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How to ensure your health care coverage on both sides of the border

A visit to a U.S. hospital is made less traumatic for Canadian snowbirds if they have travel insurance. ‘When you leave Canada, your health coverage doesn’t follow you,’ one expert says.

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The accident in a Boston cab happened 15 or so years ago. The taxi was hit, and its Canadian passenger got a concussion and required 16 stitches.

Recalling the accident, Linda, who is now 72 and calls Montreal home, said the incident was just more proof that buying health insurance for her time in the United States is a must. She's a snowbird and lives part of the year in Florida and regularly visits Boston. "You have to be covered. You get separate insurance that says you're in the States. There's no question."

Yet behind that decision lies a complicated array of calculations affecting how long she and Canadian snowbirds like her can stay in the U.S. (often in the sunnier climes of the South) and yet still qualify for their home province's health coverage back in Canada.

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It's not just a matter of simply knowing their home province's length-of-residency rules for health coverage. It requires a dance of calculations also involving U.S. immigration and tax law. These all need to be factored in when figuring our how long to stay Stateside.

"The way you look at your time from an immigration perspective will differ from the way you look at it from a [U.S.] tax perspective. And then from a provincial health-coverage perspective as well, that will also be different," said Evan Rachkovsky, director of research and communication at the Canadian Snowbird Association, an advocacy group.

Even U.S. customs agents sometimes get it wrong, said one immigration attorney who works in both New York and Toronto.

But Linda in Montreal said there are a few key points snowbirds like her must remember. (She preferred not to use her full name when talking publicly about her immigration details. "I don't want to be famous," she said.)

According to Quebec health care limits, she can be away up to 182 days in a calendar year to qualify still for coverage at home.

Yet that's the easiest calculation. "One of the important points is from the perspective of the [U.S.] Internal Revenue Service, the IRS. A Canadian traveller who spends more than 120 days [a year] in the United States needs to file an IRS form called 8840."

The IRS considers a Canadian visitor eligible to pay U.S. tax if that person's stay exceeds 183 days in the States.

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Yet the IRS calculates 183 days over a three-year window. For instance, each day spent in the United States in the current year (say, 2015) is counted individually. However, days spent in the States in the previous year (2014) are each counted as one-third days. And days spent in the second previous year (2013) are counted as one-sixth days. That total cannot be 183 or more.

IRS form 8840 circumvents that. "The most important part of that document, which is two or three pages, is to say I spent 140 to 150 days in the States, but I'm a Canadian resident paying taxes in Canada," Linda said.

The point of this process is to declare your habitual abode. "It's where you regularly spend your time living," said Scott Larson, tax manager at Lohn Caulder in Vancouver, who specializes in U.S. and cross-border tax. "You could easily have a house in the U.S. and also travel extensively throughout the U.S., but still have your habitual abode in Canada, even if it is less than six months."

The final set of calculations involves U.S. immigration law. Here, the rules can easily seem vague and at the discretion of the border guard. As everyone knows who has received the stare-down at a border crossing, you have to prove you aren't doing something illegal.

"There is a presumption of illegal intent – in other words, a presumption to stay permanently is the way they operate it. They presume you're guilty until proven innocent," said Andy Semotiuk, a U.S. and Canadian immigration attorney who works both in between Toronto and New York and is at Pace Law Firm in Toronto.

That whole principle affects immigration law. Once allowed in, a Canadian visitor can stay in the States for six months (under what's known as a B2 tourist visa), assuming there aren't any other stipulations written next to the stamp in the visitor's passport. Mr. Semotiuk said that the visitor can then leave the States and return immediately. A new six-month period then comes into effect.

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"On entering the second time, you're run through the same issues in terms of the U.S. customs officials and their questions," Mr. Semotiuk said. Yet because of the U.S. tax issues, and because of the other factors from declaring Canadian residency and the desire to maintain Canadian health coverage, a border guard may think that a person returning to the United States for another six months so soon seems suspicious. At the least, the guard may think the snowbird should have an extended visa rather than a simple tourist stamp in the passport.

Consequently, "at the border, there seems to be almost a custom developing that the total period of stay in the United States is limited only to six months. As a matter of practice, it appears that some officers almost abide by this unspoken rule, that it's odd for someone to be in the United States for more than six months in a calendar year," Mr. Semotiuk said.

In other words, repeated entry into the United States for long periods of time can become difficult and may require applying for visa extensions. (The Canadian government website travel.gc.ca/destinations/united-states also has a succinct explanation of this difficulty and length-of-stay limitation when entering the United States.)

Ultimately, all of these factors affect a snowbird's length of stay: U.S. tax rules, immigration, declaring your Canadian permanent residency and maintaining Canadian health coverage all blend together.

Yet no matter the duration a snowbird decides to stay, the one maxim always applies: "When you leave Canada, your health coverage doesn't follow you," emphasized Mr. Rachkovsky of the Canadian Snowbird Association.

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About the Author

Guy Dixon is a feature writer for The Globe and Mail. More

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