The E111 entitles British holidaymakers to free or reduced-cost medical care in all European Union countries as well as Iceland, Liechtenstein, Norway and Sweden.

The form is available free of charge from your local post office and can be downloaded from the internet at http://www.dh.gov.uk/travellers.

Travellers already in possession of an E111 form will need to apply for a new one this year – the old one became invalid at the end of 2004.

The main difference between the old and new forms is that the new one is issued on an individual, not a family, basis. The new E111 is a transitional document, valid only to the end of 2005. It is being replaced by the European Health Insurance Card, or EHIC.

The card will not hold any electronic or clinical data – just your name, date of birth and an identification number – and will be valid for up to five years. It will entitle you to the same benefits as the E111.

But before heading off on holiday with your E111 (or EHIC), bear in mind that neither should be regarded as a substitute for travel insurance.

Areas of cover provided by travel insurance but not by the E111 include: money, possessions, cancellations, personal liability, expenses for others travelling with you if you're kept in hospital, mountain rescue from ski slopes and repatriation back to Britain in the event of a serious illness or accident (this last cost can run to five-figure sums). Also, the E111, unlike travel insurance, will not usually cover private medical treatment, which may be the only viable option.

In parts of Spain, for example, you often have to travel a long way to find a surgery operated within the state health service. At the same time, state-provided treatment in many EU countries does not cover all the things you would expect to receive without payment on the NHS. For example, in France, you have to pay around 25 per cent of hospital fees and 30 per cent of doctors' and dentists' fees. In Switzerland, you have to meet half the costs of using an ambulance.

The E111 can save money, too. Many travel insurers will waive the excess (the part of a claim that you have to pay – as much as £75) if you have an E111, since the insurers may then be able to recover some of their costs.

Finally, the E111 covers treatment for chronic or pre-existing illnesses (as long as your reason for going abroad was not to get treatment for that illness). In contrast, travel insurers will often refuse to cover pre-existing conditions or charge huge premiums for them.

As of the 1st January 2006 E111 are no longer valid and have since been replaced by the European Health Insurance Card (EHIC).

The EHIC can be used in any European country and covers the individual for any necessary medical treatment arising from an accident or illness whilst travelling within the European Economic Area (EEA).

If you would like further information on the EHIC, find out what the EHIC covers, who can apply and how to apply for an EHIC you can find all the details you’ll need on the EHIC Information Services website

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