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Private Health Insurance Rebate Changes

From 1 July 2012, the Government will introduce three new “Private Health Insurance Incentives Tiers”.

These changes include the means testing of the 30% Private Health Insurance Rebate. As a result, your private health insurance premiums may increase dramatically in the 2012/13 financial year.

A strategy that you may consider if the above reductions are going to impact you is to pre-pay your health insurance premiums. You can pre-pay your annual premium before the end of June 2012 to cover the next year and any rebate reductions will only apply to premiums you pay after 1 July 2012.

We understand some insurers will allow members to prepay up to 18 months in advance.

If you take advantage of this strategy, you will in effect still receive the 30% rebate for those prepaid premiums. This once-off saving could be substantial.

Another benefit of pre-paying is that you avoid any premium increases during this period – and typically health insurance premium increases seem to always go up by more than inflation (CPI). We are also aware that there may be a discount available for pre-paying premiums with some health funds.

If you have any questions, please do not hesitate to call us on 08 9301 2200, or contact us today.

We greatly value our clients and are committed to honouring the trust they place in us by creating visible results for them. Get in touch to find out how we help our clients maximise profits, minimise tax, and invest the balance for growth.

written by:

McKinley Plowman