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I got health insurance for my wife and son. They are traveling to India for 3 months.

If I cancel their insurance coverage, and apply for insurance once they came back in October, will I get a penalty for not having insurance for 3 months?

If I get a penalty, how much it will be?

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    What is your citizenship status, and your wife and son's? Are you a US citizen, permanent resident, nonpermanent resident? If you're here on a visa, what kind?
    – Joe
    May 31, 2017 at 19:41
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    Be sure that you have a guarantee of health coverage (without proof of insurability) at the same rate when your wife and child return to the US. Else canceling healthcare coverage for three months and finding that coverage is more expensive for the remaining four months of 2017 might be a case of penny wise and pound foolish behavior.
    – Dilip Sarwate
    May 31, 2017 at 20:13
  • @Joe my wife and son are on H4 visa. I am on H1.
    – Nilesh
    May 31, 2017 at 21:07
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    What the law is after is that they are covered. Most civilized countries have single-payer insurance to cover their own citizens while home. That should meet ACA's mandate, question is how you do the paperwork to prove it.
    – Harper - Reinstate Monica
    May 31, 2017 at 21:17

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In general, there are some exemptions that may apply to your situation, but may not, depending on the exact specifics.

In particular the two exemptions that seem relevant:

  1. If your wife and son are resident aliens, they may qualify for a resident alien exemption. They would need to be bona fide residents of India, or some other country, for the full tax year, or spend 330 days in any 12 month period there. (India does have a tax treaty with the US including a nondiscrimination clause, by the way.) It doesn't sound like this qualifies though as they're only out for 3 months.
  2. If they're not covered for a two month period, then they qualify for the short gap exemption. This is only a two month period though, if they're uncovered for three months you'd owe the penalty for all three months. So you could consider cancelling for two of the three months only, but three months wouldn't do.

I'm not including the "if you are here illegally" exemption, as I'm assuming you are here legally, but if you're not - that's also a reason to claim an exemption.

You can look at the full list of exemptions to see if you qualify for any others, as well.

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    It's also probably worth noting, though not explicitly asked, that it may or may not be possible to cancel and then re-acquire insurance just because your family is out of the country. They may not qualify for a SEP (special enrollment period); I would highly recommend verifying that they do before considering such an action.
    – Joe
    May 31, 2017 at 21:15

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