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Impact of Lifetime Community Rating Legislation for Employers

The clock is ticking for all those employers thinking of introducing a health insurance group scheme for their staff.  From 1st May 2015, the new Lifetime Community Rating legislation comes into force which will see all new members to health insurance aged 35 or older paying a 2% loading fee for each year over 35, e.g. a 39 year old will be charged 10% more for their health insurance cover by all insurers from that date forward.  All existing members and those who join before the 30th April deadline will not be affected by this measure.  The purpose of this legislation is to make healthcare more equitable in terms of rewarding those who join early.  At present, a 24 year old who pays into the system for 30 years and never claims is treated the exact same as a 54 year old who joins today.

Employers who are considering introducing healthcare benefits should do so before 30th April to avoid additional costs.  For those who have existing schemes in place, they need to consider the cost implications of this new measure especially if they are planning to expand their operation and recruit additional staff.