International Students: What Does Affordable Care Act (ACA) Compliant Mean?

In recent years, there have been notable changes in health insurance policies for international students, with many educational institutions now mandating the purchase of Affordable Care Act (ACA)-compliant insurance. While these plans offer enhanced coverage, they also come with the drawback of increased costs. To keep our members informed about these developments, we provide an updated overview of ACA requirements and their impact on international students.

Understanding the Affordable Care Act (ACA)

The Patient Protection and Affordable Care Act (ACA), commonly known as Obamacare, became U.S. law in 2010. It stipulates that individuals must maintain "minimum essential healthcare coverage," and failure to do so may result in fines imposed by the Internal Revenue Service (IRS) during tax payments. The primary goal of the ACA is to make healthcare more affordable by reducing costs for those who may struggle to afford it.

For more information visit the U.S. Department of Health and Human Services website.

Is it Mandatory for International Student to Purchase an ACA-Compliant Plan?

The individual mandate, which previously required individuals without employer or public insurance coverage to obtain an ACA-compliant policy or face tax penalties, has evolved. Since January 2019, most states no longer penalize individuals for being uninsured. However, specific states such as New Jersey, California, Rhode Island, Massachusetts, and Washington, D.C., have retained individual mandates with penalties for non-compliance.

International students, typically exempt from the ACA as non-residents, may still be required to purchase an ACA plan due to their school’s health insurance requirements.

Do International Students Have a Health Insurance Mandate?

The IRS stipulates that international students must be considered Resident Aliens for tax purposes to enforce a health insurance mandate. This tax status is distinct from immigration status.

Uncertain about your tax status? The IRS provides resources to help determine your tax status:

• For foreign students/scholars
• Exempt Individual - Who is a student?
• Exempt Individuals - Teachers or Trainees
• Substantial Presence Test

When are International Students Required to Get an ACA-Compliant Plan?

International students temporarily in the U.S. on F, J, M, or Q visas, studying at qualifying institutions, are exempt from the Individual Mandate. However, if their school's insurance waiver requirements align with ACA standards, they must purchase an ACA plan.

For the first five years with an F, J, M, or Q visa, individuals are considered non-resident aliens and are exempt from the mandate. After residing in the U.S. for five years, this exemption no longer applies.

If you are no longer an Exempt Individual, you may visit HealthCare.gov to select a plan that is most appropriate for you. Or you may consult with a tax advisor, in order to avoid being penalized when filing taxes.

Importance of Health Insurance

Even though you are not required to purchase an ACA-Compliant plan, we highly recommend to still purchase health insurance!

As health care costs in the U.S. continue to increase, an illness, injury, or other major medical need can result in a major financial burden if you do not have health insurance. Over 112 million individuals in the U.S. struggle with medical bills, having health insurance protects your financial future, immigration status, and most importantly your health. Even if your school doesn’t require it, it’s important to be covered.

As a non-U.S. citizen, you are eligible to our plans. Full time international students are able to purchase an affordable alternative plan that meets their school’s waiver requirements. Once you graduate and your visa status changes to OPT, you will still be eligible to our insurance plans for OPT. For J1 visa holders, we offer the J1 Exchange plans and for F2/J2 visa holders, we offer the Voyager plan that meet all the U.S. Department of State regulations. Visit our website for more plan options and detailed plan benefits.