EXPLANATORY STATEMENT
Private Health Insurance Supervisory Levy Imposition Determination 2018
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 2018 and relates to the 2018-19 financial year. The Private Health Insurance Supervisory Levy Imposition Determination 2016 and Private Health Insurance Supervisory Levy Imposition Determination 2017 are repealed upon commencement of this determination. Consistent with section 7 of the Acts Interpretation Act 1901, any obligation or liability incurred in previous financial years remains valid.
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 Minister, 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 $4.5 million in the 2018-19 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 2018 for the 2018-19 financial year.[1]
The amount of levy for each single policy will be $4.5 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 2018-19 supervisory levies through a Treasury and Australian Prudential Regulation Authority (APRA) discussion paper released on the Treasury website on 11 May 2018. The paper discussed potential impacts of the levies on each industry sector and institution regulated by APRA. Six submissions were received during the consultation process, none of which related specifically to the methodology for 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 2018
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 2018.