Aviva’s Guide to LCR – Lifetime Community Rating

What is Lifetime Community Rating?

In Ireland, everybody is charged the same premium for a particular health insurance plan, irrespective of their age, gender and the current or likely future state of their health. This is called community rating.

On the 1st May 2015, the government will introduce Lifetime Community Rating legislation. Under Lifetime Community Rating (LCR), community rating is modified to reflect the age at which a person takes out private health insurance. Late entry loadings are applied to the premiums of those who join the health insurance market at age 35 or over.

If you are 35 years of age or over and you do not have health insurance before 1st May 2015, due to Lifetime Community Rating your premium may cost more.

If you take out private health insurance earlier in life, and retain it, you will pay lower premiums compared to someone who joins when they are older.

Who will pay lifetime community rating loadings?

Loadings will apply on health insurance policies that start on or after the 1st May 2015. From this date, anyone who takes out private health insurance at age 35 or over, who has never had health insurance in Ireland before or has had a break in their cover of more than 13 weeks, will pay a loading. The level of loading will depend on the age at which the person takes out private health insurance.

Note: There is a grace period up to 30th April 2015 prior to the introduction of loadings during which individuals of any age can purchase private health insurance without incurring loadings. Following the expiry of the grace period, the only way to avoid paying late entry loadings is to take out private health insurance before reaching the age of 35.

How will this affect me?

How are the loadings calculated? From the 1st May 2015, if you are purchasing a private health insurance policy for the first time at age 35 years or older you will pay a 2% loading on top of your premium for every year you are aged over 34 up to a maximum of 70%.

Are there any exemptions from lifetime community rating loading?

Yes.

• There will be no LCR loadings applied to those who have health insurance before the grace period (30th April 2015).

• If you have held health insurance in the past, this period of time will become a qualified credited period.

• If you have received certain types of social welfare payments or have been financially dependent on someone who has received such payments, you may be entitled to receive credits.

• If you have lived abroad before the 1st May 2015 and return to Ireland after this date, you have 9 months to take out health insurance without any loadings.

If I had private health insurance previously, but had a break in my cover, do I still have to pay the loadings?

Yes – but the level of loading will be reduced by the number of previous years health insurance cover they had.

Will I have to pay a loading for the rest of my life if I continue to maintain my private health insurance cover?

Yes. The loading that applies when a person buys private health insurance after the 1st May 2015 will apply in subsequent years.

Can an insurer make an exemption for me from the LCR loading?

No, under LCR legislation, loadings cannot be waived by the insurer.

What happens if I switch from one insurer to another?

Switching from one insurer to another or from one policy to another does not affect the applicable loading. Loadings, if any, will continue to apply and insurers are required to supply each other with proof of an individual’s prior cover.

If you have any questions about Health Insurance – please call our expert Aisling O’Connor CIP on 045 431642.