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Is a corporate health insurance policy only valid while working?

25 March 2020 - 3:49pm

There may be periods in your life when working isn't possible. You could be forced to take an extended unpaid leave to care for an ill family member, or take maternity leave to care for a new baby. If your employer provides access to or subsidises private health cover for employees, you may wonder, "Is my corporate health insurance policy still valid if I'm not working?"

The answer depends on a multitude of factors.

Employer subsidised cover

If your employer pays for your private health insurance policy, they may be willing to continue to maintain the cover even while you are not working, but cover is by no means guaranteed. If you end up having to take a lengthy unexpected leave due to injury, illness or other reasons, it's best to sit down with your employer as soon as possible and discuss options. You don't want to lose your family's health insurance if you enter a period of non-work.

Employee paid cover

If your employer offers corporate health insurance but you are the one who pays the premiums, then they are deducted out of your paycheque. As long as you are getting paid or you have sufficient funds in your account, the policy should be in force. If you go on maternity leave, are eligible for Government subsidised Paid Parental Leave and your employer administers it, your deductions will continue as usual, and you can maintain your cover even if you don't work for many weeks.

However, if you go on extended unpaid leave, your corporate health insurance policy may not remain valid if your premiums are paid through your salary. You should discuss this possibility with your employer and find out if you can make contribution payments directly to the insurer.

Your corporate cover may also be affected if you stop working because you have given your notice or been fired. In both cases, it again comes down to who pays for the cover. If your employer pays the premiums, your cover should stay valid for the time period covered by the last payment they make - which should be paid as usual if it falls inside the notice period. If you directly pay your cover, it should continue until the end of the last coverage period paid for, through payroll deduction.

Obviously, there are many possible situations in which your corporate health insurance might come into question if you are not working. If you are concerned that your corporate health insurance benefits could cease while you are not working, contact your employer.

For more information on the intricacies of corporate health insurance, contact HICA today.