EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Private Health Insurance (Complaints Levy) Act 1995
Private Health Insurance (Complaints Levy) Amendment Rules 2008
Section 8 of the Private Health Insurance (Complaints Levy) Act 1995 (the Act) provides that the Minister may make Private Health Insurance (Complaints Levy) Rules (the Rules) providing for matters required or permitted by the Act to be provided, or necessary or convenient to be provided in order to carry out or give effect to the Act.
The Private Health Insurance (Complaints Levy) Amendment Rules 2008 (the Amending Rules) commence on 1 December 2008 or, if the Amending Rules are registered after 1 December 2008, the day following their registration on the Federal Register of Legislative Instruments. The Amending Rules amend the Private Health Insurance (Complaints Levy) Rules 2007.
A complaints levy is imposed upon private health insurers for the purpose of supporting the work of the Private Health Insurance Ombudsman. The levy is collected in accordance with the Private Health Insurance Act 2007 and the Rules.
Rules 6 and 7 of the Rules specify the formula to be used for calculating the complaints levy imposed upon insurers for each single coverage policy and each joint coverage policy respectively in any given year. The formula utilises annual policy holder data from insurers to make these calculations.
The Amending Rules change the formulas to increase the complaints levy for the financial year ending 30 June 2009. It is envisaged that the complaints levy will change on an annual basis for budgetary reasons.
Details of the Amending Rules to effect this formula adjustment are set out in the Attachment.
The Office of Best Practice Regulation has advised that a Regulation Impact Statement is not required.
Consultation
Private health insurers are aware that the complaints levy changes from year to year according to changes in the numerator of the formula and changes in the number of policies that private health insurers hold from year to year. Accordingly, the changes are considered minor and machinery in nature. Consequently, no consultation occurred in relation to these changes.
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT FOR HEALTH AND AGEING
NOVEMBER 2008
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLAINTS LEVY) AMENDMENT RULES 2008
1. Name of Rules
Rule 1 provides that the title of the Rules is the Private Health Insurance (Complaints Levy) Amendment Rules 2008 (the Amending Rules).
2. Commencement
Rule 2 provides that the Amending Rules commence on 1 December 2008 or, if the Amending Rules are registered after 1 December 2008, the day after they are registered on the Federal Register of Legislative Instruments.
3. Amendment of the Private Health Insurance (Complaints Levy) Rules 2007
Rule 3 provides that the Schedule to the Amending Rules amends the Private Health Insurance (Complaints Levy) Rules 2007 (the Rules).
Schedule – Amendments
Item 1 – Subrule 6(1)
Subrule 6(1) provides that the rate for a single policy is the rate in cents calculated using the formula:
47,800,000 |
single coverage policies + (2 × joint coverage policies) |
Item 1 of the Amending Rules amends subrule 6(1) of the Rules by changing the numerator of the formula for calculating single coverage policies from 47,800,000 to 47,950,000.
Item 2 – Subrule 7(1)
Subrule 7(1) provides that the rate for a joint policy is the rate in cents calculated using the following formula:
2 x | 47,800,000 |
single coverage policies + (2 × joint coverage policies) |
Item 2 of the Amending Rules amends subrule 7(1) of the Rules by changing the numerator of the formula for calculating joint coverage policies from 47,800,000 to 47,950,000.
Overview
The Private Health Insurance (Complaints Levy) Amendment Rules 2008 were introduced to modify the formulas used for calculating the complaints levy imposed on private health insurers, as stipulated in the Private Health Insurance (Complaints Levy) Rules 2007. Enacted by the Minister for Health and Ageing, these rules aim to adjust the levy in accordance with the Private Health Insurance Act 2007. The policy objective is to support the work of the Private Health Insurance Ombudsman through a levy collected from insurers based on their policy holder data. These amendments, which are considered minor and procedural, do not require consultation due to their routine nature and are expected to be adjusted annually for budgetary reasons.
Scope and Application
The Private Health Insurance (Complaints Levy) Amendment Rules 2008 amends the existing Private Health Insurance (Complaints Levy) Rules 2007, applying to private health insurers operating in Australia. These rules are designed to modify the formulas used for calculating the complaints levy imposed on insurers for both single and joint coverage policies, as per the Private Health Insurance (Complaints Levy) Act 1995. This levy supports the operations of the Private Health Insurance Ombudsman. The changes to the levy are intended to be annual adjustments, primarily for budgetary purposes, and are implemented through subordinate instruments known as Rules. These amendments came into effect on 1 December 2008, or the day following their registration on the Federal Register of Legislative Instruments if registered after this date. The specific adjustments to the formulas involve minor changes to the numerators used in the calculations, thereby affecting the levy rates for the financial year ending 30 June 2009. Given the nature of these adjustments, no consultation or preparation of a Regulation Impact Statement was deemed necessary.
Key Provisions
The Private Health Insurance (Complaints Levy) Amendment Rules 2008 (the Amending Rules) provide changes to the calculation formulas used to determine the complaints levy for private health insurers, as specified in the Private Health Insurance (Complaints Levy) Rules 2007 (the Rules). Specifically, the Amending Rules adjust the numerators in the formulas for calculating the complaints levy for both single coverage policies (Rule 6) and joint coverage policies (Rule 7). The new numerators are 47,950,000 for single coverage policies and 47,950,000 for joint coverage policies, as detailed in Item 1 and Item 2 respectively of the Schedule to the Amending Rules. These changes are designed to ensure the levy is accurately calculated based on the most recent policy holder data.
The Amending Rules impose specific obligations on private health insurers to comply with the updated formulas for calculating the complaints levy. Insurers must use the revised numerators in their calculations for each policy type for the financial year ending 30 June 2009, as specified in the amended subrules 6(1) and 7(1) of the Rules. This ensures that the levy collected is in line with the updated financial data and policy numbers. Insurers are also required to report their policy numbers accurately and timely to ensure the correct levy is calculated and paid.
Breaches of the requirements set out in the Amending Rules may result in financial penalties or other consequences. Although the explanatory statement does not detail specific penalties, non-compliance with the requirements to accurately calculate and pay the complaints levy could potentially lead to financial penalties under the Private Health Insurance Act 2007. Additionally, failure to comply may result in the levy not being collected in the correct amount, which could impact the funding available to the Private Health Insurance Ombudsman. The precise penalties would depend on the severity and nature of the breach, but they could include fines or other corrective measures to ensure compliance with the levy requirements.