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Lifetime Community Rating on Private Health Insurance – what do employers need to do?

Lifetime Community Rating (LCR) on private health insurance will commence on 1st May 2015 – this means that any individual over 35 who has never had private health insurance and wants to buy this after 1st May 2015 will be required to pay a loading up to 20% extra on top of their annual premium. The rationale is to ensure that young people purchase private health insurance before the age of 35, ensuring that there is a better spread of demographics within the health insurance industry in Ireland.

The LCR introduction has profound implications for employers who have opted to pay some or all of their employees’  health insurance. For example, if an employer recuits a new employee on, or after, 1st May 2015, and the employer offers the benefit of paid health insurance, then the employer will have to incur an additional 2 – 20% on top of the normal health insurance cost if that employee has never had private health insurance cover before.

Employers should review their contracts and conditions if they offer any health insurance to employees. With new employees, employers should decide if they are going to incur this additional LCR, or alter their benefits policy accordingly.