This is the second article of my 3 part series on Medicare and Health Insurance For Australian Expats. In this article I will be focussing on the key issues relating to Private Health Insurance For Australian Expats – what do with your private health insurance in Australia when moving overseas.
In this three part series, we will discuss :
Part 2. Private Health Insurance For Australian Expats*
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In the first article, we discussed that to understand the implications for medicare and private health insurance for Australian expats, you first need to understand whether or not you are an Australian resident for tax purposes. To help you with this, you can read my article on tax residency by clicking here or for more detailed information you can obtain a copy of my FREE EBook by clicking here.
Private Health Insurance For Australian Expats – Australian Tax Resident
If you remain an Australian tax resident you may still want to maintain your private health insurance. As an Australian tax resident you remain liable for the medicare levy surcharge (of 1-1.5%) if your taxable income exceeds certain thresholds and you do not have cover with an Australian Registered Health Fund. International Health Insurance Policies do not meet this criteria, and so you may want to maintain a complying policy to avoid the medicare levy surcharge which could be quite substantial depending on your income.
Assuming you have taken out international health insurance cover, you will be unlikely to be claiming against your Australian health insurance, so you could consider reducing your private health insurance costs by increasing the claims excess level on your policy, and/or reducing the insurance coverage (eg. removing cover for physiotherapy or dental work). There are minimum levels of insurance coverage you must maintain to avoid paying the medicare levy surcharge, and your health insurance fund can advise you. Be aware that if you reduce your insurance coverage, you may then need to sit out waiting periods when you return to Australia and adjust your level of cover.
Private Health Insurance For Australian Expats – Non-Australian Tax Resident
Non Australian Tax Residents are not liable for the medicare levy surcharge and therefore do not need to maintain private health insurance to avoid paying it.
If you want to stop paying your health insurance premiums you have two options :
1. Suspend Your Membership
2. Cancel Your Membership.
1. Suspending Your Health Insurance Membership
As an Australian Expat, you can ask your health fund to suspend your membership while you are living overseas. The advantages of suspending your membership are :
- you are not required to pay premiums while living overseas
- you won’t need to re-serve any waiting periods already completed
- during the suspension period you are considered to have cover for Lifetime Health Cover purposes (ie. you will not be required to pay any age based loadings on your premiums) provided you resume your cover when you return to live in Australia. For further information on Lifetime Health Cover refer to section later in this article.
Every health insurer has its own policies with respect to suspending membership, and the length of time, cost and conditions for suspension may vary between funds. If your insurer will not offer a suspension you can check with other insurers to see if they will offer it to you.
Also be aware that while your policy is suspended you are not covered by your health insurer and cannot make any claims.
When you return to Australia you generally have 30-60 days to reinstate your membership otherwise it may affect your lifetime health cover and policy waiting periods. You may also be asked to provide evidence of the dates you left and returned to Australia. Acceptable evidence might be boarding passes or airline tickets, otherwise you can obtain an International Movement Record from the Department of Immigration (search for form 1359 at www.immi.gov.au).
2. Cancelling Your Health Insurance Membership
It is possible to cancel your health insurance membership if you plan to move overseas for more than 1 continuous year without it affecting your Lifetime Health Cover, however you will then need to serve any waiting periods when taking out a new policy when you return to Australia. If you do not take out private health insurance when returning to Australia it may impact your Lifetime Health Cover and increase your health insurance premiums.
Lifetime Health Cover
Lifetime Health Cover was implemented by the Australian Government to encourage people to take out private health insurance when they are young and maintain that cover over their life. If you do not take out cover with an Australian Registered Health Fund on your “Lifetime Health Cover” base day, and then decide to take out cover later in life you will pay 2% loading on your premium for every year over the age of 30. The base day for most people is the later of 1 July 2000 or the 1st July following your 31st birthday.
Share with everyone your experiences and tips for health insurance while being an expat.
In my next article I will discuss options for International Health Insurance for Australian Expats.
*Private Health Insurance For Australian Expats refers to private health insurance in Australia as opposed to international health insurance you might take out to cover you while living abroad.
Want to understand more about international health insurance? Try these insurance providers and get a free quote online : Cigna Global
Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way. We may receive referral commissions from companies mentioned in this article.
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