‘Strange’ health cover call adds €30 to families’ bills

A ‘strange’ move that will add €30 to an average family’s health insurance bills during a cost-of-living crisis – and could even be the thin end of the wedge for further hikes.

That’s how health insurance expert Dermot Goode, below, described the Revenue Commissioners’ decision to reduce tax relief on all Laya and Irish Life Health policies – but not for the State-owned VHI – from January 1.

It was apparently brought in because some insurance policies offer nonhealth benefits that are not in line with legislation on tax relief, which says it should be focused on medical expenses.

Some Irish Life policies, for example, include a small amount of money-back on gym membership and Fitbits, while certain Laya policies have cover for a health coach. Yet VHI, which advertises discounts on gym memberships as a benefit of some of its policies, was excluded from the measure!

A huge number of Laya and Irish Life Health customers derive no ‘nonmedical’ benefits whatsoever from their plans.

Yet they will all apparently be hit by a reduction in tax relief that further jacks up the cost of health insurance.

‘It comes at the worst possible time and it means for a family of two adults and two children it’s another €30 [for an average policy costing €1,200],’ Mr Goode said.

It may even get worse, as the calculation of nonmedical expenses was made in the aftermath of Covid-19 and could be calculated at a higher level when the postpandemic fall-off in claims washes out of the system.

Promoting health measures makes a lot of sense. Will Fitbits, gym membership and health coaching – all very positive developments in my view – now disappear from the list of benefits?