A Lifetime Community Rating loading guide

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What is Lifetime Community Rating (LCR)?

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 introduced 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,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.

How are the LCR loadings calculated?

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%

Who will pay Lifetime Community Rating Loadings?

Loadings will apply on health insurance policies that start 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. These are the only incidences where loadings apply. The level of loading will depend on the age at which the person takes out private health insurance.


 

Lifetime Community Rating FAQ's


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

Yes.

  • 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 you received, or were financially dependent on someone who received certain types of social welfare payment, you may be entitled to receive Lifetime Community Rating credits. To see the full list of eligible social welfare payments, click here.

You may be exempt from Lifetime Community Rating loadings if you were not living in the Republic of Ireland on the 1st May 2015, and take out Private Medical Insurance within 9 months of returning to the Republic of Ireland. 

To prove your eligiblity for this credit, you must provide copies of any of the below documents: 

To prove you were living abroad

  • Lease/Mortgage/Tenancy Agreement 
  • Employment contract 
  • Visa (Note: this visa would have to be for permanent residency. We are unable to accept holiday visas) 
  • Utility bill
  • Application for a PPS/Social Security number

To prove you were back in Ireland after 1st May 2015

  • Application for a PPS/Social Security number
  • Proof of entering the Republic of Ireland (plane ticket, ferry ticket etc)

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.

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

Periods of up to 13 weeks without cover will be allowed without affecting your loading.
 

The primary purpose of introducing LCR is to encourage people to purchase health insurance at a younger age. Encouraging more people to join the market at younger ages helps spread the costs of older or less healthy people across the market, helping to support an affordable premium for all.

LCR legislation outlines the method used to calculate the rate of loadings is based on an assessment across all ages in the market. 2% per year is considered to be a reasonable rate of increase, without being overly punitive.

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

Example A: Employer pays loading

There are no implications on the TRS amount. The employees BIK will be calculated on the gross rate. However the gross rate will now include the LCR loading, in this case 22%.

Example B : Employee pays loading


TRS is split proportionally between the employer and employee as it is assumed that the premium is inclusive of the LCR loading. The employee’s BIK is calculated on the gross rate of the premium paid by the employer, and the employee is liable to pay the applicable loading.
 

For more information on Lifetime Community Rating visit http://www.hia.ie/publication/lifetime-community-rating-0