# Help please, question re health insurannce and MLS



## nicol_r (Jul 6, 2011)

Hi all, I've recently arrived in Sydney on a 457 visa. I've taken out IMAN health insurance for overseas visitors and also hold Medicare reciprocal (yellow) benefits card. I'm unable to find anywhere details of what my hospital cover excess payments are. I've been advised by IMAN that I do not have sufficient hospital cover to avoid the Medicare Levy Surcharge (MLS) of 1% of earnings. It seems to me they are manipulating the meanings to sell on additional insurance that they say is required to avoid MLS. Has anyone else come across this and could advise which 457 cover does provide elgibility to avoid MLS?


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## _Sarah_ (Jun 27, 2011)

I'm not sure, it's not worth it to pay heaps for private health insurance in order to avoid the MLS. My family has private health insurance and both my parents still pay the MLS and my father earns lots of money, has great private health insurance and he still pays the MLS. Find out how much you have to pay to upgrade your insurance to avoid the MLS, if it's a ridiculous price then it's not worth it - just pay the surcharge.


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## nicol_r (Jul 6, 2011)

*Update from insurers*



nicol_r said:


> Hi all, I've recently arrived in Sydney on a 457 visa. I've taken out IMAN health insurance for overseas visitors and also hold Medicare reciprocal (yellow) benefits card. I'm unable to find anywhere details of what my hospital cover excess payments are. I've been advised by IMAN that I do not have sufficient hospital cover to avoid the Medicare Levy Surcharge (MLS) of 1% of earnings. It seems to me they are manipulating the meanings to sell on additional insurance that they say is required to avoid MLS. Has anyone else come across this and could advise which 457 cover does provide elgibility to avoid MLS?


I've spoken to my insurers this morning to see how this works. The MLS is some kind of loophole that requires 457 holders who hold private/public medical insurance, and who (in 2011/12) earn more than $80K as a single person, or $160K between a couple, to pay 1% of their earnings to help subsidise the Medicare public hospital system. As a way of escaping this you can take out public hospital insurance, which although you hold you cannot claim against as you also hold superior public/private hospital cover. All very messy, but at $543 per annum (reduced by State subsidy of 30% as UK citizens hold reciprocal Medicare cover) it is way less than what 1% of my earnings would be, so a reasonable spend to save measure.


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## JimTheChef (Sep 14, 2011)

*Avoiding MLS for Brits on a 457 Visas, and general thoughts on Health Insurance*

Hi
I am British and moved across from the UK to Brisbane on a 457 visa in July 2011. I had a similar confusing experience to Nicol when looking into Health Insurance and avoiding MLS. I spent a while looking in to this so thought I would share what found, to try and help others save some time! Apologies for the long post.

I earn above the MLS threshold (80k individual or 160k joint earnings) and was advised by an accountant that I could avoid the 1% Medicare Levy Surcharge (MLS) by taking out a suitable health insurance policy - but this is not really true! Avoiding MLS is an important consideration for Australian residents, as it essentially gives a significant discount on a private health insurance policy. However, although I am an Australian 'resident' for tax purposes, I am only a 'temporary resident' for immigration purposes, and hence I can only obtain Overseas Visitor Health Care (OVHC) policies for health insurance.

Although they may give a high level of healthcare cover "Overseas Visitors Health Plans or Insurance Policies are not classified as 'appropriate' Private Health Insurance for MLS exemption purposes. Even if you take out OVHC, it WILL NOT exempt you from the Medicare Levy Surcharge" (this is from the IMAN/Austhealth website, privatehealthDOTgovDOTau also confirms this, see links below). 

However, as Nicol says in her post, the MLS can be avoided by taking out a "public hospital cover" policy such as Bupa ‘reciprocal health cover’ or Medicare ‘residential cover’. These policies will give NO healthcare benefits (only Australian Residents can claim on them), but apparently will give an overseas visitor exemption from MLS. The cost is around $1,000 to $1,500, so it is probably worthwhile for someone earning above the MLS limit. Nicol - can you tell me which insurer quoted you $543? I haven't bought my policy yet and this sounds like a very good deal to me.

I did find one provider (HBF) who said their policy covered people on 457s and gave MLS exemption, but it was extremely expensive ($6000 p.a. for a couple) and gave only basic hospital cover. I am suspicious of this claim as PrivateHealthDOTgovDOTau says any OVHC should not give MLS exemption.

On a separate note - my personal conclusion was that as a Brit with a Reciprocal Medicare card it was not worthwhile taking out private healthcare insurance. The OVHC policies are very expensive when compared to the prices for Australian residents, there are significant excesses to pay, waiting times for new members, and if you opt for private treatment most policies will only cover a percentage of the costs leaving you seriously out of pocket. My impression was that you live near a decent public hospital (just go and ask your GP about this) then Medicare is the best option. They say it only covers "Emergency treatment" or "anything medically necessary" but the list of what's covered isn't far off what you get on the NHS at home - even ultrasounds are covered. Also, as we live in Queensland the Ambulances are free - if you live in another state you may want to consider taking out ambulance cover.

Some further information (for links change "DOT" for "." and ">" for "/"):
PrivatehealthDOTgovDOTau>healthinsurance>incentivessurcharges>mlsDOThtm Government website confirming that OVHC will not provide MLS exemption. See last paragraph.
austhealthDOTcom>Reciprocal_levy_surchargeDOTphp IMAN Australian Health Plans - Health Plans for Temporary Residents Working in Australia[/url] IMAN/Austhealth website - states that any Overseas Visitors Health Plans will not provide MLS exemption.
Medibank, Bupa, HBA, MBF, NIB, IMAN and ANZ all confirmed to me via telephone that the only usable health insurance they could sell someone on a 457 visa (OVHC) would not provide MLS exemption.
atoDOTgovDOTau>individuals>contentDOTaspx?doc=/content/00250854DOThtm&page=11 The Tax Office explain on this website what constitutes an ‘appropriate level of cover’ for MLS exemption. OVHC policies clearly meet these requirements, so should give the exemption! I phoned the Australian Tax Office twice, and spoke to 2 different ‘experts’ to find out more. They were shockingly unaware of basic tax policy, and completely useless on the subject of MLS for people on 457 visas.

Also note that holding a Reciprocal Medicare card is sufficient to meet the health care requirements of the 457 visa, so you do not have buy private health insurance if you choose not to.

Cheers
Jim the Chef (Capt.)


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