Private Health Insurance Supervisory Levy Imposition Determination 2019

Overview

The Private Health Insurance Supervisory Levy Imposition Determination 2019 was enacted to address the need for a levy on private health insurance entities, as specified in the Private Health Insurance Supervisory Levy Imposition Act 2015. This legislation was introduced to ensure that the costs associated with the supervision of private health insurance providers are adequately recovered. The determination, which applies to the 2019-20 financial year, specifies the levy amount and the date by which health insurance providers must assess the number of each type of policy they have on issue to determine the supervisory levy payable. The levy is calculated based on the number of complying health insurance policies, subject to a maximum amount per policy, and the data used for this calculation is derived from the information provided to the Australian Prudential Regulation Authority (APRA). The determination also includes a statement of compatibility with human rights, asserting that it does not engage any of the applicable rights or freedoms.

Scope and Application

The Private Health Insurance Supervisory Levy Imposition Determination 2019 applies to private health insurance entities in Australia and governs the imposition of a supervisory levy for the 2019-20 financial year. This determination is made under the authority of the Private Health Insurance Supervisory Levy Imposition Act 2015 and specifies the calculation method for the levy based on the number of complying health insurance policies on issue, as well as the date by which these policies must be assessed to determine the payable levy amount. The levy amount is calculated by dividing the estimated supervisory cost of $6.09 million by the total number of single and twice the number of other policies on issue as of the census day, which is 1 July 2019. The maximum levy per single policy is capped at $2, while the levy for all other policies is twice that amount. The data for calculating the levy is sourced from the data provided to the Australian Prudential Regulation Authority (APRA) and is the data as of the end of June 2019. This determination supersedes the previous levy imposition for the 2018-19 financial year and ensures compliance with the legislative requirements while recovering the estimated supervisory costs through the imposed levy.

Key Provisions

The Private Health Insurance Supervisory Levy Imposition Determination 2019 (F2019L00912) sets out the specific details for the levy imposed on private health insurance entities by the Private Health Insurance Supervisory Levy Imposition Act 2015. According to section 8 of the Act, the Minister is required to determine the levy amount and the census day for assessing policy numbers. This determination specifies the levy amount for the 2019-20 financial year and sets the census day as 1 July 2019. The levy is calculated based on the number of complying health insurance policies in issue on this date, with a maximum levy of $2 per single policy. The total levy for all other policies is set at twice the levy amount for a single policy, irrespective of the number of people covered. The Act imposes obligations on private health insurance entities to assess the number of policies they have on issue as of the census day and to calculate the supervisory levy payable. Entities must use the data provided to the Australian Prudential Regulation Authority (APRA) under the specified forms for this calculation. These entities are required to report and pay the determined levy amount by the set deadline to ensure compliance with the Act. Failure to comply with these requirements can result in penalties. The Act also stipulates the consequences for non-compliance with the levy requirements. While the specific penalties are not detailed in the determination, breaches of the Act could result in enforcement actions by APRA or other relevant authorities. These actions could include financial penalties, legal proceedings, or other administrative measures to ensure compliance. The determination notes that the Office of Best Practice Regulation has advised that a Regulatory Impact Statement is not required for this levy, as it is considered machinery-of-government in nature. However, entities must still adhere to the specified obligations and deadlines to avoid potential consequences.