What Is Lifetime Community Rating In Ireland? 2025 Guide

Wondering what’s the deal with Lifetime Community Rating (LCR) in Ireland? 

LCR can significantly impact your employees' private health insurance premiums, especially if they enrol later in life. The Irish government introduced it on 1st May 2015 to ensure a balanced and sustainable health insurance system. 

We’ll break down LCR to help you understand why it exists and how it affects your employees' health insurance decisions. 

Further Reading:

• Discover Private Health Insurance in Ireland and how it can give your employees access to quality healthcare.   

• Learn how Ireland’s Auto Enrolment Pensions scheme operates and what it means for your business.

What Is Lifetime Community Rating?

Lifetime Community Rating (LCR) is an Irish health insurance policy that encourages people to take out private health insurance at a younger age and retain continuous coverage. 

Under LCR, if your employee is 35 or older when they first take out private health insurance, they must pay an additional charge on their policy’s gross cost (aka gross premium or premium).

This extra charge is known as LCR loading or late entry loading. 

Your employees don’t have to pay the load if they bought health insurance before turning 35.

What Is the LCR Loading?

Each year, your employee is over 34 (i.e., 35 or older) and doesn’t have health insurance, they must pay an extra 2% of their policy’s gross cost once they get insurance. 

The loading is mandatory, and insurers will apply it to inpatient policies covering medical treatment requiring hospitalisation.

The insurer will apply the loading each year for ten consecutive years. After these ten years, your employee will pay the standard rate for their health insurance plan.

How Can Your Employees Calculate Their Lifetime Community Rating Loading?

Your employees can use the following formula to calculate their late entry loading:

LCR Loading = (Age at Entry - Threshold Age) x 2% , where:

• Age at Entry is when they first take out private health insurance. It’s not their current age. 

• The threshold Age is 34 years (as of January 2025). 

For example: 

Suppose your employee is 37 when signing up for private health insurance. Their gross premium is €1500/year (before any tax relief or subsidies):

• Their LCR loading = (37-34) x 2% = 6%

•  6% of €1500 = €90

• Gross premium (after loading) = 1500 + 90 = €1590

Note: Depending on their life circumstances, they may receive credits that reduce their loading level or even be exempt from paying it. We’ll explore this later. 

What Is the Maximum LCR Loading?

The maximum loading is 70%, which applies when your employees are 69 (or older) and purchase health insurance for the first time. 

Even if they first take out health insurance at 75, the maximum loading would still be 70%. This cap is in place to avoid overly penalising those who enrol at a much later age.

Don’t want your employees worrying about calculating their LCR loading?

Provide them with clear guidance on LCR loading applicable from 34 to 69+.

Why Was LCR Introduced in Ireland?

Ireland introduced LCR as an answer to various issues with its health insurance policy — Community Rating. LCR doesn’t replace Community Rating; it just adds to it.  

Let’s dig deeper into this: 

What Is Community Rating in Ireland?

Community Rating is a health insurance policy where everyone pays the same premium for a certain level of health insurance coverage, regardless of individual factors like age, health or gender — with exceptions for children, young adults (18-25 years), and some group schemes.

It aims to give everyone fair access to health insurance.

How Community Rating Works

The health insurance premiums are based on collective risk, balancing costs between lower-risk individuals (typically younger, healthier) and higher-risk individuals (older or with health issues). 

As low-risk individuals usually make fewer claims, their premiums support the higher costs of others, maintaining a cost-effective balance. 

So, a steady flow of younger people into the system is vital for its sustainability and affordability.

And that’s where the problem lies.  

The Issues with Community Rating

In a community-rated system, a healthy 27-year-old and a 60-year-old with chronic conditions pay the same premium for the same health plan. 

This can deter young, healthy individuals from buying insurance early, as they pay the same as those more likely to claim, leading them to delay purchasing. 

Consequently, the insurance pool risks being skewed towards older or unhealthier individuals, increasing claim frequencies. 

To manage rising costs, insurers might have to increase premiums for all — making health insurance more expensive.

How LCR Solves the Issues with Community Rating

Here’s how LCR solves both the problems with Community Rating:

• LCR's higher premiums for late enrollees encourage early purchase, bringing more low-risk individuals into the pool. 

• This balance of young and old policyholders evenly distributes risk and keeps premiums stable and affordable, ensuring Community Rating’s sustainability.

Exemptions & Credits for Employees Within Lifetime Community Rating

The Lifetime Community Rating system offers exemptions and credits, impacting your employees’ health insurance loading. 

Credits reduce your employees’ effective "age at entry," lowering the late entry loading. 

These adjustments cater to circumstances like losing a job, returning to Ireland after living abroad, etc. 

Let’s explore various situations to understand employee exemptions and credits:  

A. Your Employees Had Health Insurance Coverage Previously

If your employees previously held private health insurance as an adults, insurers factor in this coverage history to potentially reduce loading. 

Additionally, a gap of up to 13 weeks in their insurance won’t incur LCR loadings when they rejoin the private health insurance market.   

Case 1: Your Employee is 50 years old and doesn’t have health insurance. But they previously had coverage (without gaps) for six years as an adult.

The insurer will deduct these six years from your employee’s age at entry to determine their loading:

• Chronological age = 50 years

• Prior cover = 6 years

• Age at entry = 50-6 = 44 years

• LCR loading = (44-34) x 2 = 20% 

So they’ll pay the same loading as if they first took health insurance at 44.

Case 2: The employee was covered under their parent’s insurance policy as a child

Generally, your employee’s private health insurance coverage as a child won’t give them credits. 

However, some policies may include provisions for paying children under full adult rates. This might qualify for credits, so ask them to check with their insurance provider.  

Case 3: The employee had a health cash plan

Health cash plans only cover routine medical expenses like GP visits, dental care, etc. 

As they don’t provide inpatient cover, they aren’t subject to LCR loading and won’t give your employees any credits. 

Case 4: Employee gave up health insurance because they were made redundant at work

Your employees may be eligible for credits for up to three years provided they have been:

• Unemployed for at least six months since 1st January 2008, and

• Receiving social welfare payments or being financially dependent on someone who has — since they became unemployed. 

For example, suppose your employee is 65 years old and had prior cover for ten years before losing their job in 2012. They may also qualify for two years of credits. 

Here’s the loading calculation:

• Chronological age = 65 years

• Prior cover = 10 years

• Unemployment credits = 2

• Age at entry = 65 - 10 - 2 = 53 

• LCR Loading = (53-34) x 2 = 38%

Case 5: Your employee cancelled their private health insurance for other reasons

Your employees will get credits for any uninsured period on or after 1st February 2019 if they meet both the following conditions — regardless of why they cancelled health insurance:

• They had prior coverage for at least three years. These needn’t have been consecutive periods, but they should check with their insurer.

• They cancelled their health insurance coverage for at least six months. 

• The maximum credit is for three years, which can be one or more periods of six months or more.

Case 6: At 30, your employee chose a low-cost health plan, maintaining coverage to dodge LCR loading. Now, at 40, they’re eyeing a better plan upgrade.

Your employees won’t face loading as they enrolled in private health insurance before the threshold age. 

However, when upgrading to a higher level of cover, they may need to serve a waiting period (maximum two years) before those enhanced benefits kick in.

B. Your Employee Is a Returning Expatriate or a New Resident in Ireland

Your employees' LCR loading depends on their time spent abroad and whether Ireland will be their primary residence. 

To verify this, insurers may ask for:

• Evidence for the time spent abroad: Foreign rental agreements, utility bills, bank statements, visa, etc.

• Evidence for their date of arrival in Ireland: Visa, passport, flight tickets, etc.

• Evidence of a principal residence: Property purchase/rental agreements, tax receipts, work contracts, etc. 

The good news?

If your employees lived abroad on 1st May 2015 and later moved to Ireland, they won’t face loading if they buy health insurance within nine months of making Ireland their principal residence. 

But this is a one-time opportunity. 

Once availed, the grace period won’t be available if they move abroad again (for at least a year) and return to Ireland for another period of principal residence.

However, your employee may be eligible for credit periods, which can reduce the LCR loading that might apply upon their return. 

Typically, credited periods include: 

• Time spent abroad.

• Times when they previously had health insurance — either in Ireland or another country.

Let’s look at two cases:

Case 1: Employees move back to Ireland after six months or more abroad

Whether your employees qualify for a credited period depends on how they answer these questions:

• Were they living in Ireland on 1st May 2015? 

• Did they move abroad on or after 1st November 2018?

• Did they live abroad for at least six months?

If your employees answered yes to all three questions, they’ll get credit for the time spent abroad. They won’t have to pay loading on this credited period if they apply for health insurance within nine months of making Ireland their principal residence again.  

Case 2: Employees move back to Ireland after their second period abroad

If your employees move abroad and return a second time, they may receive credit for:

• The credited period they spent abroad the first time.

• Any qualified credited periods they had health insurance in Ireland.

However, your employees won’t receive credit for their second period abroad. 

For example, if your employee:

• Moved to Sweden for three years in 2020.

• Returned to Ireland and applied for health insurance within nine months, receiving credit.

• Spent two years in Ireland, then moved back to Sweden for a year.

• Returned to Ireland and applied for health insurance again.

Upon their return, they’d receive credit for the first three years in Sweden and the two years they had health insurance in Ireland, but not for the year they spent in Sweden the second time.

C. Your Employees Belong to Special Groups (JSIS & PDF)

If your employees belong to Ireland’s Permanent Defence Force (PDF) or the European Union’s Joint Sickness Insurance Scheme (JSIS), they won’t face loading if they buy health insurance within nine months of leaving the force/scheme. 

D. Your Employees Are Switching Insurers  

Your workers don’t have to pay additional LCR loading when switching health insurance providers in Ireland if they have no break in coverage for more than 13 weeks. 

Remember: Your employees' loading is tied to their personal insurance history, not to the specific insurer. So, if they pay loading to one insurer and decide to switch to another, the new insurer will apply the same loading. 

How Lifetime Community Rating Affects Your Team’s Health Insurance

If you are an Irish employer and offer private health insurance to your employees, the LCR principles discussed above still apply.  

Employees joining your company plan would be subject to LCR based on their personal insurance history.

If a loading is applicable, who pays for it?

Typically, you’ll have to pay the entire premium, including any LCR loading. 

What about BIK and TRS? 

• Benefit-in-Kind (BIK): It refers to non-cash employee benefits that have monetary value, such as health insurance. 

• Tax Relief at Source (TRS): TRS allows for tax relief on health insurance premiums at the source, meaning the relief is granted at the point of payment. This relief is typically set at 20% of the total premium for health insurance. However, the TRS for Irish Life Health customers was reduced to 19% in January 2024 and will remain unchanged in 2025.

Your employee may face a higher BIK because the value of the health insurance benefit, including the loading, is added to their taxable income. 

This can be negligible for most people — considering the coverage and peace of mind they get from employer-sponsored health insurance. 

On the other hand, the insurer applies TRS to health insurance premiums at the point of sale, reducing your premium amount. Since TRS is already factored in, the BIK is calculated on the net premium (after TRS).

Check with your company's insurance provider for the exact BIK and TRS break-up. 

Manage Employee Health Insurance With Kota

Want to offer private health insurance to your employees?

Meet Kota! 

Kota is an employee benefits platform that partners with Irish Life Health to simplify health insurance for companies. Just set your budget, register your employees, and they can choose the plans that best fit their needs. 

For those under 35 seeking an affordable solution to bypass LCR loadings, our Kick-off Plan ILH (starts from approx. €63.55/mo) could be a great option.

Check out the other Irish Life Health health insurance plans we offer in Ireland. 

Kota doesn’t apply LCR loading — only insurance providers, like Irish Life Health, do. However, you can see the loading applied to your employees’ premium within the Kota app.