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 2010
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 2010 (the Amending Rules) commence on 1 December 2010 or, if the Amending Rules are registered after 1 December 2010, 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 2011.
Details of the Amending Rules to effect this formula adjustment are set out in the Attachment.
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. 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
DECEMBER 2010
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLAINTS LEVY) AMENDMENT RULES 2010
1. Name of Rules
Rule 1 provides that the title of the Rules is the Private Health Insurance (Complaints Levy) Amendment Rules 2010 (the Amending Rules).
2. Commencement
Rule 2 provides that the Amending Rules commence on 1 December 2010 or, if the Amending Rules are registered after 1 December 2010, 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:
47,950,000 |
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 47,950,000 to 49,100,000.
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 | 47,950,000 |
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 47,950,000 to 49,100,000.
Overview
The Private Health Insurance (Complaints Levy) Amendment Rules 2010 were introduced to amend the existing Private Health Insurance (Complaints Levy) Rules 2007 under the Private Health Insurance (Complaints Levy) Act 1995. These amendments were made to adjust the formula used for calculating the complaints levy imposed on private health insurers to support the operations of the Private Health Insurance Ombudsman. The rules were enacted by the Minister for Health and Ageing and aim to ensure that the levy remains aligned with the changes in policyholder data and the number of policies held by insurers. The Amending Rules took effect on 1 December 2010 or the day following their registration on the Federal Register of Legislative Instruments, if later. The changes to the formula for calculating the levy were considered minor and administrative in nature, hence no consultation was undertaken prior to their implementation.
Scope and Application
The Private Health Insurance (Complaints Levy) Amendment Rules 2010 are subordinate legislation that extend the application of the Private Health Insurance (Complaints Levy) Act 1995 by altering the formulae used to calculate the complaints levy imposed on private health insurers. The Act applies to private health insurers who must pay a levy to support the work of the Private Health Insurance Ombudsman. The levy is calculated annually based on policy holder data from insurers and is collected in accordance with the Private Health Insurance Act 2007 and the Rules. The Amending Rules specifically adjust the numerator in the formulae used for calculating the levy for single and joint coverage policies for the financial year ending 30 June 2011, increasing the levy rate. These changes are made without consultation as they are considered minor adjustments. The Amending Rules apply nationally across Australia, reflecting the federal nature of the private health insurance framework.
Key Provisions
The Private Health Insurance (Complaints Levy) Amendment Rules 2010 modify the existing Private Health Insurance (Complaints Levy) Rules 2007, introducing changes to the formula used for calculating the complaints levy for private health insurers (Rule 3). Specifically, Rule 6, as amended, adjusts the rate for a single coverage policy from 47,950,000 to 49,100,000, and Rule 7 similarly adjusts the rate for a joint coverage policy (Item 1 and Item 2). These changes are designed to increase the complaints levy for the financial year ending 30 June 2011, impacting how much insurers must contribute towards supporting the work of the Private Health Insurance Ombudsman.
The rules impose obligations on private health insurers to accurately calculate the complaints levy based on the amended formulas. Insurers must ensure they use the correct numerators in their calculations for single and joint coverage policies as specified in the amended rules (Rules 6 and 7). They must also report these calculations to the relevant authorities in a timely manner, ensuring compliance with the amended rules and the overarching objectives of the Private Health Insurance (Complaints Levy) Act 1995.
Breaches of the amended rules or failure to comply with the obligations outlined in the rules could lead to various consequences. While the explanatory statement does not explicitly detail specific penalties or consequences for non-compliance, under the Private Health Insurance Act 2007, insurers may face enforcement actions from the Australian Prudential Regulation Authority (APRA) or other regulatory bodies. Penalties may include fines or other administrative actions deemed necessary to enforce compliance. It is essential for insurers to adhere to the amended rules to avoid any potential repercussions.