ACA Health Insurance: Understanding Residency Requirements

In the health insurance marketplace, residency plays a crucial role in determining your eligibility and premiums. This blog delves into the intricacies of residency requirements for ACA (Affordable Care Act) policies, inspired by a recent post.

Key Considerations for Residency

When determining your residency for ACA purposes, the following factors are considered:

Domicile: Your permanent home address, where you intend to reside indefinitely.
Physical Presence: The location where you physically reside for the majority of the year.
Tax Residence: The state where you file your taxes and pay state income taxes.

Residency for ACA Policies

To maintain your ACA policy, you must meet specific residency requirements. Generally, you must be a resident of the state in which you apply for the policy. This means having a permanent address, paying taxes, and maintaining a physical presence in the state.

Example Case:

Like the individual in the post, you may question your residency status while living and working overseas. As the post suggests, regardless of your physical presence abroad, you may still be considered a resident of North Carolina for ACA purposes if you:

Have a permanent address in North Carolina
File your taxes as a North Carolina resident
Declare North Carolina as your domicile

Maintaining ACA Coverage While Abroad

If you will be working overseas as a 1099 contractor, you may be eligible to maintain your ACA policy under the following conditions:

Your overseas stay does not exceed 330 days per calendar year
You maintain a permanent address in the United States
You continue to pay taxes in the United States

Maximizing ACA Tax Credits

To reduce your AGI (Adjusted Gross Income) and qualify for ACA tax credits, you can consider contributing to a SEP IRA (Simplified Employee Pension). However, it’s important to note that you must meet specific eligibility criteria and consult with a tax professional to ensure that this strategy is right for your individual circumstances.


Understanding ACA residency requirements is essential for maintaining your health insurance coverage and maximizing tax benefits. If you have questions or need further guidance, it’s always recommended to consult with a licensed health insurance agent for personalized advice.

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