EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health
Private Health Insurance (Complaints Levy) Act 1995
Private Health Insurance (Complaints Levy) Amendment Rules 2012
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 2012 (the Amending Rules) commence on 22 November 2012 or, if the Amending Rules are registered after
22 November 2012, 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 (PHIO). 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 2013. This amendment is required to match the budgeted amount for the PHIO that was announced as part of the 2012-13 Budget. The 2012-13 Budget increased appropriation revenues for 2012-13 and subsequent years to support the ongoing operations of the PHIO, recognising increased complaints resolution and increased costs. The amendment results in an increase of $155,000 to the PHIO for 2012-2013.
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.
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLAINTS LEVY) AMENDMENT RULES 2012
1. Name of Rules
Rule 1 provides that the title of the Rules is the Private Health Insurance (Complaints Levy) Amendment Rules 2012 (the Amending Rules).
2. Commencement
Rule 2 provides that the Amending Rules commence on 22 November 2012 or, if the Amending Rules are registered after 22 November 2012, 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:
49,100,000 |
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 49,100,000 to 52,975,000.
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 | 49,100,000 |
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 49,100,000 to 52,975,000.
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT FOR HEALTH AND AGEING
NOVEMBER 2012