigations. It would be great if you could share your plans for tackling the global nomad health coverage question.. I am also interested in doing some longer term traveling and wonder about the best approach ? Thanks.


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[papadad111]

No significant updates -- here is what I am learning from all my expat friends and colleagues who are retired.

The information that Kramer notes is correct -- most likely will have to have both ACA health insurance and then a supplemental policy to cover non-USA medical care. That could come in the form of a true global policy (IHI Bupa or similar) or a local country-specific policy (obtained once on-ground in specific country location). In some cases, holding ACA insurance and a generic medivac policy (International SOS as example) or some combination of a medivac policy and then self-insuring for all but major issues is a possibility.

Self insuring is an interesting route. In some countries, your care goes up exponentially when self insuring (paying cash). Something along the lines of 50K USD should be set aside for this -- assuming a worst case scenario such as a major heart attack, stroke, ICU care for an extended period of time before becoming stable enough to be medivac'd back to USA.

Once obtaining physical residency / physical presence in a location (example, obtaining a retirement visa) then full conversion to local or international (non ACA) policy is possible without tax penalty.

I am finding that it's even more difficult being a nomad from state to state INSIDE the USA and trying to get in network coverage for an ACA bronze policy in different state than your policy of cover. Comparitively, the international stuff is fairly easy --

This is because the USA medical care system is so expensive and there are so many caveats and requirements for cover.

Lets continue to share best known methods, good experience with global insurance companies etc.

 

[onemorehappycamper]

Thanks a million for providing a great synopsis of current status, much appreciated. No easy options ;-)


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[retirementguy1]

While researching information for a move to Puerto Rico I learned that PR is exempt from the ACA. You need to live there for 1 year and apply for PR citizenship. Of course you need to be a US citizen. Since that is the last US territory you lived in you would be exempt from the ACA while you travel. It is an interesting loophole and should be explored further. This is just surface research so YMMV. Also investment income is exempt from PR taxes.

 

[papadad111]

Good insights into PR. I posted something a while ago as there are some significant investment income tax advantages. That said, PR can be a challenging place for even the experienced expat/traveler.

 

[retirementguy1]

So my earlier post was a little off. I don't think you would need to live in PR for a year to avoid the ACA. Get a drivers license and mailing address and you are probably good.
This is loop hole #1


If you do live in PR for a year and get PR citizenship, and then you live in Spain on a proper visa for two years, you can apply for dual citizenship. Normally this would take ten years but since PR was a Spanish territory you can apply after two. This would give you a proper residency within the entire EU. A loop hole within a loop hole. It's an interesting concept but not many ER members would be interested in doing it. Once again YMMV

 

[papadad111]

Update: Given that this is a global nomads topic, I am researching and navigating to get health care coverage both inside USA and outside USA post mega-corp.

I have found some global policies. typically this requires at least 185 days per year outside USA so if you don't meet that level of abroad travel, it may not apply to you. Unclear how the residency stuff is tested but am sure they check it closely. One could always snowbird in Mexico or some other close location to be outside the USA for the required duration.

The policy I was eyeballing will cover me outside USA and also cover me Inside the USA for up to 180 days per year. You must specify this USA coverage feature and it is more expensive. Versus A fully non- USA policy.

Some still may want or need both an ACA and a non-USA policy which is another way to do this depending on your circumstance of how long you stay where. If you are just an occasional global traveler then a short term travel-trip policy may be better for you while abroad.

Back to this policy I am eyeballing - it has enough of a savings in my case versus an ACA bronze un-subsidized policy to keep investigating.

Note: I won't qualify for any ACA subsidy in year 1 and 2 of retirement due to deferred comp payouts pushing MAGI above threshhold.

Also being out of ACA compliance is not such a big deal right now as I understand it - the tax penalty is still relatively tiny.

To be fully ACA tax penalty waived I believe you have to be out of USA for a full 330 days. I won't meet that guideline but will be out for of USA most likely for at least 185 days per year.

So some findings in random order: living outside the USA and being able to get this policy seems to reduce health insurance cost significantly. This is because the policy is not under ACA mandates and so I can eliminate some unnecessary coverage. Eg. No need for maternity care. It also only covers me in USA - high cost medical care area - for up to half a year - assumption is majority of care happens in which ever( lower cost )country I reside.

Hypothetical example. No pre existing conditions - Mid 40s non smoker 2 adults and 2 teenage kids:




Deductible is 2500/year and premium is 450 per month.

Compared to a bronze ACA plan: $10000 deductible and $1100 per month premium.

And Megacorp cobra is at least 1400 per month.

On any given year that's $8000 of exposure versus nearly $24000 exposure so 1/3 the cost.

These policies are not super easy to get - they are written like old days of pre ACA. Application is online and then you send medical records in. They have Pre existing condition exclusions, etc. So not everyone is accepted ...or accepted with caveats.
So, ACA still has its place and rationale.


Will continue to investigate. Makes me realize just how expensive healthcare in USA has become ...

Health care is likely the number 1 budget line item on most early retiree budgets.

 

[W2R]

What a hassle! Good luck in your continued efforts/research, papadad111.

 

[iac1003]

Update: Given that this is a global nomads topic, I am researching and navigating to get health care coverage both inside USA and outside USA post mega-corp.

I have found some global policies. typically this requires at least 185 days per year outside USA so if you don't meet that level of abroad travel, it may not apply to you. Unclear how the residency stuff is tested but am sure they check it closely. One could always snowbird in Mexico or some other close location to be outside the USA for the required duration.

The policy I was eyeballing will cover me outside USA and also cover me Inside the USA for up to 180 days per year. You must specify this USA coverage feature and it is more expensive. Versus A fully non- USA policy.

Some still may want or need both an ACA and a non-USA policy which is another way to do this depending on your circumstance of how long you stay where. If you are just an occasional global traveler then a short term travel-trip policy may be better for you while abroad.

Back to this policy I am eyeballing - it has enough of a savings in my case versus an ACA bronze un-subsidized policy to keep investigating.

Note: I won't qualify for any ACA subsidy in year 1 and 2 of retirement due to deferred comp payouts pushing MAGI above threshhold.

Also being out of ACA compliance is not such a big deal right now as I understand it - the tax penalty is still relatively tiny.

To be fully ACA tax penalty waived I believe you have to be out of USA for a full 330 days. I won't meet that guideline but will be out for of USA most likely for at least 185 days per year.

So some findings in random order: living outside the USA and being able to get this policy seems to reduce health insurance cost significantly. This is because the policy is not under ACA mandates and so I can eliminate some unnecessary coverage. Eg. No need for maternity care. It also only covers me in USA - high cost medical care area - for up to half a year - assumption is majority of care happens in which ever( lower cost )country I reside.

Hypothetical example. No pre existing conditions - Mid 40s non smoker 2 adults and 2 teenage kids:




Deductible is 2500/year and premium is 450 per month.

Compared to a bronze ACA plan: $10000 deductible and $1100 per month premium.

And Megacorp cobra is at least 1400 per month.

On any given year that's $8000 of exposure versus nearly $24000 exposure so 1/3 the cost.

These policies are not super easy to get - they are written like old days of pre ACA. Application is online and then you send medical records in. They have Pre existing condition exclusions, etc. So not everyone is accepted ...or accepted with caveats.
So, ACA still has its place and rationale.


Will continue to investigate. Makes me realize just how expensive healthcare in USA has become ...

Health care is likely the number 1 budget line item on most early retiree budgets.

Following. I would be interested in knowing which plan this is. Thanks.


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[papadad111]

I recommend having a look at a web site that is a broker for insurance for global ( primarily non-USA based) nomads. Http://brokerfish.com
No affiliation at all. Many choices.
Need to understand in USA how the insurance pre approval process works too. Not as simple as seeing any doc anywhere.

W2R- this global lifestyle is not for everyone- definitely trade offs required and there are pluses and minuses. Lots of work to get sorted with some insurance. I won't debate that lifestyle aspect here but will say that we are in mid-upper 40s and DW and I are about to FIRE and look forward to some more adventures abroad while still young enough to enjoy fully. Balanced with being near and available for aging parents.

We may evaluate after 1-3 years whether or not to launch an encore career too... Depends how the investment returns and retirement budget works out. Irrespective of that I am fearful of getting bored so some form of paid work or a small business venture is a likely activity for us.

Take care !!