Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 9)

Administered by Department of Health, Disability and Ageing

Legislation au F2016L01967 Rules Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Issued by the Authority of the Minister for Health

 

Private Health Insurance Act 2007

 

Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 9)

 

Authority

Section 333-20 of the Private Health Insurance Act 2007 (the Act) provides that the Minister may make Private Health Insurance (Benefit Requirements) Rules providing for matters required or permitted by Part 3-3 of the Act, or necessary or convenient to be provided in order to carry out or give effect to Part 3-3 of the Act.

 

The Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 9) (the Amendment Rules) amends Schedule 5 of the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules) which commenced on 1 November 2011.

 

Purpose

The purpose of the amendment to Schedule 5 of the Principal Rules is to update the reference to the new Second Tier Advisory Committee (the Committee) approved list of facilities that are eligible for second-tier default benefits.

 

Background

The Principal Rules, which commenced on 1 November 2011, provide for the minimum benefit requirements for psychiatric, rehabilitation and palliative care and other hospital treatment.  Schedules 1 to 5 of the Principal Rules set out the minimum levels of benefits which are payable for hospital treatment.  Namely, benefits for overnight accommodation (Schedules 1 and 2), same day accommodation (Schedule 3), nursing-home type patients (Schedule 4) and second-tier default benefits (Schedule 5).

 

Schedule 1 categorises MBS item numbers into overnight patient classifications comprising ‘Advanced surgical patient’, ‘Obstetric patient’, ‘Surgical patient’, ‘Psychiatric patient’, ‘Rehabilitation patient’ and ‘Other patients’.  Schedule 3 sets out MBS items for the same day hospital accommodation benefits which are payable for privately insured patients in all states and territories.

 

The minimum benefits payable per night for hospital treatment provided to NHTP in Schedule 4 of the Principal Rules is subject to review and change twice annually, to reflect the indexation applied to the Adult Pension Basic Rate and Maximum Daily Rate of Rental Assistance (Pension and Rental Assistance Rates).  The latest indexation of these rates took effect on 20 September 2016.

 

Schedule 5 of the Principal Rules requires a private health insurer to pay second-tier default benefits for most episodes of hospital treatment provided in private hospital facilities that are specified in Schedule 5 if the private health insurer does not have a negotiated agreement with the hospital.  Schedule 5 sets a higher minimum level of benefit (for overnight treatment and day only treatment provided in specified facilities) than the minimum benefit set for such treatment by Schedules 1, 2 and 3 of the Principal Rules.

 

Details

Details of the Amendment Rules are set out in the Attachment.

 

Documents Incorporated by Reference

The Amendment Rules updates the reference to the latest Second Tier Advisory Committee-approved list. The list of facilities eligible for second tier default benefits is the list existing at the time of this amendment and is published on the Department of Health’s website at

http://www.health.gov.au/internet/main/publishing.nsf/Content/health-phicirculars2016-index1.

 

Consultation

Consultation for changes to Schedule 5 occurred with industry through the Committee, which includes equal representation from both private hospital and private health insurance sectors.  Facilities wishing to be considered for inclusion in Schedule 5 were individually assessed and decided by the Committee. 

 

The Amendment Rules commence on 1 January 2017.

 

The Amendment Rules are a legislative instrument for the purposes of the
Legislation Act 2003.


ATTACHMENT

 

DETAILS OF THE PRIVATE HEALTH INSURANCE (BENEFIT REQUIREMENTS) AMENDMENT RULES 2016 (No. 9)

 

Section 1 Name of Rules

 

Section 1 provides that the title of the Rules is the Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 9) (the Amendment Rules).

 

Section 2 Commencement

 

Section 2 provides that the Amendment Rules are to commence on 1 January 2017.

 

Section 3 Amendment of Private Health Insurance (Benefit Requirements) Rules 2011

 

Section 3 provides that the Schedule of the Amendment Rules amend the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules) which commenced on

1 November 2011.

 

Schedule – Amendments

 

Item 1 – Schedule 5 - Second-tier default benefits, Clause 4 Facilities, subclause (1)  

 

Item 1 of Schedule 5 to the Amendment Rules updates the reference to the latest Second Tier Advisory Committee-approved list. The list of facilities eligible for second tier default benefits is the list existing at the time of this amendment and is published on the Department of Health’s website at http://www.health.gov.au/internet/main/publishing.nsf/Content/health-phicirculars2016-index1.

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overview

The Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 9) were enacted to amend Schedule 5 of the Private Health Insurance (Benefit Requirements) Rules 2011, which commenced on 1 November 2011, and were introduced to update the reference to the latest Second Tier Advisory Committee-approved list of facilities eligible for second-tier default benefits. The Second Tier Advisory Committee comprises equal representation from both private hospital and private health insurance sectors, and facilities are individually assessed and decided by the Committee for inclusion in Schedule 5. This amendment ensures that the list of facilities eligible for second-tier default benefits is current and reflects the most recent decisions of the Committee. The Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 9) were made by the Minister for Health under the authority of Section 333-20 of the Private Health Insurance Act 2007, and the purpose of the amendment is to ensure that the minimum benefit requirements for psychiatric, rehabilitation and palliative care and other hospital treatment are up to date and reflect the latest decisions of the Second Tier Advisory Committee. These rules are a legislative instrument for the purposes of the Legislation Act 2003 and commence on 1 January 2017.

Scope and Application

The Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 9) amends the Private Health Insurance (Benefit Requirements) Rules 2011, which set out the minimum levels of benefits that private health insurers must provide for various types of hospital treatment. Specifically, the amendment updates the list of facilities eligible for second-tier default benefits, which are higher minimum levels of benefits for overnight and day-only treatment in certain facilities, in the absence of a negotiated agreement with the hospital. These rules apply to all private health insurers operating in Australia, as the Act governs the private health insurance industry nationally. The amendment to Schedule 5 incorporates the latest list of facilities approved by the Second Tier Advisory Committee, reflecting the ongoing need to keep benefit requirements current and relevant. These changes do not introduce new substantive requirements but update the existing framework to ensure that the benefits provided remain appropriate and reflective of current standards and practices in the private health sector. The rules are intended to maintain a balance between ensuring adequate coverage for policyholders and keeping the costs of private health insurance manageable.

Key Provisions

The Private Health Insurance (Benefit Requirements) Amendment Rules 2016 (No. 9) (the Amendment Rules) primarily amend Schedule 5 of the Private Health Insurance (Benefit Requirements) Rules 2011 (the Principal Rules). Specifically, the Amendment Rules update the reference to the latest Second Tier Advisory Committee (the Committee) approved list of facilities eligible for second-tier default benefits. The Second-tier default benefits, outlined in Schedule 5, are the higher minimum levels of benefits payable for overnight treatment and day-only treatment provided in specified facilities, compared to the minimum benefits set by Schedules 1, 2, and 3 of the Principal Rules. The Amendment Rules impose specific obligations on private health insurers. Under these rules, private health insurers are required to pay second-tier default benefits for most episodes of hospital treatment provided in private hospital facilities listed in Schedule 5, unless they have a negotiated agreement with the hospital. The facilities are assessed and approved by the Committee, which includes equal representation from both the private hospital and private health insurance sectors. These insurers must adhere to the updated list of facilities eligible for second-tier default benefits, which is published on the Department of Health’s website. Breach of the provisions in the Amendment Rules may result in civil or criminal consequences, though the specific penalties are not detailed within the explanatory statement. However, general provisions under the Private Health Insurance Act 2007 may include fines or other penalties for non-compliance. The exact penalties would depend on the nature and severity of the breach and could be pursued under the broader legislative framework of the Act. Compliance with these rules is critical for insurers to ensure they are meeting the minimum benefit requirements for their policyholders.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.