The Affordable Care Act requires that all US taxpayers have health care that provides minimum essential coverage (MEC) after the 2013 calendar year. If a US taxpayer does not have the required MEC, the US taxpayer will be assessed a penalty for each month they do not have the required coverage.

Most US taxpayers living outside the the country will be treated as having the MEC by virtue of their residence outside of the US. A US taxpayer living abroad will be treated as having the MEC if they qualify for the foreign earned income exclusion as a bona fide resident of a foreign country, or if he has resided outside the US for 330 days of any twelve month period under 26 USC §911(d)(1).

US taxpayers moving abroad will need to remember that the penalty for not having the MEC is calculated on a monthly basis. To avoid penalty, they will need to make sure they will qualify under 26 USC §911(d)(1) for all of the months they are abroad, or otherwise have insurance that provides the MEC.