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

If your health insurance policy falls into arrears, there are ways to avoid your account being cancelled.

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By

Gary Ross Hunter

Edited by

Tim Bennett

Updated

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Key takeaways

  • If you miss a health insurance payment, you won't be covered until you are up-to-date.
  • 2 months in arrears and your health fund will likely cancel your cover.
  • Cancelled cover means you'll need to serve all of your waiting periods again.

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 or extras services.

How many payments can 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 funds 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.
  • 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

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To make sure you get accurate and helpful information, this guide has been edited by Tim Bennett as part of our fact-checking process.
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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 519 Finder guides across topics including:
  • Health, home, life, car, pet and travel insurance
  • Managing the cost of living
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2 Responses

    Tara's avatar
    TaraApril 2, 2017

    I have been with HBF health insurance for a very long time.
    Due do to an ongoing liability suit towards another individual I have been in financial hardship for quite sometime.
    A friend of mine, who has also been a long term customer said that there is something called Complimentary Cover.
    She said that this allowed her not to make payments for a period of time and still be covered. Is this cover available?

    Kind Regards
    Tara

      Zubair Hassan's avatarFinder
      ZubairApril 4, 2017Finder

      Hi Tera,

      Thank you for your question.

      finder.com.au is a comparison service and HBF is not currently in the panel of funds we have access to. While there is mention in the fund rules about suspending your cover for overseas travel, it does not mention financial hardship. You should contact HBF directly for clarification.

      All the best,
      Zubair

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