The IRS has graciously granted U.S. citizens overseas a waiver of the individual mandate:
12. Are US citizens living abroad subject to the individual shared responsibility provision?
Yes. However, U.S. citizens who live abroad for a calendar year (or at least 330 days within a 12 month period) are treated as having minimum essential coverage for the year (or period). These are individuals who qualify for an exclusion from income under section 911 of the Code. See Publication 54 for further information on the section 911 exclusion. They need take no further action to comply with the individual shared responsibility provision.
A couple of points. First, this is a fine example of how America’s national legislators have simply lost the ability to write laws. As the Wall Street Journal notes:
Most domestic policies don’t cover anything more than emergency care overseas.
Nevertheless, the law as written requires U.S. citizens resident in Italy or New Zealand to buy U.S. health insurance that won’t cover them for any illness that might befall them where they actually live. It’s outrageous enough that the IRS (unlike equivalent revenue agencies in London, Paris, Berlin, Tokyo, Canberra, etc.) claims global jurisdiction. For Obamacare to claim global jurisdiction is just insane.
So, recognizing that it’s too nutso even for them, the IRS has decided not to apply the law. This is another consequence of the degeneration of America’s legislative capacity. We are increasingly ruled not by law but by the whims and caprices of the regulators. This is not a state of affairs conducive to healthy government.
One final point: The IRS is issuing its waiver because it takes it as read that U.S. citizens overseas, wherever they reside, have health-care arrangements in place. The underlying assumption is that the rest of the planet already has universal coverage, or, at any rate, that wherever you reside — Sweden, Slovenia, Sudan, Waziristan — you live somewhere whose health system is less crazy than here.