EXPLANATORY STATEMENT
Private Health Insurance Supervisory Levy Imposition Determination 2017
This determination relates to a levy imposed on private health insurance entities by the Private Health Insurance Supervisory Levy Imposition Act 2015.
This determination commences on 1 July 2017 and relates to the 2017-18 financial year. The determination commences, or is taken to have commenced, before it is registered. However, commencement prior to registration does not disadvantageously affect the rights of any person as at the date of registration or impose any liability on any person in respect of anything done or omitted to be done before the date of registration. Commencement prior to registration is therefore consistent with subsections 12(2) and 12(3) of the Legislation Act 2003.
Section 8 of the Private Health Insurance Supervisory Levy Imposition Act 2015 requires the Treasurer, by legislative instrument, to determine:
(a) the levy amount, which must be calculated having regard to the number of complying health insurance policies on issue (subject to a maximum supervisory levy amount that is applicable per policy); and
(b) the day on which health insurance providers must assess the number of each type of policy they have on issue for the purposes of determining the amount of supervisory levy payable.
The purpose of this determination is to ensure that the cost to supervise private health insurance providers (estimated to be $6.7 million in the 2017-18 financial year) will be recovered through a levy on all complying health insurance policies that apply on the census day, which is determined to be 1 July 2017 for the 2017-18 financial year.[1]
The amount of levy for each single policy will be $6.7 million divided by the sum of the aggregate number of single policies and twice the number of other policies on issue on 1 July 2017,1 but not exceeding $2 per single policy.
The amount of levy for all other policies will be twice the levy amount for a single policy. The amount of supervisory levy for policies with more than one person insured is the same regardless of the actual number of people covered.
The public has been consulted on the 2017-18 supervisory levies through a Treasury and Australian Prudential Regulation Authority (APRA) discussion paper released on the Treasury website on 26 May 2017. The paper discussed potential impacts of the levies on each industry sector and institution regulated by APRA. Five submissions were received during the consultation process, none of which related to this levy.
The Office of Best Practice Regulation has previously advised that a Regulatory Impact Statement is not required as supervisory levies are considered machinery‑of‑government in nature.
This determination is a legislative instrument for the purposes of the Legislation Act 2003.
A statement of compatibility with human rights for the purposes of Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is set out in Attachment 1.
Attachment 1
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Private Health Insurance Supervisory Levy Imposition Determination 2017
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
This determination relates to a levy imposed on private health insurance entities by the Private Health Insurance Supervisory Levy Imposition Act 2015.
Section 8 requires the Minister to determine:
(a) the levy amount, which must be calculated having regard to the number of complying health insurance policies on issue (subject to a maximum supervisory levy amount that is applicable per policy); and
(b) the day on which health insurance providers must assess the number of each type of policy they have on issue for the purposes of determining the amount of supervisory levy payable.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
[1] However in practice the data to be used for levy billing purposes will be based on the data provided to APRA under form HRF 601.0 Statistical Data – Cover Page and form HRF 601.1 Statistical Data – by State (which form part of Reporting Standard HRS 601.0) and will be the data as per the end of June 2017.
Overview
The Private Health Insurance Supervisory Levy Imposition Determination 2017 is a legislative instrument enacted under the Private Health Insurance Supervisory Levy Imposition Act 2015. This determination was introduced to address the need for recovering the cost of supervising private health insurance providers, estimated at $6.7 million for the 2017-18 financial year. The Act was enacted by the Australian Parliament to provide a mechanism for imposing a supervisory levy on private health insurance entities. The policy objective is to ensure that the cost associated with the supervision of private health insurance entities is recovered through a levy on complying health insurance policies. The determination sets out the specifics of the levy, including the amount to be levied per policy and the census day for determining the number of policies on issue, which is 1 July 2017 for the 2017-18 financial year. This approach ensures that the supervisory costs are equitably distributed among the relevant insurance policies.
Scope and Application
The Private Health Insurance Supervisory Levy Imposition Determination 2017 applies to private health insurance entities, specifically focusing on the levy imposed by the Private Health Insurance Supervisory Levy Imposition Act 2015. This determination sets out the amount of the supervisory levy for the 2017-18 financial year and the date by which health insurance providers must assess their policies to determine the payable amount. The levy is calculated based on the number of complying health insurance policies on issue as of 1 July 2017, with a maximum levy amount applicable per policy, and a maximum of $2 per single policy. The levy for all other policies is twice the levy amount for a single policy. This determination applies across Australia as it is a Commonwealth legislation, and there are no exclusions or exemptions specified within the text. The determination extends its application through subordinate instruments, ensuring compliance and enforcement of the stipulated levies on private health insurance entities.
Key Provisions
The Private Health Insurance Supervisory Levy Imposition Determination 2017 (F2017L00917) establishes a levy on private health insurance entities, in accordance with the Private Health Insurance Supervisory Levy Imposition Act 2015. Section 8 of the Act mandates the Treasurer to determine the amount of the levy, calculated based on the number of complying health insurance policies on issue, with a maximum supervisory levy amount per policy. The levy is intended to cover the estimated $6.7 million cost of supervising private health insurance providers in the 2017-18 financial year. The levy amount for each single policy is determined by dividing $6.7 million by the sum of the aggregate number of single policies and twice the number of other policies on issue as of 1 July 2017, but not exceeding $2 per single policy. For policies with more than one person insured, the levy is the same regardless of the number of people covered.
The determination imposes several obligations on health insurance providers. Firstly, they must assess the number of each type of policy they have on issue on the specified census day to determine the amount of supervisory levy payable. Secondly, they must pay the calculated levy amount by the due date, which is 1 July 2017 for the 2017-18 financial year. The levy is payable by health insurance providers to the Commonwealth, and they must ensure they have the necessary data to accurately calculate and report the levy. This includes using data provided to the Australian Prudential Regulation Authority (APRA) under form HRF 601.0 and form HRF 601.1.
There are no explicit offences or penalties stated in the determination for non-compliance with the levy requirements. However, failure to meet these obligations could potentially result in administrative consequences or financial penalties under other related legislation. The determination ensures that the levy is imposed in a manner that does not disadvantage any person and that no liability is imposed on any person in respect of anything done or omitted to be done before the date of registration. This is consistent with subsections 12(2) and 12(3) of the Legislation Act 2003.
The determination also includes a statement of compatibility with human rights, prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The statement concludes that the determination is compatible with human rights, as it does not engage any of the applicable rights or freedoms. This ensures that the imposition of the levy does not infringe upon any human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.