Your annual membership summary.
If you held a level of HIF hospital cover during the financial year, HIF is required to send you a Lifetime Health Cover (LHC) Annual Statement. Your LHC Statement shows the adults covered by a HIF hospital product during the statement period, as well as any LHC premium loadings and/or periods of absence (any days without hospital cover) that may apply.
Why is it important to be aware of your LHC position?
Lifetime Health Cover (LHC) is a Government initiative designed to encourage people to take out hospital insurance earlier in life and to maintain their cover. If you don’t have hospital cover on the 1st of July following your 31st birthday and then decide to take out hospital cover later in life, you will pay a 2% loading on top of your premium for every year you are aged over 30. The maximum loading is 70%. Once you have paid a LHC loading on your private hospital insurance for 10 continuous years, the loading is removed as long as you retain your hospital cover.
Gaps in cover - to cover small gaps, such as switching from one fund to another, you are able to be without hospital cover for periods totalling 1,094 days during your lifetime, without affecting your loading. This is known as ‘Days of Absence’. If you use up your Days of Absence, you will pay a 2% loading on rejoining private hospital cover. The loading will increase by 2% for every year after that without cover.
Suspension of membership - if HIF allows you to suspend your hospital cover for a short period, this period does not affect your LHC loading.
Going overseas - if you cancel your hospital insurance and go overseas, your days outside of Australia aren’t counted towards the 1094 days allowed to be without private health insurance, provided you stay overseas for at least one continuous year.
New migrants to Australia - if you are aged 31 years or over, you will not have to pay a LHC loading if you take out private hospital insurance within 12 months of being registered for Medicare. After this time you will have to pay 2% more for each year you are aged over 30 when you take out private health insurance.
For further tax information...
Please contact the Australian Tax Office (ATO) on 13 28 61, visit the ATO website or speak to your tax accountant.
You can also browse our website for more information on the Federal Government Rebate, Lifetime Health Cover age loading or the Medicare Levy Surcharge