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

What does it mean to be in arrears?

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 extras services.

How many payments cna you miss before losing cover?

If you’re two months or more behind on premiums, your health funds will likely cancel your policy. This is a really bad outcome, because it will wipe away all of your served waiting periods. For hospital cover, that means as much as a 12-month wait for pre-existing conditions or for childbirth. For extras, this could mean losing multi-year waiting periods that you have served for higher value treatments like orthodontics or hearing aids.

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.

Frequently asked questions

• What does it mean to be in arrears with health insurance?

  Being in arrears means you have fallen behind on your premium payments for your private health insurance. If you miss payments, your health fund may not cover medical or hospital expenses until you are up-to-date with your payments.

• How many payments can I miss before losing my health insurance cover?

  If you are two months or more behind on premium payments, your health fund will likely cancel your policy. This means you will lose all served waiting periods and may need to re-serve them if you rejoin.

• What steps can I take to avoid falling into arrears?

  To avoid arrears, ensure you know your payment schedule, set up direct debits, monitor your bank statements, and update payment details if your credit card changes. Additionally, check correspondence from your health fund for any notices about missed payments.

• What should I do if my health insurance premiums are in arrears?

  Contact your health fund immediately to discuss payment arrangements or suspension options. If you are unable to resolve the issue, consider reaching out to the Private Health Insurance Ombudsman for assistance or explore ways to make your cover more affordable.

To make sure you get accurate and helpful information, this guide has been edited by Tim Bennett as part of our fact-checking process.

Written by

Gary Ross Hunter

Journalist

Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards. See full bio

Gary Ross's expertise

Gary Ross has written 590 Finder guides across topics including:

• Health, home, life, car, pet and travel insurance
• Managing the cost of living