Suspending your health insurance policy
You can suspend health insurance for several reasons, which can save you money in a few ways.
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. The following limits commonly apply:
- 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
Check the fine print with your health fund for full details of any limits that apply.
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 prior to your departure date as you cannot retrospectively apply to suspend cover.
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.
|Fund||Allows health insurance policy suspensions?||Can I suspend my cover because of financial hardship?||Can I suspend my cover if I become unemployed?||Minimum amount of time to be overseas||Maximum time to suspend cover|
|AAMI Health Insurance||Not mentioned||2 months||2 years|
|ahm Health Insurance||30 days||2 years|
|CUA Health Limited||Not mentioned||2 months||3 years|
|HCF||Not mentioned||30 days||2 years|
|Medibank Private Limited||Not mentioned||2 months||4 years|
|NIB Health Funds Ltd.||Not mentioned||2 months||2 years|
|Qantas Health Insurance||Not mentioned||2 months||2 years|
|Suncorp Health Insurance||Not mentioned||2 months||2 years|
|ACA Health Benefits Fund||Not mentioned||3 months||2 years|
|Australian Unity Health Limited||Not mentioned||2 months||2 years|
|Bupa Australia Pty Ltd||Not mentioned||2 months||2 years|
|CBHS Corporate Health Pty Ltd||Not mentioned||6 weeks||3 years|
|CBHS Health Fund Limited||Not mentioned||6 weeks||3 years|
|Defence Health Limited||Not mentioned||28 Days||2 years|
|Doctors' Health Fund||Not mentioned||Not mentioned||1 month||Not mentioned|
|Emergency Services Health||Not mentioned||14 Days||2 years|
|GMHBA Limited||Not mentioned||Not mentioned||1 month||3 years|
|Grand United Corporate Health||Not mentioned||2 months||2 years|
|HBF Health Limited||Not mentioned||Not mentioned||2 months||6 months|
|Health Care Insurance Limited||Not mentioned||28 days||2 years|
|Health Partners||Not mentioned||3 weeks||2 years|
|HIF||Not mentioned||Not mentioned||2 months||2 years|
|Hunter Health Insurance||Not mentioned||Not mentioned||2 months||2 years|
|Latrobe Health Services||Not mentioned||Not mentioned||Not mentioned||Not mentioned|
|Mildura Health Fund||Not mentioned||Not mentioned||2 weeks||2 years|
|National Health Benefits Australia Pty Ltd (onemedifund)||Not mentioned||Not mentioned||2 years|
|Navy Health Ltd||Not mentioned||1 month||2 years|
|Nurses & Midwives Health||Not mentioned||2 months||3 years|
|Peoplecare Health Insurance||4 weeks||2 years|
|Phoenix Health Fund Limited||Not mentioned||Not mentioned||21 days||2 years|
|Police Health||Not mentioned||14 days||2 years|
|Queensland Country Health Fund Ltd||Not mentioned||1 month||2 years|
|Railway and Transport Health Fund Limited||Not mentioned||Not mentioned||28 days||2 years|
|Reserve Bank Health Society Ltd||3 months||40 months|
|St.Lukes Health||Not mentioned||Not mentioned||2 weeks||2 years|
|Teachers Health Fund||Not mentioned||2 months||36 months|
|Transport Health Pty Ltd||30 days||12 months|
|TUH||2 months||3 years|
|Westfund Limited||2 months||24 months|
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 $90,000 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.
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