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Suspending your health insurance policy

You can suspend health insurance for several reasons, which can save you money in a few ways.

Who is this cover for?

Key takeaways

Can you suspend your health insurance policy?

Most health funds let you suspend your health insurance cover. That said, the minimum and maximum times for which you can suspend cover varies between brands. You'll need to check the fine print, but these rules are typical:

  • You can suspend your membership for a minimum of 2 months
  • You can suspend your membership for a maximum of 2 years
  • The number of suspensions allowed per calendar year is usually limited to 1 or 2
  • A separate limit may apply to the maximum suspension allowed for financial hardship, for example 3 months
  • There may also be a lifetime limit on the number of financial hardship suspensions permitted

Who is eligible to suspend cover?

Eligibility rules for temporarily suspending your health insurance policy vary between funds. However, to qualify for this option you will typically need to:

  • Have been an active member of the health fund for at least 12 consecutive months
  • Have all your premium payments up to date
  • If going overseas, you will also need to apply for a suspension before you leave.

Which health funds let you suspend health insurance cover?

Every Australian health insurance provider has the option to suspend your coverage. However, some health funds are more flexible with their suspension policy than others. Finder makes it easy to compare health insurance from these funds for free.

FundCan I suspend my cover because of financial hardship?Can I suspend my cover if I become unemployed?Minimum amount of time to be overseasMaximum time to suspend cover
AAMI Health Insurance
Not mentioned2 months
  • 2 years - overseas travel
  • 3 months - financial hardship
ahm Health Insurance
30 days
  • 2 years - unemployment
  • 2 years - overseas travel
  • 3 months - financial hardship
HCF
30 days
  • 2 years - overseas travel
  • 2 years - unemployment
Medibank Private Limited
Not mentioned2 months
  • 3 months - financial hardship
  • 4 years - overseas travel
  • 4 years - imprisonment
nib Health Funds Ltd.
Not mentioned2 months
  • 3 months - financial hardship
  • 2 years - overseas travel
Qantas Health Insurance
Not mentioned2 months
  • 3 months - financial hardship
  • 2 years - overseas travel
Suncorp Health Insurance
Not mentioned2 months
  • 2 years - overseas travel
  • 3 months - financial hardship
ACA Health Benefits Fund
Not mentioned12 weeks
  • 2 years - overseas travel
  • 2 years - financial hardship
Australian Unity Health Limited
Not mentioned2 months
  • 2 years - overseas travel
  • 3 months - financial hardship
Bupa Australia Pty Ltd
2 months
  • 2 years - overseas travel
  • 3 months - financial hardship
CBHS Corporate Health Pty Ltd
Not mentioned6 weeks
  • 3 years - overseas travel
  • 2 years - financial hardship
CBHS Health Fund Limited
Not mentioned6 weeks
  • 3 years - overseas travel
  • 2 years - financial hardship
Defence Health Limited
Not mentioned28 days
  • 2 years - overseas travel
  • 2 years - imprisonment
  • 1 year - financial hardship
Doctors' Health FundNot mentionedNot mentioned1 monthNot mentioned
Emergency Services Health
Not mentioned14 days
  • 2 years - overseas travel
GMHBA Limited
Not mentioned1 month
  • 3 years - overseas travel
HBF Health Limited
Not mentioned2 months
  • 3 years - overseas travel
  • 3 years - imprisonment
  • 1 year - financial hardship
Health Care Insurance Limited
Not mentioned28 days
  • 2 years - overseas travel
  • 6 months - financial hardship
Health Partners
Not mentioned3 weeks
  • 2 years - overseas travel
  • 1 year - financial hardship
HIF
2 months
  • 2 years - overseas travel
  • 1 year - financial hardship
Hunter Health InsuranceNot mentionedNot mentioned2 months
  • 2 years - overseas travel
Latrobe Health Services
14 days
  • 2 years - overseas travel
  • 3 months - financial hardship
Mildura Health FundNot mentionedNot mentioned2 weeks
  • 2 years - overseas travel
National Health Benefits Australia Pty Ltd (onemedifund)
Not mentionedNot mentioned
  • 2 years - overseas travel
Navy Health Ltd
Not mentioned1 month
  • 2 years - overseas travel
  • 1 year - financial hardship
Nurses & Midwives Health
2 months
  • 3 years - overseas travel and financial hardship
Peoplecare Health Insurance
1 month
  • 2 years - overseas travel
  • 6 months - financial hardship
Phoenix Health Fund Limited
Not mentioned3 weeks
  • 2 years - overseas travel
  • 1 year - financial hardship
Police Health
Not mentioned14 days
  • 2 years - overseas travel
Queensland Country Health Fund Ltd
Not mentioned1 month
  • 2 years - overseas travel
  • 6 months - financial hardship
Railway and Transport Health Fund Limited
28 days
  • 2 years - overseas travel
  • 2 years - unemployment
Reserve Bank Health Society Ltd
Not mentioned3 months
  • 40 months - overseas travel
  • 12 months - financial hardship
St.Lukes HealthNot mentionedNot mentioned1 month
  • 2 years - overseas travel
Teachers Health Fund
2 months
  • 3 years - overseas travel and financial hardship
TUH
2 months
  • 3 years - overseas travel
  • 1 year - financial hardship
Westfund Limited
2 months
  • 2 years - overseas travel
  • 3 months - financial hardship due to natural disaster

The tax impacts of suspending health insurance

While suspending your health insurance policy can save you money on your premiums, there are other tax implications that you may face by not have adequate coverage, depending on your circumstances. The main ones you need to worry about are the Lifetime Health Cover Loading and the Medicare Levy Surcharge.

Lifetime Health Cover Loading

If you're 31 years or older, you can go without hospital cover for a total 1,094 days (around 3 years) without affecting your Lifetime Health Cover Loading. However, once you've used up 1,094 days without cover, the loading will kick in again, adding 2% to your future premiums for each year you're not covered.

Medicare Levy Surcharge

If you earn over $97,000 per year, you're probably required to pay the Medicare Levy Surcharge, an additional levy on your tax of between 1% and 1.5%. If you suspend your policy, you may have to pay the MLS in your tax return for that financial year.

Why would I want to suspend my health insurance policy?

People suspend their health insurance for many different reasons. Financial hardship is a major reason people do this. If you've lost your job or are battling debt problems and struggling to meet your premium payments, your health fund may agree to let you suspend your membership for a temporary period.

Another common reason for suspending a policy is overseas travel. Australian private health funds are unable to provide any cover for medical expenses you incur overseas – you’ll need overseas travel insurance for that sort of protection – so if you’re going to be out of the country for a couple of months or more, suspending cover makes good financial sense.

Why not just cancel my policy?

When your health fund agrees to allow you to suspend your membership for a temporary period, you will not have to re-serve any waiting periods when you resume cover at a later date. You will also be able to maintain the level of cover that suits your needs and keep the current benefit limits that apply to your policy.

But if you decide to cancel your health insurance and then take out a new policy sometime in the future, you will have to serve the full waiting periods set by the fund before you can claim any benefits. This could have a serious impact on your ability to access the health care you need, especially if you develop any health problems which will then be classed as pre-existing conditions by your new fund.

Frequently asked questions

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Insurance expert

Tim Bennett is a Finder insurance & utilities expert. For over 10 years he's reported on news, politics, finance and other topics as a journalist and radio presenter. Tim's roles have included radio news reader and breakfast at the ABC, news producer for SBS and producer for Fairfax Media. Tim regularly appears as a health insurance expert on programs like Sunrise and SBS news, as well as in the Australian, The Daily Telegraph, The Courier Mail and more. See full bio

Tim's expertise
Tim has written 114 Finder guides across topics including:
  • Personal finance
  • Financial comparison
  • Health insurance
  • General insurance
  • Life insurance

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4 Responses

    Default Gravatar
    CatMay 20, 2019

    I have an HBF policy, I’m currently overseas and won’t be back for at least 6 months. I didn’t cancel it before I left so I’m still paying for it fortnightly, can I suspend it whilst I’m overseas? Thanks :)

      AvatarFinder
      MaiMay 21, 2019Finder

      Hi Cat,

      Thank you for reaching out.

      Yes, it shows that HCF allows policy suspension if you are overseas for a minimum of 30 days and maximum of 2 years. You can contact them by phone, email or post, or by filling out an online application form if available. You will usually be sent a confirmation letter or email when your application for suspension has been approved.

      Hope this helps! 😊

      Kind Regards,
      Mai

    Default Gravatar
    MarJanuary 21, 2019

    What if I decide to not come back for good in Australia but will just be coming to visit or for holidays with a maximum stay of 3 months?

      AvatarFinder
      JeniJanuary 22, 2019Finder

      Hi Mar,

      Thank you for getting in touch with Finder.

      You can normally only suspend your health insurance for 2-3 years max.

      If you’re leaving long term – it could work out better to consider something like ex-pat health insurance depending on your planned return visits. Please use our comparison table to help you find the health fund that suits you. When you are ready, press the “Go to site” button of your preferred insurer to request a quote or purchase a policy.

      Before applying, please ensure that you read through the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.

      I hope this helps.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

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