Considering a sailing adventure to Mexico? Just look at how engrossed that guy is in the book! Grab a copy of the Unauthorized Guide to Sailing in Mexico, and you too can find yourself sitting on a Mexican dock with an oversized (but very attractive) hat.

Unauthorized Guide to Sailing in Mexico

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Entries in regulations (5)

Saturday
Sep282013

the affordable care act (obamacare) and cruising sailors

Lyra seeing the doctor in Loreto, Baja Sur, Mexico.If you're an American citizen the Patient Protection and Affordable Care Act (PPACA or Obamacare) affects you. If you're a sailor heading to far off locales or residing in foreign lands for prolonged periods of time, your interaction with the PPACA is going to get interesting.

As a full disclaimer, I work in the insurance space but am not acting as an agent or providing personal counsel. I'll source everything directly; you can read the details yourself. This legislation is also evolving so look for updates. In fact the law is changing so rapidly that I urge you to view the real Code of Federal Regulations (CFR) viewer on ECFR.gov. In researching this article I found several out of date CFR's from sources as reputable as Cornell Law and CFRRegsToday. Cornell at least notes that there are updates not reflected in their texts.

Q. I'm sailing outside the United States, do I need health care insurance even though I'm not in the USA? Come on bro, I don't need insurance, do I?

Basically, by January 1, 2014, almost every American citizen requires health insurance that meets certain standards ("minimum essential coverage"). The IRS has listed a few exemptions from the PPACA, criteria that if you match, you do not need to have insurance. Two of these exemptions are relevant to many long distance sailors: the 330 rule and the no-filing-requirement rule.

Q. What's the 330 rule?

The IRS has had the Foreign Earned Income Exclusion (FEIE) for a while, which basically lets you exclude up to ~$90K of income every year from federal taxation. To qualify, the IRS has a Physical Presence Test to verify that you spent 330 or more days of the year outside the United States.

Why this matters is that the IRS is using the same logic to determine if you are exempt from the PPACA's individual mandate

There are a lot of variables to the physical presence test, so consult IRS Pub 54 for more information. In short, if you qualify for the FEIE, you are excluded from the PPACA's individual mandate.

Charlotte getting a checkup and sonogram in Ensenada, Baja, Mexico.

Q. But bro, the requirements and realities of medical coverage are completely disjointed. In some places there aren't even medical services, and even just the definition of preventive coverage is different.

The Departments of Labor, Health and Human Services, and Treasury (noted as "The Departments") have joined together to address problems with the PPACA, including its enforcement to expatriates. To that end, there is a smidgen of wiggle room because they are still working on it. New legislation will come into play by January 1, 2015, and until then you'll see the 2014 year marked as the "temporary transitional period."

Q. I'm on Medicare Part A, Medicare Advantage, or a Medicade plan. Do I need to buy coverage?

No. Medicare Part A and Medicare Advantage provide "minimum essential coverage", and most Medicade plans do but you'll need to check specifically on your plan provider's website.

Q. Well I still need insurance, what kind of insurance do I need to have then?

If you're covered under Medicare Part A, Medicare Advantage, or most Medicaid plans you don't need to do anything. All of those, and typical employee (or self) provided health insurance plans provide"minimum essential coverage". These coverages are sufficient through the 2014 temporary transitional period and onward through 2015.

Note: this does not include "self insured plans" where you just squirrel away money in an account and call that a medical insurance plan.

This however is of little help to people who meet the following conditions:

If that's you, starting in January 1, 2015 you'll need to have a PPACA compliant health care plan. Starting in January 1, 2014, you'll either need a USA plan that covers you when you travel internationally or you'll need an expatriate plan. The definition of an expatriate plan is as follows:

For purposes of this temporary transitional relief, an expatriate health plan is an insured group health plan with respect to which enrollment is limited to primary insureds who reside outside of their home country for at least six months of the plan year and any covered dependents, and its associated group health insurance coverage. 

So you'll need to read the specific plan details to see if your expatriate policy has the exclusion of it only being available to people outside their home country for six months.

Lyra's birth, Puerto Vallarta, Jalisco, Mexico.

Q. So wait, we saved up for a couple of years of cruising. We're not planning on working and if we do it will probably be under the table or just random non-reported income. Do we need to buy insurance?

Probably not. You can be exempt from the PPACA individual mandate for several reasons, one of which is if you don't make enough money that you need to file a tax return. Use the IRS's calculator to determine if you need to file a tax return, and if you don't, the PPACA individual mandate does not apply to you.

Working on a guy's boat or in a local bar for cash on the barrelhead is one thing, but take note of FATCA which now has many foreign governments reporting the transactions of US account holders directly to the IRS. 

Additionally, if you spend at least 330 days or more every year outside the USA, you meet the physical presence test, exempting you from the individual mandate via that mechanism.

Q. What is an expatriate health insurance plan?

Most "expatriate plans" (a.k.a. international plans) do not include coverage inside the USA, however most USA plans do include coverage abroad. The reason is simple: health costs in the USA are astronomical, usually to the tune of 7x the international average. A regular check up in San Diego might cost $100, as where in Mexico it can be $10.

Also note that nearly all expat plans, and USA plans rendered abroad, are reimbursement plans. You pay out of pocket and file a claim, to which you'll get paid back by the insurance company upon their review. Check the terms and notes in your policy as it will generally be quite different than what you may have experienced in an employee sponsored stateside plan. 

Whether you travel with a stateside or expat plan you'll need to keep your receipts, file claims, and take an active role in your insurance. 

Q. This all seems expensive, I'll just pay the ~$100/year per person penalty.

I'm sure many will but by 2016 it will be roughly ~$700/year per person getting pretty close to the cost of most health care plans. At that point you're spending a decent amount of money without getting anything from it.

Also note that for some countries, like France, if you want a long-term visitor visa you'll need proof of medical insurance (which has nothing to do with PPACA). So ignoring the law in the short term, forgetting about the value of medical insurance itself, is feasible, but as the years tick by you'll probably feel the squeeze. 

Q. What are my options and where can I get a policy that satisfies the 2014 year and then the 2015 year?

This is already a pretty dry blog post, but in a future one (soon) I'll review some some health care plans and discuss their details. 

If anyone has any comments, questions, or thinks there's a different interpretation of the laws please let me know.

Sunday
May292011

what i bring on a yacht delivery 

If you find yourself needing to move a boat from A to B, hopefully this video will be of some use to you when outfitting your kit.

Tuesday
Dec282010

a little word about risks - somali pirates

In conversation, on message boards, and in popular thought there are a few "risks" that people constantly bring up when it comes to sailing a boat around the globe. As a blanket statement, the commonality with which those risks are brought up is seriously out of sync with the frequency those risks actually occur. 

To a landlubber (not used pejoratively), it's simply an interesting quirk. But for the mariner intent on plowing the world's oceans these hyped up risks create a warped view of the situation and would have one losing focus of the true risks. Today we'll focus on one risk in particular.

Hyped-up risk: Somali Pirates

As a nation with a strong history in seafaring, it is no wonder that we are fascinated with pirates. One website catalogs over three hundred pirate movies (that's just English ones). We dress up as pirates for halloween, and one of the first prolonged sea campaigns the US Navy fought in was defeating pirates on the Barbary Coast between 1801-1805. Hell, we even fought pirates again in the somewhat-non-imaginatively named Second Barbary War in 1815. 

In short, piracy on the African coast is nothing new to America although it's fairly new to our time period. For all but the last few decades, the concept of being able to sail around the world with no risk of violence wherever you went would have been laughable. 

And other maritime risks still exist today. Sail your US (or pretty much any nation) flagged vessel up to North Korea and see what happens. Go to the Black Sea and hang out on the Russian coast and see just how much communism and corrupt officials are still present.

But beyond all of the dangers listed above, there lies one even greater that should be the core of your concerns: Somalia is roughly 10,000 nautical miles from San Diego. You'll need to cross the Pacific and Indian oceans, at their widest points, in order to get there. Quite frankly, consider yourself quite the mariner if find yourself in a position where you are seriously faced with the conundrum of how to transit the Arabian Sea.

To even get to that part of the globe, beyond spending roughly 85 days underway (three to four weeks of that consecutive crossing the Pacific), you'll have dodged at least one hurricane belt, navigated uncharted reefs, gone through numerous gales and squalls, and figured out how to repair your boat in far off and distant lands.

To make the situation even more clear over 17,000 vessels transited the Suez Canal during 2009. There were 324 attacks that same year, of which the vast majority were towards commercial shipping. Only two, yes two (as in the number 2) private yachts were seized. This yields a roughly 0.0004% chance.

To the two crews who were captured, I'm sure the low odds of it happening are a small condolence. But the fact remains that as a mariner you have to prepare your boat and crew for risks, in descending order, starting by that which can get you killed and happens most often.

Your landlubbing counterparts are not going to bring up the risk of dismasting due to an accidental gybe that also manages to deliver a severe concussion to someone on its way around. But both of those incidents happen with alarming frequency, but they don't make it onto the front page of CNN.

So to anyone drowning in a sea of "what if" scenarios, I humbly request that you simply spend more time at sea. You will be up to your ears in things to do that actually need to get done and you won't have as much time to sit around and dream up overstated risks when ones much nearer need to be addressed.

Monday
Oct252010

good bluewater boat insurance guy

I got a text message from my friend Ryan (who's still managing to have cell coverage off the coast of Mexico) who needed some Mexican liability insurance.

I tried a couple of online sources: no good. His boat is too vintage (1967 and made of wood) and the online places I called just weren't flexible enough. 

Then I got a lead on this guy:

George Lindley
619-222-2560
1110 Scott Street
San Diego, CA 92106

I walked out of there with a policy for Ryan that they were able to email him in under thirty minutes for a lower price than anything I saw online. Plus (and most importantly) George knows his boats and knows the boating world. I haven't talked to him about cruising insurance yet and what the options are for that, but if you're looking for someone to contact give him a try. And he has two cute dogs that run around the office as well! 

Saturday
Sep042010

back to the captain's exam process

My Study PartnerI've had an on-again-off-again relationship with the captain's license (OUPV 100 ton) process. By its nature it's not supposed to be easy and there are a lot of barriers to entry. Sea time, book knowledge, practical ability, physicals, paperwork, time, and of course an endless string of fees.

On Friday I went and got my Transportation Worker Identity Credential, or got my picture taken for it anyway. I've filled out my sea time forms, got a bead on a place that can provide the physical, and have been slowly but surely amassing all the paperwork.

I'd like to try to take the test before the end of October. It's nice to pick a date or else things never get done. 

Every day is a day to chisel away at the COLREGS (Rules of the Road), but tonight was also weather, which I honestly find pretty interesting. I forget a lot of it during the summer because the Pacific High keeps everything away from us, but this winter I'll be paying more attention to the clouds, pressure, wind veers (and backs), and precursors that accompany cold fronts, warm fronts, and occluded fronts. And don't get me started on Buy's Ballot's Law.