How are restricted funds different from a standard health fund?
Most people are eligible to join a restricted fund of some kind, something that is not widely known. Being a former employee or having a family member who is a current employee in a particular industry may qualify you for membership, so it is worth investigating such links, as restricted funds can offer good value in the form of lower premiums and higher benefits.
There are two main types of health funds in Australia:
- Open health funds. These are standard health funds such as Medibank, ahm and nib, which offer health cover to anyone and are run for profit, for the benefit of shareholders.
- Restricted health funds. As their name suggests, these are funds where membership is restricted to certain people. They are usually operated by industry or employment groups and are not-for-profit, being run solely for the benefit of their members.
What restricted funds exist in Australia?
The current restricted funds in Australia are:
- Navy Health. Navy Health is open to employees and families of the Australian Defence Force and ADF contractors.
- Railway and Transport Health Fund. Railway and Transport Health Fund (RTHealth) is open to transport and electricity employees and their families.
- Doctors Health Fund. Doctors’ Health is open to doctors, health practitioners and their employees and families.
- ACA Health Benefits Fund. ACA is open to Seventh-day Adventist Church employees.
- Teachers Health Fund. Teachers Health is open to members of the education union and their families.
- Defence Health Limited. Defence Health is open to current and former members of the ADF and defence community and their families.
- Police Health. Police Health is open to employees of the police department and their families.
- Reserve Bank Health Society. The Reserve Bank Health Society (RBHS) is open to current and former employees of the Reserve Bank.
- CBHS Health Fund Limited. CBHS is open to current and former employees of the Commonwealth Bank Group and their families.
- TUH. TUH is open to current and former union members and their families.
What are the conditions for joining these funds?
What are the benefits?
There are several advantages to joining a restricted health fund. The main one is that, because they are run solely for the benefit of members, all profits are returned to the fund in the form of lower premiums and better policies with greater benefits.
Terms and conditions may also be more flexible with restricted fund memberships, such as in the case of Navy Health, where waiting period and pre-existing health condition rules are waived if you join within 90 days of being discharged from the ADF.
Not-for-profit funds also tend to return a higher percentage of premiums to their members compared to open health funds, so if you think you may be eligible to join such a fund, it may be well worth your while to investigate further.
Final things you might want to know
Some points to bear in mind when comparing restricted and open funds:
- Most restricted funds are open to family members, but this may be limited to immediate family (spouse and dependent children)
- Previous employment in an industry can encompass a number of years (you may still be eligible to join restricted funds, even though you have not worked in an industry for some time)
- Belonging to a restricted health fund may also give you access to other member only benefits such as industry super and life insurance
- Price should not be the only consideration when looking at restricted funds. It is also important to ensure that the level of cover being offered is adequate for your needs