PHI 77/10

This circular issued by the Private Health Insurance Branch contains information regarding implementation of Lifetime Health Cover (LHC) 10 year provision

Page last updated: 09 July 2014

Printable version of 77/10 (PDF 43 KB)

16 November 2010

Implementation of Lifetime Health Cover (LHC) 10 Year Provision

Under section 34-10 of the Private Health Insurance Act 2007 (the Act) health insurers are required to identify members who have paid Lifetime Health Cover (LHC) loadings for 10 continuous years and remove the LHC loadings from these members’ private health insurance hospital premiums.

In implementing the LHC 10 year provision, there may be circumstances when it may be difficult to establish whether a member has paid a LHC loading for the required time. For example, when a member has:
  • transferred between insurers a number of times;
  • utilised one or more types of “permitted days without hospital cover”; and/or
  • had any period of time that they are taken to have had hospital cover under section 34-15 (2)(b) or (c) of the Act.
To assist when members transfer between insurers, the Australian Health Insurance Association (AHIA) has updated the “Common Clearance Certificate” taking into consideration the LHC 10 year provision and the information that is required to establish when 10 years continuous coverage has been attained. The updated version of Common Clearance Certificate is available on the AHIA website.

At information sessions about the LHC 10 year provision, held in February 2010, the Department undertook to consult with AHIA and the Health Insurance Restricted Membership Association of Australia (HIRMAA) regarding an industry-wide approach to be adopted in cases when it may be difficult for an insurer to establish when a member’s 10 year period of paying the loading has been reached.

An appropriate process to be followed in instances when there is a discrepancy between when the insurer’s records indicate that a member has reached 10 years continuous hospital cover and when a member believes they have completed the required 10 years of coverage has now been agreed.

A flow chart showing the steps to follow when establishing whether a member is eligible to have their Lifetime Health Cover loading removed under section 34-10 of the Act is at Printable version of Attachment A (PDF 10 KB) to this Circular. To ensure consistency across the industry all insurers are strongly encouraged to follow this process.

Process for establishing whether a member is eligible to have their Lifetime Health Cover loading removed under section 34-10 of the Private Health Insurance Act 2007


Steps to follow when establishing whether a member is eligible to have their lifetime health cover loading removed under section 34-10 of the Act. To ensure consistency, all insurers are encouraged to follow this process
If you require further information please telephone: (02) 6289 9853/24 hr answering machine or email the enquiry to Private Health Insurance Branch

For more information visit 2010 Private Health Insurance (PHI) Circulars.

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