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Overview | Part 1 | Part 2 | Part 3

  The Patient Protection and Affordable Care Act (PPACA - commonly called Obamacare) and how it affects you.

Part 3


Throughout 2013 we have tried to keep you up to date on the impact that the Affordable Care Act (ACA) will have on you. If you would like to review previous information released by TTc please click here.

As many of you will be aware, there has been a major uproar from individuals in the US over received cancellation notices on their insurance policies. The discontent and confusion arose because originally they were promised that they would be able to keep their policies once the ACA came in to effect. As a result, in November, President Obama announced a couple of major revisions to the ACA to address these issues. These changes will hopefully mean that as an existing TTc member you will be exempt from purchasing a compliant insurance policy or paying a tax penalty.

The two changes that came into effect were "Keep what you have" and the treatment of "Foreign Plans".

Keep What You Have
  • When launching the ACA President Obama made several promises that included those who have existing cover would be able to keep their existing policies. However, in recent months, it was realized that the existing ACA legislation meant that this was not possible. In light of this, a new amendment has been introduced, allowing anyone with an existing policy as of Oct 2013, to renew their policy for an additional year; satisfying the ACA requirements for an additional 12 months.
Foreign Plan Exemption
  • Non-US nationals:  If you have an insurance policy purchased through a non-US company (which is the case with a TTc policy), you will satisfy the individual mandate as long as the foreign policy offers cover in the US.

  • US nationals:  Previously a US national would only be exempt from the individual mandate if they lived outside of the US for the entire year, or at least 330 days within a 12-month period.

    The latest guidance states that if a US national has an insurance policy purchased through a non-US company (like TTc), they are required to be out of the US for at least one day in each calendar month in order to satisfy the individual mandate.

    In this case a member would only pay the tax penalty for any full calendar month that they did not leave the US.  One short coverage gap of less than three months is also permitted.

    We have had it clarified that the tax penalty is calculated on a monthly basis.  For 2014 where the tax penalty is the greater of US$95, or 1% of your taxable income a 1 month penalty would equate to US$7.92 or 0.0833% of your taxable income.  Please see earlier communications about increasing penalties in 2015 and beyond.

          Examples:
    • An American member teaching in China returning home on June 2nd 2014 and then returning to China on July 30th 2014 but remained outside of the United States for the rest of the year would have satisfied the minimum essential coverage for the entire year and would not be liable for the tax penalty.

    • Our understanding is that an American member teaching in China returning home on June 2nd 2014 and then returning to China on August 12th 2014 but remained outside of the United States for the rest of the year would be liable for the tax penalty, under this single provision, but as this is the only gap in coverage that they have had in this single year, they will actually still not need to pay the tax penalty due to the short-coverage gap provision.  The short coverage gap provision applies as in this case the coverage gap is less than three months.
That said, for a number of members within the United States I realize that due to your income level you will be getting significant subsidies to purchase compliant policies through the new online exchanges.  Where this is a suitable fit for your needs and making you a saving.  I would encourage you to take advantage of this provision from the government.  Unfortunately this is not something that can be accessed with our plans.

However, please note that the subsidized plans in almost all cases will only cover you within the United States.  We are currently in the process of developing and pricing a plan that will offer similar benefits to our current plans that can be bolted on to a compliant policy to offer international cover on a long-term basis.  This should be significantly cheaper than our existing plans due to the lack of need to cover someone while they are in the US, and should offer better coverage than a standard travel policy.  We will keep you updated once we are ready to launch this policy.

If you do find a better solution available to you, please go with our blessing, as we know that this may be a wonderful opportunity.  However, please be mindful that if you are over (or nearing) 65, or have pre-existing conditions, it may not be possible to rejoin a TTc policy in the future.

If you have any questions or are considering returning to us in the future, please do speak to us before stopping your policy.  We would encourage you to do this, as our new member entry criteria mean that it may not be possible for you to return in the future, and we may need to find another solution for you.

I realize that this is a very large and complicated topic, and as has been recently proved, one that is still evolving.  If you would like to speak to me or my team to discuss your options, either with a TTc policy or another one, we are available to help.


I hope this communication is useful, timely and puts your mind at rest.


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