What is a restricted health insurance fund?

Chris Stanley

Chris Stanley

Updated 21/04/2021

In this guide, we'll go into detail about restricted health funds vs open health funds to see which type of health fund is better.

What is a restricted health insurance fund?

What is a restricted health insurance fund?

Key Points

  • Restricted health funds are only open to members of a specific group or industry. In many cases, family members are also eligible to join.

  • You are usually able to stay in a restricted fund even if your situation changes; for example, if you or your family member changes industries.

  • Restricted health funds have many positive features, but that doesn't mean they're automatically the best choice.

Restricted health funds vs open health funds

Health funds in Australia must be registered under the Private Health Insurance Act 2007 as either an 'Open' or 'Restricted' organisation.

There are 38 registered health funds.

Of these, 26 are open and 12 are restricted.

Both types of funds are subject to the same regulations under the 2007 Act.

Before we look at the pros and cons of each type, let's take a detailed look at what they are.

Before we look at the pros and cons of each type, let's take a detailed look at what they are.


What is a restricted health fund?

A restricted health fund is a fund that only provides cover to members of a specific group or industry.

You will have to meet certain eligibility criteria to qualify for membership to the fund.

In some cases, cover is also offered to family members of the eligible person.

Restricted health funds are typically operated by industry groups as a not-for-profit enterprise.

Restricted health funds Australia


Restricted to

ACA Health Benefits Fund

Employees or the Seventh-day Adventist church

CBHS Health Fund Limited

Past and present employees of Commonwealth Bank Group, and their families

Defence Health Limited

Past and present members of the ADF, as well as the Defence community and their families

Doctors' Health Fund

Doctors, health practitioners, their employees, and families

Emergency Services Health

Employees of the Emergency Services and their families

Navy Health Ltd

Serving and civilian personnel of ADF, employees of ADF contractors, and their families

Nurses & Midwives Health

Nurses and midwives only

Police Health

Employees of the Police Department and their families

Railway and Transport Health Fund Limited

Transport and electricity employees and relatives

Reserve Bank Health Society Ltd

Past and present Reserve Bank employees

Teachers Health

Education union members and their families

TUH Health Fund

Past and present union members and their families

Most funds allow you to join even if you are no longer a part of the industry.

For example, if you worked for the Reserve Bank in the past but have since left the industry, you are still eligible to join the Reserve Bank fund.

In this case, the same is true for your family.

Family memberships may extend to the following:

  • Partner

  • Children (including adult children)

  • Children's partners

  • Parents

  • Siblings

  • Siblings' partners

  • Siblings' children

  • Grandchildren

If you join a restricted health fund and your situation changes, you are usually permitted to remain in the fund.


You won't be asked to leave if your brother leaves the police force, or if you leave your position with the Seventh-Day Adventist Church.

However, you should always check the rules of a specific fund before making any assumptions.

Open health funds

An open health fund offers memberships to the general public.

You do not have to be a member of a specific organisation or work in any particular industry to qualify.

Open health funds can be either not for profit or for-profit organisations.

You are probably familiar with many open health funds, like Bupa, HCF, NIB, and Australian Unity.

Examples of smaller regional focused health funds include Westfund and CDH.

More than 95% of health insurance policy holders belong to Open Health Funds.


Are restricted health funds better?

There is no simple answer to this question.

Whilst restricted funds can sometimes appear to have modestly lower premiums, because they are typically much smaller they have a narrower range of policies and may be less likely to have arrangements with Doctors and Allied Health professionals that reduces gaps for members.

Restricted funds may also be more exposed to market changes, including government reforms and sometimes respond with premium increases that are significantly higher than the industry average.

Choosing between restricted and open health funds

If you have access to a restricted health fund, you should consider it as an option.

However, don't assume that it is automatically the better option.

Although restricted health funds may have advantages, it's still important to look into the finer details.

Price is not the only feature to take into account, though it something to keep in mind.

Here are some of the questions to ask yourself when choosing between restricted and open health funds:

  • Does it offer the type of coverage I'm looking for?

  • Does it have a member network? If so, which providers are included?

  • What will my out-of-pocket costs be?

  • Am I likely to use the features I'm paying for?

  • What are my monthly premiums?

  • What are the eligibility requirements?

  • Will I still be eligible if my circumstances change?

Compare policies to determine whether or not a restricted fund offers you the most value.

If you do decide to join, remember to review your policy at least every 2 years.

Competition in the health insurance industry is fierce, which means that great new deals often become available.

Comparing policies is quick and easy.

It only takes a few minutes to find out if your policy is still competitive, or if it's time to switch to a better one.


This guide is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.

Chris Stanley is the sales & operations manager of health insurance at Compare Club. With extensive experience and expertise, Chris is a trusted leader known for his deep understanding of health insurance markets, policies, and coverage options. As the sales & operations manager of health insurance, Chris leads a team of dedicated professionals committed to helping individuals and families make informed decisions about their health insurance needs.

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Chris Stanley

Sales & Operations Manager for Health Insurance