EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Private Health Insurance Act 2007
Private Health Insurance (Complying Product) Amendment Rules 2008 (No.4)
Section 333-20 of the Private Health Insurance Act 2007 (the Act) provides that the Minister may make Private Health Insurance (Complying Product) Rules providing for matters required or permitted by Chapter 3 of 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 (Complying Product) Amendment Rules 2008 (No.4) (the Amendment Rules) commence on 1 January 2009, or if registered after that date, on the day following their registration on the Federal Register of Legislative Instruments. The Amendment Rules amend the Private Health Insurance (Complying Product) Rules 2008 (No. 2) (the Rules), which commenced on 1 July 2008, and were subsequently amended by the Private Health Insurance (Complying Product) Amendment Rules 2008 (No. 2) as of
20 September 2008, and the Private Health Insurance (Complying Product) Amendment Rules 2008 (No. 3) as of 8 December 2008.
Part 3-4 of the Act sets out private health insurers obligations relating to complying health insurance products. Division 93 of Part 3-4 of the Act sets out the requirement for all private health insurers to provide standard information statements (SIS). An SIS provides key information about complying health insurance products, including restrictions and exclusions, and is in the form set out in the Rules.
The Amendment Rules amend Schedules 2, 3 and 4 of the Rules, which relate to SISs. The amendments introduce a third symbol (an asterisk) in the ‘Cover’ column on the general treatment and combined treatment SISs, and an explanation field to enable the SIS to accurately identify general treatment services for products that require a consumer to choose which general treatment services they want covered, from a range of services able to be covered by that product (products with ‘mix and match’ features).
Details of the amendments to the Rules are set out in the Attachment.
The Office of Best Practice Regulation has advised that a Regulation Impact Statement is not required.
Consultation
The Department has consulted the Private Health Insurance Ombudsman (PHIO) on this issue. The PHIO maintains the consumer website www.privatehealth.gov.au which also holds the information contained in SISs. The PHIO web administrator, Human Solutions, will make the system changes on the website that will facilitate the amendment to the Rules.
The Department has also consulted the Private Health Insurance Administration Council, BUPA Australia, HBF Health Funds Inc, the Health Insurance Restricted Membership Association of Australia and the Australian Health Insurance Association. All stakeholders were supportive of the proposed changes.
PRIVATE HEALTH INSURANCE BRANCH
DEPARTMENT OF HEALTH AND AGEING
DECEMBER 2008
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (COMPLYING PRODUCT) AMENDMENT RULES 2008 (No.4)
1. Name of Rules
Rule 1 provides that the title of the Amendment Rules is the Private Health Insurance (Complying Product) Amendment Rules 2008 (No.4).
2. Commencement
Rule 2 provides that the Amendment Rules are to commence on 1 January 2009, or if registered after that date, on the day following their registration on the Federal Register of Legislative Instruments (FRLI).
3. Amendments
Rule 3 provides that the Schedule to the Amendment Rules amends the Private Health Insurance (Complying Product) Rules 2008 (No.2).
Schedule 1 – Amendments
[1] Schedule 4 – Standard information statements: permitted content
This schedule provides for the permitted content for all statements as set out in Part 3 of the Rules.
Schedule 4, Part 3 – general treatment has been amended to add:
- ‘ (see note below)’ to the ‘Covered’ column in the ‘Permitted Content’ field, between the lines ‘ (service is not covered)’ and ‘n/a (for ambulance where it is covered by the state government)’; and
- ‘ <Special features of the product>’ and four blank lines for free text describing the features of the product, above the ‘Health Care Programs and Other Features’ box.
The addition ‘* <Special features of the product>’ and four blank lines for free text are linked to the ‘Permitted Content’ field of the ‘Covered’ column. It will remain invisible unless an asterisk is entered in the ‘Permitted Content’ field of the ‘Covered’ column. An asterisk automatically activates this addition and prompts health insurers to describe the special features of their product.
.
Overview
The Private Health Insurance (Complying Product) Amendment Rules 2008 (No. 4) were introduced to address the need for clearer and more comprehensive information in the standard information statements (SIS) that private health insurers must provide to consumers. Enacted by the Australian Parliament, these rules were designed to amend the Private Health Insurance (Complying Product) Rules 2008, aiming to enhance the transparency and accessibility of information about health insurance products. Specifically, the amendment rules introduce a new symbol, an asterisk, in the 'Cover' column of the general treatment and combined treatment SISs, and an explanation field. This allows for more precise identification of general treatment services for products with 'mix and match' features, where consumers can select specific services from a range of options. The rules were developed following consultations with relevant stakeholders, including the Private Health Insurance Ombudsman and various health insurance associations, all of whom supported the changes. The amendments aim to ensure that consumers are better informed about the services covered by their health insurance products.
Scope and Application
The Private Health Insurance (Complying Product) Amendment Rules 2008 (No.4) applies to private health insurers and the consumers of private health insurance products in Australia. The rules amend the Private Health Insurance (Complying Product) Rules 2008 (No. 2) to provide more detailed information about standard information statements (SIS), which outline the key information about complying health insurance products, including restrictions and exclusions. The amendment introduces a third symbol (an asterisk) in the ‘Cover’ column on the general treatment and combined treatment SISs, and an explanation field to enable the SIS to accurately identify general treatment services for products that require a consumer to choose which general treatment services they want covered, from a range of services able to be covered by that product (products with ‘mix and match’ features). The Amendment Rules apply nationally and will come into effect on 1 January 2009, or if registered after that date, on the day following their registration on the Federal Register of Legislative Instruments. The rules extend the application of the Private Health Insurance Act 2007 by providing more detail on the SISs that must be provided to consumers.
Key Provisions
The main operative sections of the Private Health Insurance (Complying Product) Amendment Rules 2008 (No.4) pertain to the introduction of amendments to the Private Health Insurance (Complying Product) Rules 2008 (No.2), specifically focusing on the Standard Information Statements (SIS) provided by private health insurers. These amendments are detailed in Schedule 1 of the Amendment Rules, and they include changes to Schedule 4, Part 3, which relates to general treatment SISs (paragraph 1). The primary change involves the introduction of a third symbol in the ‘Cover’ column, an asterisk (*), which prompts health insurers to describe the special features of their product when certain conditions are met (paragraph 2). Additionally, there is an introduction of an explanation field to facilitate the identification of general treatment services for products with ‘mix and match’ features, where consumers can choose which services they want covered from a range of options (paragraph 3).
The Amendment Rules impose specific obligations on private health insurers to provide accurate and comprehensive SISs that include all necessary information about the health insurance products they offer. This includes detailing restrictions, exclusions, and the particular features of the products, such as the ‘mix and match’ options. Insurers must ensure that any asterisk symbol in the ‘Cover’ column is accompanied by a detailed explanation of the special features of the product, making it easier for consumers to understand the coverage options available to them (paragraph 4). Furthermore, insurers must comply with the permitted content as set out in the Rules, ensuring that the SISs are in the prescribed format and contain all the required information (paragraph 5).
Failure to comply with the requirements outlined in the Amendment Rules may result in civil or criminal consequences. The specific penalties for non-compliance are not detailed in the explanatory statement, but generally, breaches of the Private Health Insurance Act 2007 can lead to significant penalties. These may include fines for individuals and corporations, depending on the severity and intent of the breach (paragraph 6). Additionally, ongoing non-compliance could potentially lead to more severe consequences, such as the revocation of the insurer’s licence to operate in the private health insurance market (paragraph 7).