Health insurance: What does it mean to be in arrears?

Missed a payment on your health cover or unable to pay your next premium payment? Are your premiums in arrears? While not ideal, it's not the end of the world.

Keep reading this guide to find about what to do when your premiums are in arrears, steps to avoid being in arrears and other options such as applying for financial hardship with your health fund.

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What does it mean to be in arrears?

In your fund rules document, you might come across wording similar to this:

A membership (other than a suspended membership) is "in arrears" or in "a period of arrears" whenever the date to which premiums have been paid is earlier than the current date.

So, what does this mean? Membership arrears refers to falling behind on your premium payments for private health insurance cover. In order to take advantage of cover for medical and hospital expenses provided by your private health fund, you’ll need to make regular premium payments to cover the cost of your insurance.

But if you fall behind on your payments, your health fund won’t cover the cost of hospital treatment or ancillary services you receive. And if you’re two months or more behind on premiums, the fund can cancel your policy.

Not only does this mean that you will no longer be able to enjoy the benefits of private health insurance, but also that you may need to serve waiting periods when you rejoin.

Arrears conditions for health funds in the finder.com.au panel

Health fund	Penalties for falling into arrears and conditions for termination	Find out more
	If your policy is not financial, which means you are in membership arrears or a period of suspension, you won't be able to claim any benefits until you rectify the situation. Approval from HIF management is required to re-activate a membership. After 12 months of suspension or arrears you will be unable to request re-activation and you will have to re-apply to HIF as a new member with all standard waiting periods applying.	More info
	Health.com.au is not able to pay any benefits for any treatment you receive while your account is in arrears. Two months of non-payment will result in your policy being cancelled.	More info
	Benefits are not payable for treatment provided to a member during a period of arrears. A policyholder or principal member may regain an entitlement to benefits for such treatment by paying all outstanding premiums as agreed with ahm, and the minimum amount of advance premiums relevant to the policyholder or principal member. When a period of arrears exceeds two months, ahm may terminate a membership with immediate effect and without written notice to the policyholder or principal member.	More info
	If your membership falls into arrears or is suspended, Australian Unity will not pay your claims during that period. If you don’t make a payment and your membership falls into arrears for a period of more than 60 days, your cover will be cancelled and your entitlement to benefits will cease.	More info
	GMHBA will not pay any benefits while your membership is in arrears or is suspended. Membership will cease when your premiums fall into arrears of more than two months after the premium due date.	More info
	Claims for goods and services you received during any period where your payment is in arrears, your policy is not financial or your membership is suspended will not be approved. If you fall into arrears exceeding two months your policy will be cancelled. HCF will send you written notification of termination.	More info
	If your policy falls into arrears, you and all other persons listed on the policy will be ineligible to lodge claims. If your premium payments fall into arrears of two months nib may cancel your policy.	More info
	Transport Health will not cover your claims for goods and services received during any period where your payment is in arrears or your membership is suspended.	More info

For a full list of health funds and their terms relating to being in arrears, please refer to the table at the end of this article.

Steps to avoid being in arrears?

It’s your responsibility to ensure that you make your premium payments on time and retain cover in place, so keep the following tips in mind to avoid falling behind:

• Know what’s needed. Ask your health fund what you need to do to remain financial. How much are your premium payments and how often do they need to be made?

• Look out for notices. Most health funds will let you know if you’re in arrears and tell you what you need to do in order to get up to date. Check all correspondence you receive from your fund and follow the instructions provided.
• Leeway. As most health funds require you to pay premiums in advance, they will usually allow you a little bit of leeway if you only fall a few weeks behind on payments.
• Regular payments. If you set up a direct debit from a bank account or credit card to pay your health insurance premiums, check bank statements regularly to make sure the payments have been made as scheduled. If you pay via credit card, make sure to update your card details with the health fund whenever your bank issues a new card.

What to do if your premiums are in arrears

• Contact your fund. If you’ve fallen behind on premium payments due to temporary financial hardship, for example if you’ve been made redundant and are looking for a new job, contact your health fund to see if you can work out some sort of arrangement. Some finds will agree to a payment plan so you can get back up to date.

• Suspend premiums. In certain circumstances such as temporary financial hardship, some health funds will allow you to suspend premium payments until you get back on your feet.

• Get up to date. If you discover that you are in arrears, contact your health fund to find out what needs to be done to get back up to date. If you want to keep your policy in place, pay the money you owe. However, if you’re more than two months behind on payments, you may need to re-serve waiting periods when you resume cover.

• Contact the Private Health Insurance Ombudsman. If you are unable to reach an arrangement with your health fund or you feel you are being unfairly treated, contact the Private Health Insurance Ombudsman (PHIO) for help.

• Make cover more affordable. Consider taking steps to make health insurance cover easier on your hip pocket, such as choosing a lower level of cover or taking advantage of any membership discounts.

Tips for managing your policy

There are also several steps you can take to manage your policy better and avoid getting in arrears, including:

• Taking advantage of discounts. You may be able to save on cover by paying premiums annually, in advance or by direct debit. See the below section on discounts for more information.

• Suspend your membership. If you’re temporarily unemployed, experiencing financial hardship or studying or working overseas, your health fund may grant you an exemption from premium payments for a set period of time.

• Review your cover. As your circumstances and lifestyle change, so too do your health cover needs. You may be paying for health insurance that covers services you no longer need, for example pregnancy, so review your cover to ensure that it is tailor-made to suit your needs.

• Choose a lower level of cover. A policy that restricts or excludes certain high-cost services will be more affordable and may also be more suitable for your financial situation. However, make sure you’re aware what services won’t be covered if you go down this route.

• Choose an excess or co-payment. If you agree to pay an excess when you are hospitalised, or make a co-payment for every day you are in hospital, you can reduce the cost of health insurance premiums.

• Avoid extra charges. You can also do yourself a financial favour by avoiding premium loading under the Lifetime Health Cover (LHC) Scheme. To do this, you’ll need to take out adequate private hospital cover before July 1 following your 31st birthday.

Look for discounts from your health fund

Another way you can avoid getting in arrears is to take advantage of the many discounts provided by funds. These discounts result in more affordable premiums and can include:

• Advance discounts. Pay your premiums at least three months in advance and save on cover.

• Payroll deduction discounts. Receive cheaper premiums if you setup a direct deduction from your salary.

• Premium frequency discounts. Some funds offer cheaper cover if you pay your premiums annually rather than monthly or quarterly.

• Direct debit discounts. Enjoy cheaper premiums when you pay your premiums via direct debit from a bank account or credit card.

• Electronic discounts. If you agree to conduct all communications, including claims, with your fund electronically, you may receive a premium discount.

• Contribution group discounts. You may be entitled to a discount if you belong to a contribution group, such as if your health insurance is organised through your workplace.

• Age and income discounts. In some states, pensioners and low-income earners receive free ambulance services, which means the fund will not be required to pay a state or territory levy for your cover and your premiums will therefore be cheaper.

• Member discounts. Some funds offer discounts to customers who are members of partner organisations. For example, Australian Unity offers a 7.5% discount to NRMA members.

• Extras discounts. Your health fund membership may also entitle you to discounts with the fund’s optical, dental, health and fitness partners.

• Introductory discounts. You may receive free or reduced cover for an introductory period after switching from another health fund.

Speak with adviser about your health insurance options

Complete list of funds

Health fund	Penalties for falling into arrears and conditions for termination	Find out more
	Benefits are not payable for treatment provided to a member during a period of arrears. A policyholder or principal member may regain an entitlement to benefits for such treatment by paying all outstanding premiums as agreed with ahm, and the minimum amount of advance premiums relevant to the policyholder or principal member. When a period of arrears exceeds two months, ahm may terminate a membership with immediate effect and without written notice to the policyholder or principal member.	More info
Australian Unity	If your membership falls into arrears or is suspended, Australian Unity will not pay your claims during that period. If you don’t make a payment and your membership falls into arrears for a period of more than 60 days, your cover will be cancelled and your entitlement to benefits will cease.	More info
	If you fail to make your premium payments by the due date your policy will be considered to be in arrears and may render you unable to claim for goods and services during that period. If your period of arrears exceeds two months Bupa may cancel your policy.	More info
	If your premium payments fall into arrears CUA reserves the right to suspend your benefit entitlements until you rectify the situation. Your policy will be automatically cancelled if your premiums are two or more months in arrears.	More info
	GMHBA will not pay any benefits while your membership is in arrears or is suspended. Membership will cease when your premiums fall into arrears of more than two months after the premium due date.	More info
	To claim benefits your policy must be financial and not in arrears at the time of incurring the expense for the service or treatment. Your membership will cease when premiums fall into arrears of more than two months after the premium due date.	More info
GU Health	If you fall into arrears and your policy ceases to be financial, your benefit rights may be suspended until you settle your debts. GU Health reserves the right to terminate your membership if your arrears exceed a 60 day period.	More info
	If you do not pay your premiums due by the premium due date, HBF will not pay benefits towards any treatment received after the premium due date until the arrears have been cleared and accepted. Arrears exceeding two months may result in HBF terminating your policy.	More info
	Benefits are not payable for treatment if your contributions are in arrears and do not cover the date(s) you received the treatment. If your contributions fall more than two months in arrears, your membership may be ceased. Acceptance of arrears payments after two months is not automatic, so you should contact Health Care Insurance directly to appraise them of the situation.	More info
	If your premiums are overdue and no arrangement has been made with Health Partners, your membership will be considered to of lapsed. In this situation no benefits can be paid and you will have to re-serve waiting periods if, and when you reinstate your policy.	More info
	If your policy is not financial, which means you are in membership arrears or a period of suspension, you won't be able to claim any benefits until you rectify the situation. Approval from HIF management is required to re-activate a membership. After 12 months of suspension or arrears you will be unable to request re-activation and you will have to re-apply to HIF as a new member with all standard waiting periods applying.	More info
	Latrobe Health Services require membership fees to be paid at least one period in advance. Failure to make payments may result in suspension of your ability to make claims. Memberships that are over 60 days in fee arrears are automatically cancelled.	More info
	Benefits are not payable for treatment provided to you during a period of arrears. If your period of arrears exceeds two months, Medibank may terminate your membership with immediate effect and without written notice.	More info
	If your membership contributions are in arrears Mildura Health Fund will suspend your benefit entitlements until they are cleared. If your premiums stay in arrears for more than two consecutive months, your cover will lapse and your membership will be closed.	More info
	Benefits are not payable for treatment provided to you during a period of arrears. This rule may be waived depending on your circumstances, so it's advisable to contact onemedifund immediately if you think you will be unable to fulfil your payment obligations. If your policy is more than two months in arrears it will be regarded as un-financial, which may result in immediate termination of your membership.	More info
	If your policy falls into arrears, you and all other persons listed on the policy will be ineligible to lodge claims. If your premium payments fall into arrears of two months nib may cancel your policy.	More info
	If you are on a monthly, quarterly, half yearly or yearly payment plan and your drawing is returned or dishonoured by your financial institution, Peoplecare will write to you informing you of an alternative deduction date. Weekly and fortnightly payers will have a double deduction taken on their next payment date. If debits are returned on three consecutive occasions your cover will be immediately terminated, and you may have to pay any transaction fees incurred by Peoplecare in regards to your returned or dishonoured payments.	More info
	If your payment contributions are overdue and you have not made any special arrangements with Phoenix Health Fund your membership my lapse. In this event all benefits will not be payable and you may have to re-serve any applicable waiting periods.	More info
	Failure to make your membership contributions before the due date will cause your benefit entitlements in your policy to cease until you settle your arrears. If your arrears exceed a period of 63 days or more, your membership will be terminated. Written notification will be sent to you prior to the closing of your policy.	More info
	Transport Health will not cover your claims for goods and services received during any period where your payment is in arrears or your membership is suspended.	More info
	No benefits will be paid for services rendered to you during the period in which your policy is in arrears. Benefit entitlements will only be restored upon the settling of outstanding payments. Premiums that are more than two months in arrears will result in the policy being terminated, unless special arrangements have been made between you and Westfund prior to this deadline.	More info
Restricted fund*	Benefits are not payable for treatment provided to you if your policy is in a period of arrears. ACA Health may waive this fund rule at its discretion. If you fall into arrears for a period of two months and pay such arrears before the end of that period you can restore your entitlement to benefits for services rendered during that period. ACA Health may terminate your membership if your premium payments are in arrears for three months or more.	More info
Restricted fund*	CBHS will not pay any benefits for your claims on goods or services rendered to you during a period in which your membership is in arrears. Your benefit entitlements will be reinstated once you have paid all premiums owing and CBHS has accepted them. CBHS will have grounds to cancel your membership if your arrears period exceeds a two month period.	More info
Restricted fund*	Defence Health will suspend your right to benefits if your premium payments fall into arrears. If your payment arrears exceed a two month period, the fund may terminate your membership. If you pay your arrears, Defence Health may reinstate your policy at your request with continuity of entitlements.	More info
Restricted fund*	Benefits will be deemed not payable if you are in a period of suspension or when your membership is in arrears. Failure to pay your membership contributions within two months of your last payment will result in the termination of your policy.	More info
Restricted fund*	If your payments in arrears for two months your ability to claim benefits may be suspended. If your payments are more than two months behind your policy will lapse. If you decide to repay your arrears after this period they may not be accepted and you will have to re-apply as a new member with all standard waiting times applying.	More info
Restricted fund*	If you fail to keep up-to-date with policy payments, your membership will fall into arrears and no benefits will be paid to you or any other persons included in your policy. Your policy may be cancelled by Police Health if your arrears exceed more than two months.	More info
Restricted fund*	Unless you are paying by salary deductions, you are obligated to pay all your contributions in advance depending upon your payment schedule. Failure to do this will result in your ability to lodge claims being suspended until the situation is resolved. If you fail to make payments for more than three months your membership will be terminated.	More info
Restricted fund*	If you are on a monthly, quarterly, half yearly or yearly payment plan and your drawing is returned or dishonoured by your financial institution, Reserve Bank Health Society will write to you informing you of an alternative deduction date. Weekly and fortnightly payers will have a double deduction taken on their next payment date. If debits are returned on three consecutive occasions your cover will be immediately terminated, and you may have to pay any transaction fees incurred by Reserve Bank Health Society in regards to your returned or dishonoured payments.	More info
Restricted fund*	Benefits will not be paid for services rendered to you during the period in which your policy is in arrears. Full payment of outstanding contributions will be required for your benefit privileges to be reinstated. Teacher Health Fund may cancel your policy if the period of arrears in respect of that policy exceeds two months.	More info
Restricted fund*	In order to lodge claims TUH requires you to be up-to-date with your premium payments. Failure to do so will result in immediate suspension of claiming rights. Your membership with TUH will automatically cease if your payments are more than two months in arrears.	More info

_{*Restricted funds only provide cover to members of specific industries, groups and organisations. In some cases family members may also be eligible to join.}

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