Private Health Insurance (Complaints Levy) Rules 2016

EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Health and Aged Care

Private Health Insurance (Complaints Levy) Act 1995

Private Health Insurance (Complaints Levy) Rules 2016

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 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) Rules 2016 (the Rules) repeal and replace the Private Health Insurance (Complaints Levy) Rules 2007 (the Previous Rules) to alter the rate of Complaints Levy payable.

The purpose of the Complaints Levy is to finance the administrative costs of the Private Health Insurance Ombudsman (PHIO). The functions of PHIO are set out at section 20D of the Ombudsman Act 1976. Functions of PHIO include: dealing with complaints, conducting investigations, publishing and reporting information, and making recommendations.  The levy is imposed on private health insurers conducting health insurance business.

The Complaints Levy is collected in accordance with the Private Health Insurance Act 2007 and the Private Health Insurance (Levy Administration) Rules 2015.  The Private Health Insurance (Levy Administration) Rules 2015 specify that the levy is payable on 31st day of December each year.

The Act provides for the Rules to specify the rate of Complaints Levy, the complaints levy days and the census day. 

The Act provides that the rate of Complaints Levy must be based on the number of complying health insurance policies on issue on the census day and may be different for policies under which different numbers of people are insured. The Act also provides that the rate of Complaints Levy must not exceed $0.50 a quarter in respect of complying health insurance policies under which only one person is insured and, otherwise, $1.00 a quarter.

The rate of Complaints Levy is also based on the expected administrative costs of the PHIO for the financial year. 

The amount of Complaints Levy payable by a particular insurer will be based on the rate of levy and the number and type of policies on issue by that insurer on the census day.

The changes incorporated into the Rules include: a new rate of levy; additional notes; and reordering of sections. 

Details of the Rules are set out in the Attachment.

The Rules commence on the day following their registration on the Federal Register of Legislation.

Consultation

Private health insurers are aware that the Complaints Levy amount they are required to pay changes from year to year, according to changes in the number of policies that private health insurers hold and increases/decreases in the expected administrative costs of the PHIO.  Consequently, no consultation occurred in relation to these changes.

This Instrument is a legislative instrument for the purposes of the Legislation Act 2003.

ATTACHMENT

DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLAINTS LEVY) RULES 2016

1. Name of Rules

Rule 1 provides that the title of the Rules is the Private Health Insurance (Complaints Levy) Rules 2016 (the Rules).

2.             Commencement

The Rules commence on the day after they are registered on the Federal Register of Legislation.

3.             Repeal

Rule 3 repeals the Private Health Insurance (Complaints Levy) Rules 2007.

4.             Authority

Rule 4 provides that the Rules are made under section 8 of the Private Health Insurance (Complaints Levy) Act 1995. 

5.             Definitions

Rule 5 provides definitions for the Rules.

• A single policy is defined as a policy under which only one person is insured.
• A joint policy is defined as a policy under which two or more persons are insured.
• The total number of single policies is defined as the number of single policies on issue from all private health insurers on the census day. 
• The total number of joint policies is defined as the number of all joint policies on issue from all private health insurers on the census day. 

6.             Census day

Rule 6 provides that the census day is the 30 June last occurring before the day on which the levy is payable.  This is unchanged from the day specified in Rule 8 of the Previous Rules.

Note 1 to rule 6 provides that the rate of levy is based on the number of complying health insurance policies on issue from private health insurers on the census day. Note 2 to rule 6 provides that the Private Health Insurance (Levy Administration) Rules specify the payment day.

7.             Complaints levy day

Rule 7 specifies that the complaints levy day is 1 October each financial year. This is unchanged from the day specified in paragraph 4(a) of the Previous Rules as the complaints levy day for all financial years from the year commencing 1 July 2016.

8.             Rate of levy for a single policy

Rule 8 provides that the rate of complaints levy for a single policy on issue from an insurer on the census day is calculated using the formula:

Subrule (2) provides that if the rate of levy calculated for a single policy on issue from an insurer is more than $0.50, the rate for the policy is $0.50.

9.             Rate of levy for a joint policy

Rule 9 provides that the rate of complaints levy for a joint policy on issue from an insurer on the census day is calculated using the formula:

Subrule (2) provides that if the rate of levy calculated for a joint policy on issue from an insurer is more than $1.00, the rate for the policy is $1.00.

SUSSAN LEY

MINISTER FOR HEALTH AND AGED CARE

2016

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Private Health Insurance (Complaints Levy) Amendment Rules 2016

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Private Health Insurance (Complaints Levy) Rules 2016 (the Rules) specify the days on which the Complaints Levy is imposed, and the rate at which it is imposed, for the purposes of the Private Health Insurance (Complaints Levy) Act 1995 (the Act).  The purpose of the complaints levy is to finance the administrative costs of the Private Health Insurance Ombudsman (PHIO). 

The changes incorporated into the Rules include: a new rate of levy; additional notes; and reordering of sections. 

No change has been made to current caps on the maximum Complaints Levy that may be imposed quarterly.

Human rights implications

The Complaints Levy is imposed on private health insurers who conduct health insurance business, not on individuals.  To that extent, the Rules do not engage any of the individual human rights covered by the Human Rights (Parliamentary Scrutiny) Act 2011. 

However, the Complaints Levy funds the operations of the PHIO, which protects the interests of private health insurance consumers.  The PHIO’s work particularly supports consumers in dealing with complaints they have about access to, or administration of, private health insurance policies.  The continued collection of the Complaints Levy at an appropriate level to fund the PHIO is critical to ensure that consumers and health care providers have confidence in the administration of the private health insurance system, particularly through effective complaints management and consumer information services. 

Conclusion

This Legislative Instrument supports the right to health by ensuring the continued funding of the PHIO at appropriate levels.

Sussan Ley

Minister for Health and Aged Care