Private Health Insurance (Levy Administration) Rules 2007

Administered by Department of Health, Disability and Ageing

Legislation au F2007L00905 Rules Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

 

Issued by the Authority of the Minister for Health and Ageing

 

Private Health Insurance Act 2007

 

Private Health Insurance (Levy Administration) Rules 2007

 

Section 333-20 of the Private Health Insurance Act 2007 (the Act) provides that the Minister may make Private Health Insurance (Levy Administration) Rules (the Rules) providing for matters required or permitted by Part 6-6 of the Act, or necessary or convenient in order to carry out or give effect to Part 6-6 of the Act.

 

Part 6-6 of the Act and the Rules deal with the collection of private health insurance levies and other matters relating to their administration.  A private health insurance levy is imposed under one of the following levy Acts:

•         Private Health Insurance (Collapsed Insurer Levy) Act 2003;

•         Private Health Insurance (Complaints Levy) Act 1995;

•         Private Health Insurance (Council Administration Levy) Act 2003;and

•         Private Health Insurance (Risk Equalisation Levy) Act 2003.

 

The Rules specify the payment day for complaints levy, Council administration levy and risk equalisation levy.

 

If a private health insurance levy remains wholly or partly unpaid by a private health insurer after it becomes due and payable on the payment day, the insurer is liable to pay a late payment penalty which is calculated at the rate set out in the rules which is 15% per year.

 

As part of reforms to private health insurance announced by the Australian Government on 26 April 2006, regulation of private health insurance was moved from the National Health Act 1953 (NHA) (and regulations under the NHA) into the new Private Health Insurance Act 2007 (PHI) (and Private Health Insurance Rules made under the PHI).

 

Provision is made for transitional arrangements in relation to private health insurance levies by item 52 of the Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007, which provides that old Part VID of the NHA continues to apply in relation to an amount of levy or an amount of late payment penalty to which that Part applied prior to commencement of the PHI.

 

Private health insurers were extensively consulted and provided with opportunities to comment upon the new Private Health Insurance legislative package.  Consultations were attended by representatives from individual private health insurers and peak industry bodies (the Australian Health Insurance Association and Health Insurance Restricted Membership Association members funds), private hospitals and their industry representatives (Australian Private Hospitals Association and Catholic Health Australia), the Australian Medical Association, the Private Health Insurance Administration Council, the Private Health Insurance Ombudsman, Consumers’ Health Forum of Australia and central agencies.  All of the industry representatives have expressed strong support for the proposed legislative framework including the Private Health Insurance Rules.

 

A Regulation Impact Statement (RIS) that was prepared for the Private Health Insurance Bill 2006 (PHI Bill) analysed the options associated with the Australian Government’s recent initiatives to improve the attractiveness of and participation in private health insurance for consumers.  The measures include those under the Private Health Insurance Act 2007 and associated legislative instruments.  The Office of Best Practice Regulation has advised that no additional RIS is required. 

 

Details of the Rules are set out in the Attachment.

 

The Act does not specify any conditions that need to be met before the power to make the Rules may be exercised. 

 

The Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003. 

 

The Rules commence at the same time as the Act commences if they are registered before the Act commences; or, if the Rules are registered on or after the Act commences the Rules commence on the day they are registered.

 

Authority: Section 333-20 of the Private Health Insurance Act 2007.


ATTACHMENT

 

DETAILS OF THE PRIVATE HEALTH INSURANCE (LEVY ADMINISTRATION) RULES 2007

 

1. Name of Rules

 

Rule 1 provides that the title of the Rules is the Private Health Insurance (Levy Administration) Rules 2007.

 

2. Commencement

 

Rule 2 provides for the Rules to commence at the same time as the Act commences if they are registered before the Act commences; or, if the Rules are registered on or after the Act commences, the Rules commence on the day they are registered.

 

3. Definitions

 

Rule 3 notes that the terms used in these Rules have the same meaning as in the Act.

 

4. Council administration levy

 

Rule 4 provides that the payment day for the Council administration levy is 14 days after an imposition day.  An imposition day for the Council administration levy is the 28th day of the second month of each quarter ending on the last day of March, June, September or December in a financial year.

 

5. Complaints levy

 

Rule 5 provides that the payment day for the complaints levy is 31 December of each year.

 

6. Risk equalisation levy

 

Rule 6 provides that the payment day for the risk equalisation levy is 14 days after an imposition day.  An imposition day for the risk equalization levy is the 21st day of the second month of each quarter ending on the last day of March, June, September and December in a financial year.

 

7. Rate of late payment penalty

 

Rule 7 specifies, for the purposes of paragraph 307-5(2)(a) of the Act, the rate of late payment penalty as 15% per year.

 

Overview

The Private Health Insurance Act 2007, enacted by the Parliament of Australia, represents a significant legislative reform aimed at addressing gaps and inefficiencies in the regulation and administration of private health insurance in Australia. The Act was introduced as part of broader reforms to enhance the attractiveness and participation in private health insurance for consumers, consolidating and updating the legislative framework previously governed by the National Health Act 1953. The Private Health Insurance (Levy Administration) Rules 2007 were made under section 333-20 of the Act, to provide for the administration of private health insurance levies, including the collection timelines and the imposition of late payment penalties. These rules specify the payment dates for various levies and set the rate of late payment penalties at 15% per year. The Act and associated rules were developed following extensive consultation with various stakeholders, including private health insurers, industry bodies, hospitals, medical associations, and consumer groups, all of whom expressed support for the legislative framework. The overarching policy objective is to streamline the administration of private health insurance levies, ensuring timely compliance and efficient levy collection.

Scope and Application

The Private Health Insurance (Levy Administration) Rules 2007, established under section 333-20 of the Private Health Insurance Act 2007, govern the administration of various levies imposed on private health insurers, including the complaints levy, Council administration levy, and risk equalisation levy. These rules apply to all private health insurers operating in Australia, as defined by the Act, and are intended to facilitate the timely collection of these specified levies. The geographic scope of the Act and Rules is national, encompassing the entire Australian jurisdiction. There are no stated exclusions or exemptions within the Rules themselves, but transitional provisions in the Private Health Insurance (Transitional Provisions and Consequential Amendments) Act 2007 ensure continuity in the application of old levies until the new Act takes full effect. The Rules specify precise payment dates for each levy, and failure to meet these deadlines incurs a late payment penalty calculated at 15% per year. The Rules are integral to the legislative framework designed to enhance the regulation and administration of private health insurance in Australia, following consultations with various industry stakeholders.

Key Provisions

The Private Health Insurance (Levy Administration) Rules 2007, under the Private Health Insurance Act 2007, are designed to streamline the administration of various private health insurance levies, including the complaints levy, Council administration levy, and risk equalisation levy. According to Rule 1, these Rules are officially titled the Private Health Insurance (Levy Administration) Rules 2007. Rule 2 stipulates that the Rules will come into effect simultaneously with the Act if they are registered before the Act's commencement date; otherwise, they will commence on the date of their registration. Rule 4 sets the payment day for the Council administration levy as 14 days after the imposition day, with the imposition day being the 28th day of the second month of each quarter ending on the last day of March, June, September, or December in a financial year. Rule 5 designates the payment day for the complaints levy as 31 December each year, while Rule 6 sets the payment day for the risk equalisation levy as 14 days after the imposition day, with the imposition day being the 21st day of the second month of each quarter ending on the last day of March, June, September, or December in a financial year. Rule 7 specifies the late payment penalty rate at 15% per year. These Rules impose specific obligations on private health insurers, primarily centred around timely payment of the specified levies. According to Rule 4, private health insurers must ensure that the Council administration levy is paid by the 14th day following the imposition day. Similarly, Rule 5 requires that the complaints levy be paid by 31 December of each year, and Rule 6 mandates that the risk equalisation levy be paid by the 14th day following the imposition day. Failure to comply with these payment deadlines results in the imposition of a late payment penalty, as outlined in Rule 7, which is calculated at a rate of 15% per year. The Rules also delineate the consequences of non-compliance. According to Rule 7, if a private health insurance levy remains unpaid, either wholly or in part, after it becomes due and payable on the specified payment day, the insurer becomes liable to pay a late payment penalty. This penalty is calculated at the rate of 15% per year. This punitive measure is designed to ensure that private health insurers adhere to the stipulated payment deadlines and maintain the smooth operation of the levy collection process. The penalties serve as a deterrent against late payments, thereby helping to uphold the financial obligations mandated by the Act and the Rules.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.