EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Health and Ageing
Private Health Insurance Act 2007
Private Health Insurance (Registration) Rules 2007 (No. 2)
Section 333-20 of the Private Health Insurance Act 2007 (the Act) provides that the Minister may make Private Health Insurance (Registration) Rules (the Rules) providing for matters required or permitted by Part 4-3 of the Act, or necessary or convenient in order to carry out or give effect to Part 4-3 of the Act.
Part 4-3 of the Act contains provisions relating to the power of the Private Health Insurance Administration Council (the Council) to register private health insurers.
The Private Health Insurance (Registration) Rules 2007 (No. 2) (the Rules) will commence 7 days after the Rules are made.
The Rules revoke and replace the Private Health Insurance (Registration) Rules 2007. Rule 5 of the revoked Rules referred to applications for registration by a ‘company’. Rule 5 of the replacement Rules now refers to ‘an applicant’ to make it clear that an applicant does not have to be a ‘company’.
Rules describing particular groups for the purposes of paragraph 126-20(7)(e) in relation to existing restricted access insurers have also been inserted. By doing so, the Rules provide for existing restricted access insurers to continue to make available *complying health insurance products to current and future members within the restricted access group for that insurer as described in the Rules, following re-registration with the Private Health Insurance Administration Council (PHIAC) by July 2008.
The Rules also enable private health insurers to make available *complying health insurance products to their former, current and future employees (including contractors). Most restricted access group insurers will also be able to make available *complying health insurance products to the immediate family (ie, partners, dependent children, siblings, grandchildren and parents), and the former partners and adult children of persons described in the Rules as the Principal Insureds. The Rules also allow for the partners and *dependent children of siblings and adult children of the Principal Insureds to be taken to be part of the same restricted access group. This reflects the current industry practice.
The Department conducted consultation with the Health Insurance Restricted Membership Association of Australia (HIRMAA) and its members. An Exposure Draft was released to HIRMAA on 20 September 2007 and a further draft was circulated on 2 October 2007.
The Act does not specify any conditions which need to be met before the power to make the Rules may be exercised.
Details of the Rules are set out in the Attachment. The Rules are a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Rules commence 7 days after these Rules are made.
Authority: Section 333-20 of the Private Health Insurance Act 2007
ATTACHMENT
DETAILS OF THE PRIVATE HEALTH INSURANCE (REGISTRATION) RULES 2007 (No.2)
PART 1 - Preliminary
1. Name of Rules
Rule 1 provides that the title of the Rules is the Private Health Insurance (Registration) Rules 2007(No. 2).
2. Commencement
Rule 2 provides for the Rules to commence 7 days after they are made.
3. Effect of Rules
Rule 3 provides for the Private Health Insurance (Registration) Rules 2007 to be revoked and to be replaced by these Rules.
4. Definitions
Rule 4 provides that terms used in the Rules have the same meaning as in the Act. In addition, Rule 4 also defines the terms ‘Principal Insureds’ and ‘Act’ which is used in the Rules.
PART 2 - General
5. Deciding the application
Rule 5 provides that the Council is required to consider certain matters when deciding an application for registration as a private health insurer.
Subrule 5(1) provides that these matters are the likely ratio of management and administration expenses in respect of the funds to the likely amount of premiums of each fund; the likely number of persons who will contribute to the fund and the proposed premiums; and information on the application provided in writing by, or on behalf of, the Secretary of the Department. This may include information as to whether the body is likely to be able to comply with the obligations imposed by or under the Act on private health insurers.
6. Description of groups for existing restricted access insurers
Rule 6 contains, for the purpose of paragraph 126-20(7)(e) of the Act, descriptions of groups for existing restricted access insurers.
Subsection 126-20(7) of the Act provides that a restricted access group is a group of people who all belong to a particular group, based on whether they belong to one of the groups described in paragraphs 126-20(7)(a) to (e).
Rule 6(a) provides that persons who are already insured with a *restricted access insurer at the date of commencement of these Rules are taken to belong to a *restricted access group (‘a Group’) to whom that insurer’s *complying health insurance products are, or will be, made available.
As indicated in note (i) to Rule 6, the purpose of Rule 6(a) is to ensure that *restricted access insurers are able to continue to provide cover to all existing insured persons.
Rule 6(b) provides that persons who are, or become, officers or employees (including contractors) of a *restricted access insurer that makes available its *complying health insurance products to a Group are also taken to belong to that Group, except where the person is or becomes an employee (including a contractor) of Reserve Bank Health Society Limited.
Rule 6(c) provides that the partners and *dependent children of Principal Insureds are also taken to belong to the same Group as those Principal Insureds.
Rule 6(d) provides that the former partners and adult children of Principal Insureds are also taken to belong to the same Group as those Principal Insureds, except where the Principal Insured is insured by Reserve Bank Health Society Limited.
Rule 6(e) provides that the siblings, grandchildren and parents of Principal Insureds are also taken to belong the same Group as those Principal Insureds, except where the Principal Insured is insured by the following *restricted access insurers: ACA Health Benefits Fund, South Australian Policy Employees Health Fund Inc, or Reserve Bank Health Society Limited.
Rule 6(f) provides that the partners and *dependent children of persons who are the adult children of Principal Insureds are also taken to belong to the same Group as those Principal Insureds, except where the Principal Insured is insured by Reserve Bank Health Society Limited.
Rule 6(g) provides that the partners and *dependent children of persons who are the siblings of Principal Insureds are also taken to belong to the same Group as those Principal Insureds, except where the Principal Insured is insured by the following *restricted access insurers: ACA health Benefits Fund, or South Australian Police Employees Health Fund Inc, or Reserve Bank Health Society Limited.
Rule 6(h) provides that on and from commencement of the Rules, the Group to whom a *restricted access insurer specified in Column 1 of the Schedule does or will make its *complying health insurance products available comprises:
- the persons described in paragraphs 6(a), (b), (c), (d), (e), (f) and (g); and
- the classes of people specified in Column 2 of the Schedule for that insurer.
As indicated in note (ii) to Rule 6 the purpose of paragraph (h) is to ensure that, on and from the commencement of these Rules, *restricted access insurers are able to continue to make *complying health insurance products available to limited classes of people who might not otherwise form part of a *restricted access group for the purposes of subsection 126-20(7) of the Act.
7. Limits on insurance provided by restricted access insurers
For the avoidance of doubt, Rule 7(a) confirms that a *restricted access insurer’s constitution may only specify one *restricted access group to whom the insurer’s complying health insurance products are, or will be, available.
For the avoidance of doubt, Rule 7(b) confirms that a *restricted access insurer may not add new persons to this *restricted access group in addition to the persons included in that group by the operation of the Act and these Rules.
For the avoidance of doubt, Rule 7(c) confirms that paragraphs 6(c), 6(f) and 6(g) of these Rules modify the operation of subsection 126-20 (7) of the Act in relation to the partners and dependent children of people who belong to a *restricted access group.
Schedule – Restricted access groups for certain insurers
This is the Schedule referred to in Rule 6(h) of the Rules.