You can suspend health insurance for several reasons, which can save you money in a few ways.
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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.
Fund
Can I suspend my cover because of financial hardship?
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
It's usually easy to temporarily suspend your health fund membership. If you're suspending due to financial hardship, get in touch with your health fund. Once the suspension ends, you'll need to start making premium payments again within 30 days. If you're suspending cover while you travel overseas, make sure your travel dates are locked when you contact your health fund. Your suspension must be approved before you depart, as you can't apply for a backdated suspension.
No, you will not receive any cover for health care expenses you incur while your policy is suspended. This means that you will not be able to make any hospital or extras claims. Of course, you will also not be required to pay any premiums during this time. However, despite the fact that no cover is provided, you are still considered to be a member of the fund during this time. As a result, you will be able to easily resume cover when the suspension period ends.
You'll need to restart cover within 30 days of the end of the suspension date, otherwise your policy could be cancelled. Your fund will probably remind you when cover is due to be resumed or will automatically reinstate cover at your requested date. If you've been overseas with an unconfirmed return date, inform the health fund that you are back in Australia within 30 days of your return (you will usually need to provide a passport, flight ticket or boarding pass as proof). If you are no longer experiencing financial hardship and can afford to resume cover, you can let your health fund know at any time. Once you've restarted your policy, your level of cover, benefits and waiting periods will all be the same as they were before the suspension.
The rules for suspending your membership vary from one health fund to the next. So if your fund refuses to let you suspend your policy, contact other funds to find out whether they would be willing to grant a suspension. If suspending your membership is not an option, remember that you may be able to let cover lapse for a limited period – remember, you're allowed a combined total of 1,094 days without any cover without it having any effect on your LHC loading.
You will need to get permission from your fund to suspend cover, so you'll need to have an acceptable reason to ask for this option. Financial hardship and overseas travel are the two most common reasons for taking a break from cover, but your health fund may also allow a suspension in other specific circumstances.
There may be a limit on how many times you can suspend your health insurance in a calendar year. Either once or twice per year are the most limits. Check with your health fund to find out if there are any other special conditions you need to meet.
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 121 Finder guides across topics including:
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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 :)
Finder
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
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?
Finder
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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Depending on your age, you may be eligible for an
aged-based discount. This is used to estimate your
rebate.
Under 65
65 - 69
70 or older
What's your household's taxable income?
This is the combined income you and your spouse earn before tax. It's needed to calculate the correct Australian government rebate.
$93,000 and under
$93,001 to $108,000
$108,001 to $144,000
$144,001 and over
What kind of health insurance do you need?
Combined (Extras + Hospitals)
Extras
Hospital
What level of hospital coverage would you like?
You can change this at any time later.
Legend
Covered
Restricted cover, You may be partially covered for
this category.
Not covered. Optional for insurer to include.
*Prices updated March 2024, in line with Finder's
database of health insurance policies. Prices are based
on a single individual with less than $93,000 income and
living in Sydney with a $750 excess.
What extras cover do you need? (Optional)
Select as many as you want or move to the next step
Preventative & general dental
Major dental & implants
Optical
Physiotherapy
Podiatry
Non-PBS pharmaceuticals
Chiropractic
Emergency ambulance
Remedial massage
Email me my results (optional)
To get a copy of your results for later, add your email below
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 :)
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
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?
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