If you are thinking about living overseas you need to consider two very important factors: health insurance and taxes. Getting a handle on what to expect from both will help you better prepare for your new life in a new country.
Here are some things you may not have thought of, but should consider with health insurance and taxes before you finalize your moving plans:
HEALTH INSURANCE: Even though you may be moving to a country that provides Socialized Medicine, it doesn’t mean that you will automatically qualify for it. Those types of programs are typically reserved for citizens of the country so you will more than likely have to have your own health insurance upon moving to a new country.
You will need to obtain international health coverage and some of the considerations with this are:
Step 1
In-patient treatment claims: Does your provider offer direct settlement?
Step 2
Out-patient claims: If claims are settled through reimbursement, find out how long it will take.
Step 3
Emergency evacuation and repatriation: Some providers will pay for your evacuation, but will not reimburse you for your airfare when you return to your country of residence. Some plans are more comprehensive and will offer to pay for evacuation, your return flight, and accommodations for your dependants during the whole process. You have to be sure to read the fine print on this point to ensure you are getting the best coverage possible.
Step 4
Chronic conditions: Some policies will not cover all chronic conditions and some will exclude them all together. If these are a concern to you, then you need to have it all spelled out before you decide on a policy.
TAXES: As a United States Citizen who is living abroad, you may have heard that you no longer have to pay taxes in to the US. Wrong! The United States currently has tax treaties with over 42 countries worldwide. Both the US IRS and foreign taxing authorities can exchange information on citizens living in a different country. The IRS will typically have agents that are part of each country's US Embassy whose job it is to specifically help US citizens living within the country to properly file their taxes. Even spookier, most Embassies also have special agents whose job it is to seek out any US Citizens who are not properly paying their US taxes.
In order to avoid any double taxation form occurring, the tax treaties contain many provisions that benefit US Citizens. There is a foreign tax credit that can be claimed that reflects the amounts you are paying on your foreign tax return and this credit will typically offset your US tax that is owed, but you can’t get the credit if you don’t file your US tax return.
Of course the best way to handle both situations is to seek the help of professionals, but when doing so be sure that they have a vast knowledge and understanding of the different nuances associated with living overseas.
Living overseas can truly be your dream come true and a culmination of a lifetime of hard work. Just be sure that your dream doesn’t turn into a nightmare and do your best to be prepared beforehand on both the health insurance and tax fronts.
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