Expats and Obamacare for los Idiotas

“Everyone should have health insurance? I say everyone should have health care. I’m not selling insurance.” ― Dennis Kucinich

A blogging friend from Ecuador recently wrote a post asking many questions about expats and Obamacare.  The second phase of the Affordable Health Care Act will start on January 1, 2014 requiring all USA citizens to buy health insurance. But, how will this effect expats living abroad?

Did you ever try to decipher the IRS tax code? The statute states that there’s an exemption for USA citizens living overseas tied to Section 911. The Secretary of Health and Human Services cannot override it, though the Treasury Department can issue regulations interpreting it.

“Any applicable individual shall be treated as having minimum essential coverage for any month . . . if such month occurs during any period described in subparagraph (A) or ( B ) of section 911(d)(1) which is applicable to the individual.” IRC Sec. 5000A(f)(4)(A).

HUH???  Or this….

“The term “tax home” means, with respect to any individual, such individual’s home for purposes of section 162 (a)(2) (relating to traveling expenses while away from home). An individual shall not be treated as having a tax home in a foreign country for any period for which his abode is within the United States.”

So, for expats, like us, I have written an idiot’s guide ( mainly for me..a dummy when it comes to legal terms) for expats and Obamacare. Of course, it’s all based on my interpretation of the law, which really means..it’s a jungle of legal jargon in section 911 open to anyone’s interpretation.

Who has to buy the mandated insurance?

In the new Internal Revenue Service (IRS) tax code, expats are treated as if they have health insurance regardless of whether they do or not. So, it looks like expats don’t have to buy insurance or pay a penalty for not purchasing insurance.  But there’s a catch…there’s always a catch.

What is the IRS foreign earned income exclusion?

How does the IRS decide if USA expats (I refuse to use the word “American’ because everyone living in North or South America is an American) are exempt from the insurance mandate? Enter the IRS’ definition for foreign earned income exclusion.

In order for USA expats to be exempt from the insurance mandate, they must already be eligible for the IRS’ foreign earned income exclusion. Now, I know why we were asked 4 questions on our income tax return about how long we have lived abroad ( I’ll come back to this later, because it is a touchy subject for some expats).

In order to meet the criteria for the exclusion that allows U.S. expats to avoid paying U.S. taxes on their first U.S. $91,500 worth of income, the expatriate must have a tax home (the general area of your main place of business or employment where you happen to be permanently or indefinitely engaged) in a foreign country, as well as be either a legitimate resident in that country, or spend at least 330 days a year outside the United States.

Since we are legal residents of Nicaragua and spend at least 330 days a year outside of the USA, we are eligible for the IRS’ foreign earned income exclusion. If we are asked to prove it, we can simply scan a copy of our residency ID cards and send the IRS a fax.

What is a tax home?

When it comes to the tax penalty for not having health insurance, the legislation borrowed the test from the Section 911 Earned Income Exclusion: tax home overseas, plus either 330 out of 365 days overseas presence or legal foreign residency. Thus, if one qualifies for the earned income exclusion one doesn’t have to worry about having U.S. health insurance.  “Tax home” is a concept that applies awkwardly to retirees, since it’s a requirement intended for those who are working and earning income.

Because we are retired, we may have to use our Nicaraguan address on our income tax forms. That should be a good for a couple of laughs: 300 meters south of Puesta del Sol, on the beach in La Paloma, across from where the giant Ceiba tree fell down 3 years ago, but is no longer visible, 2 kilometers from the port town of Moyogalpa, on the island of Ometepe, in Nicaragua.

What about Medicare? Does that count for insurance?

For USA expats 65 and over, Medicare qualifies as required insurance coverage. Although, medicare coverage can ONLY be used within the U.S. boundaries. It cannot be used abroad.   Retired U.S. Military have TRICARE which qualifies as the required insurance coverage. Other retired expats may have insurance plans included in their retirement plans that qualify. They are insured. The law goes after the uninsured residing in the USA.

Problems expats may encounter

1. What if I don’t want the U.S. government to know I’m living abroad?
From my understanding of the law and in filing an income tax return, you will be faced with a difficult decision. Either you tell the IRS you are living abroad for at least 330 days,  pay the $95 penalty (which will increase every year), or don’t file an income tax return.
I’m not aware of any other choices.

2. What if I live abroad less than 330 days?
This is a problem, and I’m not sure what the IRS will do about this. If you split your time abroad and in the states, you will either have to buy health insurance or pay the penalty. The problem is that health insurers will continue to offer insurance only to residents of a particular state, since rates will vary geographically. If you’re not a resident of a U.S. state within the meaning of an insurance policy, you’re not going to be able to get insurance. And if you do claim residency on a questionable basis, the insurer can deny your claims. There is no meshing between the tax penalty and the insurance policy requirements. It’s impossible to get health insurance for a 2 or 3 month visit back to the states.

If there’s any message in the health care act — and in the legislative process that produced the act — it’s that the insurance companies are in control.

Now more than ever.

Other resources:

1. Nancy’s blog post that started me on my quest. Obamacare and the Expat

2. U.S. Tax Code, section 911 document

3. Obamacare and Americans Living Abroad





Weekly Photo Challenge: Behind the Masterpiece

“Make your lives a masterpiece, you only get one canvas.”
― E.A. Bucchianeri, Brushstrokes of a Gadfly

My life’s masterpiece is a colorful mixture of paints and a work in progress.

IMG_3787My heart is my paintbrush. The entire universe is my canvas.
IMG_3786I am learning to let go…to defy gravity…to dare ecstasy…to fly by the seat of my paint covered pants.
IMG_3796I want to blaze my own trail… to transcend what people tell me is impossible…to learn from my failures.
IMG_3798Each of us creates a unique signature of our lives.
IMG_3907 One small part of the masterpiece of my life hangs above my kitchen wall, created with radical curiosities, a loving friend, laughter, contemplation, and tranquility in our troubled world.
IMG_3277What does the masterpiece of your life look like behind the scenes?

Timeout for Art: A Species of Writing

This week’s Timeout for Art asks us to reflect on art as a form of therapy, as well as a stress reducer. As a former counselor and special education teacher, I often used art therapy with my students.

“Art can permeate the very deepest part of us, where no words exist.”
― Eileen Miller, The Girl Who Spoke with Pictures: Autism Through Art

I was drawing tortugas (turtles) on my curtains for the Turtle cabin (Las Tortugas Casita), when my ten-year old friend, Lauren, stopped by our house on her bicycle. Ron was taking his Spanish lessons on the side porch. As I waited for my turn, Lauren and I tried to talk, but she spoke so rapidly that I had a difficult time understanding what she was saying. So, I asked her to draw it.
IMG_3253One thing I’ve learned about children in Nicaragua, is that they can’t quite figure out why we don’t understand them. I often wonder if our two and three-year old neighbors think we are just plain stupid. I think Lauren understands that Spanish is our second language, but she gets frustrated and rolls her eyes when I ask her to repeat the sentence just one more time…y mas despacio por favor (slower, please).

Lauren rolled her eyes, and tried to describe a sparkly thing that sits on top of a King or Queen’s head. “You know…YOU KNOW,” she said, “Una corona. UNA CORONA.” After I looked at her picture, the puzzling Spanish pieces fell into place.
IMG_3264“You are my best friend among all my friends,” Lauren said. “That’s why I gave you a crown.” Ahhh..how sweet, I thought. “Now, can we make cookies?” she asked. Hmmm, I knew there was an ulterior motive. “Lo siento, mi amor,” I responded. It’s almost time for my Spanish lesson and I need to buy more chocolate chips.  Art can be used where no words exist…too bad I ran out of chocolate chips, though. 🙂

“Talking about Art is like trying to French kiss over the telephone”. ~Terry Allen

I had just started my Spanish lesson, and Lauren and Ron were blissfully drawing in my place, when Carlos, the local artist arrived. “Patricia said you wanted to see some of my paintings,” he said. I was thinking about starting an art class at my house and interested in looking for a good instructor.
IMG_3258Carlos has over 30 years of experience as an artist.
IMG_3255IMG_3260Attempting to talk about art was like trying to French kiss over the phone. I needed to see it, feel it, and touch it. I’m still not sure that Carlos and I will be a good match. Communication will be difficult, but his art revealed his love for Nicaragua. He’s very talented and his personality shined through his paintings.

“Art is communication.”~Madeleine L’Engle, Walking on Water: Reflections on Faith and Art

IMG_3261 Living in Nicaragua with Spanish as my second language has convinced me that art is communication. Art reveals personalities, reduces stress, and sometimes even persuades me to make chocolate chip cookies for my favorite ten-year old.

Timeout for Art: Walk First (At a Turtle’s Pace)

Lisa, of Zeebra Designs and Destinations, posted a quote by Don Getz who said, “Learning to draw before you paint, is like learning to walk before you run.” How true! But, I am going at a turtle’s pace…slow and steady. My Casita de Tortugas needs some new turtle paintings, so I unpacked my paints and brushes for a new challenge.

Marvin and I designed a turtle out of my Pre-Columbian pottery shards and plastered it above the door of the casita last year.
IMG_1096When Marvin’s daughter, Lauren, came to visit, we opened a new box of permanent markers and drew turtles on the curtain, which hangs on the front door. I discovered that both Lauren and her father are very talented.
IMG_2585The finished entrance! What do you think?
IMG_2592Since we are moving the bedroom downstairs, and my new art studio will be upstairs, I am enjoying decorating the Casita de Tortugas. Yesterday, I started painting a turtle to hang on the bedroom wall.
IMG_3249Today, I finished the turtle…I think. I used a metallic copper paint to embellish some of the turtle scales, but it doesn’t show up in the picture. Hmm..maybe I’ll add just a few more highlights. So, Lisa…I have a question. Once it is done to my satisfaction..since I’m working at a turtle’s pace…what do I put over the paint to protect it? Or do I need to put a finish over it?
IMG_3252Next, we’re painting the casita walls a soft golden color. Ron’s creating shutters for the windows out of PVC pipes and I’m covering them with canvas. Of course, I’ll be painting some turtles on the canvas, too. I’m moving at a turtle’s pace, but, hey…I’m retired…no deadlines..no worries…and no stress. Life is good, retirement is better, living abroad is priceless.



Weekly Photo Challenge: Smokin’ Fresh

Ometepe Island, Nicaragua has enticed cigar makers with its sweet and uniquely spicy tobacco for over a decade. Even among the well-known tobacco-growing regions of Nicaragua, where the black soil of Esteli yields strong tobaccos, the rocky soils of Condega produce a middle-range flavor, and the red clay of Jalapa provides the smooth wrapper tobaccos…Ometepe Island’s tobacco is fresh and new.

IMG_3222“Ometepe is unique,” says Plasencia Jr., a trained agronomist. “It’s a small area, with two volcanoes. The drainage is very good. There aren’t too many places in the world where you can find this.” The soil on Ometepe is so rich that it doesn’t need much fertilization. The surrounding fresh water from the sweet sea provides abundant humidity…perfect for growing tobacco.

IMG_3223The rich soil gives the tobacco grown here a rich earthy taste. Farmers call the soil, “Como pastel.” ( like cake) The tobacco is dulce y fuerte (sweet and strong).

IMG_3224If you would like to read more about the history of Nicaraguan tobacco, this is a great place to start. Nicaraguan Cigars.


The School for the Deaf on Ometepe Island

Yesterday, I visited the school for the deaf in San José del Sur on Ometepe Island to see if they would be interested in participating in my mobile lending library project. Helping Hands with Hearts for Christ (H3C), was founded by Mike and Joan Vilasi three years ago. While they are in the states, Gael and Rosemary manage the school.

I  interviewed the gracious host, Gael, and asked about the history of the school.
IMG_3193I had a difficult time finding the school because it was tucked into a small cove on the beach with a lush walking trail leading to the school from the main road. “The next time you get lost,” Gael said, “just ask for Quincho Baraletta.” “This used to be an orphanage for girls, but when Volcano Concepcion erupted three years ago, the orphanages abandoned the island for the safety of the mainland.” This made sense to me because Nicaraguans  either use landmarks that disappeared years ago, or refer to a place by a previous name.

My blog friend, Tamara, shows off the beautiful flower- lined lane at the school.

My blog friend, Tamara, shows off the beautiful flowery lane at the school.

H3C new banner hanging above the entryway.

H3C new banner hanging above the entryway.

There are 37 deaf people living on Ometepe Island. Twelve children are school aged and attend H3C. A few of the children attend schools for the deaf on the mainland. Before the school opened, most of these children received no services and did not attend public school. Now, thanks to the generosity of The North Point Community Church in Maine, USA, they receive donations to run the school.

“Kindness, a language deaf people can hear and blind see. “- Mark Twain


The school has two full-time teachers and an interpreter. The nicest surprise was that one of the teachers is my neighbor in La Paloma. Who knew?


“Signs are to eyes what words are to ears.” ~ Ken Glickman

The teachers at the H3C school.

Nicaragua has a unique sign language developed by the deaf children themselves. The video below explains how the Nicaraguan Sign Language began. I am returning to the school next week to deliver my lending library books. It’s awesome to be able to share my love of reading with this school.

How can you help? Visit Helping Hands with Hearts for Christ

Other resources:
1. Deaf Children in Nicaragua Teach Scientists About Language
2. The History of Nicaraguan Sign Language
3. Mayflower Medical Outreach in Nicaragua
4. The Deaf People of Nicaragua Electronic survey report


Strange Habits I’ve Picked Up

Living in Nicaragua, I’ve picked up some strange habits…at least to me they are strange, but to all Nicaraguans, they are quite normal.

1. Strange gestures
a. The Lip Point  In the states, we use our fingers to point. Nicaraguans use their lips. Lip pointing requires puckering up like you are going to kiss someone, and redirecting the pucker toward a person or an object you want to point out. Examples: That woman over there (lip point) is a monkey lady; I just saw a duende (lip point) climb that tree; That man (lip point) is loco.

b. The Finger Shake  I love this gesture and it really works. If you are eating at a restaurant and someone comes to your table for the hundredth time and tries to sell you a whistle, or pottery, or Flintstone vitamins, put your finger out in front of you and shake it back and forth. You can add an annoying facial gesture, too. It’s the Nicaraguan gesture for “No!” Examples: Give me un dollar.(Me: finger shake); Obnoxious drunk: Buy me a drink. (Me: finger shake + annoying facial gesture)

c. The Nose Scrunch This gesture means “I don’t know what the hell you are talking about.” I’ve gotten the nose scrunch repeatedly when I try to explain something in my Spanglish. To do this gesture effectively, scrunch your upper lip to your nose, like you smell a dead mouse. Examples: Me: Where can I buy polyurethane? Nica: (nose scrunch); Me: What’s the Spanish name for hemorrhoidal cream? Nica: (nose scrunch)

2. Feel guilty about flushing toilet paper down the toilet
Nicaraguan sewer systems leave a lot to be desired. The lines to the septic tanks are tiny and most places have a sign asking you to put your toilet paper in a garbage can instead of flushing it down the toilet. I think that is gross! Sometimes, the garbage cans overflow. Sometimes there are no garbage cans and worse yet, no toilet paper. I confess! I usually forget to throw the toilet paper in a garbage can. Instead, I flush it and always feel guilty.

3. Call people and hang up, so they can call you back.
This used to annoy me, until I discovered the purpose. It’s called cheap. When I check my minutes on my phone and I only have a few minutes left, but need to have a longer conversation, I’ll call someone, hang up, and hope that they call me back. That way, they can use their minutes to return my call. Everybody does it.

4. Move closer…personal space
My personal space in the states was much wider than in Nicaragua.  Nicaraguans like to get up close and personal. I mean so close that you can feel their breath on your face or your back depending on which direction you are facing. I’ve learned to get up close and personal, especially when standing in a line. Any extra space between you and another person is a personal invite for someone to squeeze in front of you.

5. Haggle all the time
Who knew that you can haggle for anything and everything in Nicaragua.  It’s expected behavior. If you don’t haggle, you’re a sucker for a gringo price.

6. Wear Flip-flops for all occasions
I never wore flip-flops in the states. But, in Nicaragua, I have flip-flops for every occasion. I have my going out to feed the chickens flip-flops, my inside the house flip-flops, my shower flip-flops, and my dress-up flip-flops.

7. Sleep in the middle of the day
This is my favorite strange habit. Siestas are a necessity in the tropics. The stores close at noon, the houses are eerily quiet, and everyone snoozes for an hour or more.

8. Be politically incorrect
I have friends whose nicknames are “Gordo” (fatty), Loca (crazy), and Gordita  (chubby). No one takes offense to these nicknames. It is an accepted way to identify someone. When I returned from the states last week, my neighbor called me Gordita because I usually pack on several extra pounds of good eats. I just laugh and say, “Es verdad.”
( That’s the truth.)

9. Ask, How much did it cost?
When I was in the states, I forgot about this strange habit I have and caught myself asking everyone, “How much did that cost?” Everyone asks that question in Nicaragua. Examples: My neighbor: “How much did those shoes cost? Me: Oh, they were cheap. I got them on sale. Another Nica friend: “How much did your TV cost? Me: Oh, it was cheap. I got it on sale.

10. Use AY to express anger and Ya to say you’re ready
AY. Who left the door open? YA, I’m ready to go. When Marvin erected our tall water tower, he would ask, “Listo?” Six strong men pulling on ropes would reply in unison, “YA!”
Dustin, our two-year old neighbor ate a magnet off my refrigerator. “AY!”, I responded. Poor baby. I scared him and he started to cry. But, at least he spit out my refrigerator magnet.

11. Applaud when the plane lands
   I caught myself clapping when our plane landed in Nicaragua. I remember the first time I heard a plane full of Nicaraguans applaud a landing. It was so funny! But, now it’s second nature for me to join in the applause.

12. Drink coconut water for every ailment.
Have diarrhea? Drink coconut water. Coming down with a cold? Drink coconut water. Tired? Yep! Coconut water does the trick. Nicaraguans say they have coconut water running through their veins. I believe them.

13. Iron…everything
When Ben Linder built a small hydroelectric plant for a rural village in Northern Nicaragua, he had to remind them constantly not to use their irons all at the same time or it would overload the system. Nicaraguans love their planchas. They can go without running water, a flush toilet, and a refrigerator, but they must have their irons. Now, I’ve picked up their strange habit of ironing everything. Maybe it is because the clothes never dry in the rainy season, and an iron helps to keep damp clothes from molding.

14. Shake shoes, towels, hammocks to kick out scorpions and spiders
I have become a constant shaker. I don’t think an explanation is necessary, especially after I describe the huge, hairy tarantula that I shook out of the hammock recently.

15. Always have the correct change and make sure the dollar bills are clean without any marks.
Before I left the states, I exchanged old, ink-stained, and slightly ripped dollar bills for new ones. No one in Nicaragua accepts dollar bills that have even a tiny mark or miniscule rip. I also made sure that I had small bills of córdobas for my trip back to Ometepe Island. Just try giving a Nicaraguan a 500 cordoba bill and asking for change. It ain’t gonna happen.

16. If someone asks for your address, use vivid directions including something that isn’t there anymore
There are no street names or house numbers in Nicaragua. Recently, I had to order a new remote control for my Sky TV. They are going to deliver it to my house. When they asked for directions, I responded, Two kilometers south of Moyogalpa, on the beach near where the giant tree fell down 3 years ago, in the community of La Paloma, past Puesta Del Sol.

You Know It’s the Rainy Season When….

1.   …the covers of your paperback books curl up.
2.   …your clothes hang on the line for a week and they’re still wet.
3.   …your solar lights refuse to charge due to lack of sunlight.
4.   …you put potpourri in all your drawers to cover up the mildewy smell.
5.   …your leather belts are covered with mold.
6.   …the fence posts surrounding the garden sprout and grow fruits.
7.   …thousands of creepy crawlers take refuge in your house because their nests have been washed out.
8.   …your flip-flops blow out because they get stuck in the mud.
9.   …the electricity flickers all day.
10. …the garden drowns and newly planted seeds wash away.
11. …the sunsets are spectacular because of the variety of rain clouds.
12. …you carry an umbrella everywhere.
13. …gully washers create giant crevices in the volcanic sand
14. …the sandy roads are much easier to travel because the sand is packed down.
15. …you can literally watch plants grow several inches overnight.
16. …the wandering horses, cows, and pigs are happy because they have something to eat that’s green.
17. …you can easily find out where your roof leaks.
18. …you can watch the lake rise daily.
19. …windshield wiper salesmen, who sell their rain gear at all the red lights, are ecstatic!
20. …you turn the TV volume up as high as it will go, and you still can’t hear a thing because of the pounding rain on the tin roof.
21. …the chickens get colds and sneeze.
22. …plastic bags, dirty diapers, and miscellaneous garbage floats and bobs down the streets.
23. …the machetes swing constantly cutting the grass.
24. …you get goosebumps and bundle up in a beach towel (because you don’t own a blanket).
25. …and my favorite…everything, I mean everything.. is a lush vibrant green (even things that aren’t supposed to turn green).

Happy rainy season to you all! I’m enjoying writing, reading, and drawing on this lovely rainy day in the tropics. What do you do on a rainy day?

Timeout for Art: Drawing

I just returned from the states…another long, strange adventure trying to get back to Nicaragua, but that’s a story for another post. I didn’t have time to draw this week, so I’m posting a pen sketch I did eight years ago. What makes this sketch so unique is that I found it in my old sketch pad, tucked between worn, moldy pages. I’m surprised that it survived the ravages of the tropics.

This was the first wedding we attended on Ometepe Island. I wanted to give Eric and Danellia a portrait, but I couldn’t capture the beauty of Danellia. Portraits are very difficult!

IMG_3183Below is the first pencil sketch I did for Timeout for Art…a sand dollar I found on the beach.

IMG_3185While in the states, I bought new sketch pads, pencils, and a few new watercolor brushes. We are remodeling our guest house and transforming the upstairs bedroom into my arts and crafts studio. It will be so nice to spread out my projects.

Timeout for Art is brought to you by: Zeebra Designs and Destinations. Check out the many talented artists on Lisa’s incredible blog.


Weekly Photo Challenge: The Golden Hour

“Bursts of gold on lavender melting into saffron. It’s the time of day when the sky looks like it has been spray-painted by a graffiti artist.”
― Mia Kirshner, I Live Here


The Golden Hour, where dusk or dawn is an illusion, for it is neither day or night.
Where golden hues link day and night and the sky is littered with tiny silver stars bathed in lavender puffs.
A dichotomy, where one cannot exist without the other, yet they cannot exist at the same time.
The Golden Hour on my enormous lake. I LIVE here.
clouds on OmetepeIMG_3281IMG_3282IMG_3358IMG_4954
Feel free to experience the Golden Hour through other WordPress bloggers’ photographs.