This communique is to provide those crew who are U.S. citizens with some important and timely information about the U.S. Patient Protection and Affordable Care Act, also known as Obamacare or the ACA.
First, despite the political rancor in the U.S. media, the ACA immensely improves the flexibility and increases the options for protecting the health needs of U.S. crew. The ACA is the most crucial advancement for U.S. crew in more than 20 years. It actually enhances their value as crew.
Based upon vicarious real-life situations, numerous examples of threatening scenarios could be presented. But the following three sketches should illustrate why the ACA is a godsend for U.S. crew and their employers.
Maternity: What happens when, in the euphemistic sense, the “rabbit dies” unexpectedly? Maybe there is no “accident” here, but instead the wonderful next step in the life cycle. Either way, prior to ACA, a prudent couple would often have to begin procuring adequate maternity coverage two or three years in advance. For those who didn’t, the potential financial and emotional perils could become devastating.
Hernia: Such an affliction can easily occur, even to muscle-clad mates. But timely, remedial medical attention may have been deferred for various reasons; for example, fear about pre-existing exclusions stemming from hop-scotch insurance coverages. (In this instance, insurance premiums were being paid, but the coverage collapsed due to the unavoidable modus operandi of the yachting industry.)
Annual female “physicals”: Routine feminine exams occasionally produce uncertain results, or situations that may appear to be of medical concern. Then, the underwriting (U/W) challenge begins with a re-exam, usually requiring personal money for payment of the additional test. Then, the U/W scenario might deteriorate further. For example, what if there is indeed something worrisome lurking? Fuhgeddaboudit, unless she’s obtained what is called Guaranteed Issue coverage.
In summary, in most instances with ACA, the spate of serious worries and nettlesome hassles are over for U.S. crew due to guaranteed issue and no pre-existing condition exclusions. Now, it is time for the yachting insurance industry to establish similar protections for non-U.S. crew.
Second, neither the vessel nor the owner of non-U.S.-flagged vessels are affected by the ACA directly. No changes are necessary from the vessel’s standpoint. Expatriate (expat) plans, which may already be in effect, remain in force. The same insurance coverages applicable before or during the onset of ACA are still effective for all crew, including U.S.
Third, through the individual mandate, the ACA requires that U.S. citizens subscribe to health insurance plans that contain what the law designates as “minimum essential benefits”. Failure to comply within the specified time period (i.e. March 31, 2014) exposes all U.S. citizens — not just professional yacht crew — to financial penalties payable to the U.S. Internal Revenue Service. The extent of the possible financial impacts depends heavily upon personal financial matters and circumstances. The penalties could be substantial or comparatively nil. Evaluate your own circumstances. Some suggested questions and analytical aspects are listed in the URL referenced at the conclusion.
However, the ACA does provide some relief in the form of exemptions. Additional discussion of those key factors are also in the URL referenced at the conclusion.
The ACA does not require purchasing coverage through Obamacare exchanges. ACA-compliant coverages for 2014 are available in the private health insurance marketplace. However, the government subsidies, if applicable, for paying the premium are only available through the Obamacare exchange marketplaces. Most crew members are likely to earn too much income for subsidies of any note, but some junior crew may qualify for partial subsidies.
Fourth, these circumstances are complex because the plans complying with the ACA do not provide certain niche coverages that are important to sea-going professional yacht crew. Yet, unfortunately, the expat plans have not, and are not expected, to construct plan-designs offering “minimum essential benefits”, even though some expat purveyors assert they offer “comprehensive” coverage from offshore insurers. Compare their gaping holes with the “minimum essential benefits” of ACA.
Fifth, please do not presume that the ACA coverages are inappropriate. Indeed, depending upon your typical international travel itinerary, it may be feasible to supplement your foreign travel coverage itself, while you and/or your family enjoy actually having reliable “minimum essential benefits” at home.
In conclusion, many crew who are U.S. citizens presently insured under expat or other individual health insurance plans should be able to garner a dispensation from compliance with the mandate of the “shared responsibility” tax/penalty in 2014.
However, a pro-active posture is strongly recommended. For U.S. crew without in-force coverage, consult an agent as soon as possible. And for more information about trying to secure either a dispensation or an exemption from the “shared responsibility” tax/penalty fee, refer to www.obamacareexchanges.com/yachtcrew, or e-mail the author.
One last note: On Nov. 15, President Obama granted, in effect, a one-year reprieve for making the transition from in-force individual insurance contracts to the new ACA coverages. Therefore, yacht crew who currently have an expat plan, retain it for 2014, at least, and maybe longer.
These volatile political issues are in a state of flux. We’ll continue to monitor them for shifting changes in government policy or further clarifying information.
Chuck Bortell is an insurance agent with Crew Insurance Associates and specializes in insurance for yacht crew, both American and not. Contact him through firstname.lastname@example.org.