Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
PRIVATE HEALTH INSURANCE LEGISLATION AMENDMENT BILL 2009
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health and Ageing, the
Honourable Nicola Roxon MP)
PRIVATE HEALTH INSURANCE LEGISLATION AMENDMENT BILL 2009
OUTLINE
The Bill provides for amendments to the Private Health Insurance Act 2007
and the Age Discrimination Act 2004 to allow insurers to permanently offer
extended family policies that cover 'dependent child non-students'.
'Dependent child non-students' are people aged from 18 to 24 with no
partner where defined in a private health insurer's fund rules. Family
policies, or policies with more than one person including a 'dependent
child non-student', may be offered at an additional premium cost.
The Bill also includes consequential amendments to the Private Health
Insurance Act 2007, consistent with the introduction of the Private Health
Insurance (National Joint Replacement Register Levy) Bill 2009, which
imposes a levy to fund the National Joint Replacement Register (NJRR).
The provisions dealing with extended family policies will commence on the
later of 1 July 2009 and the day on which the Act receives Royal Assent.
The commencement day for the provision which adds the definition 'dependent
child non-student' to Schedule 1 of the Private Health Insurance Act 2007
is the same time as the provision dealing with extended family policies.
The amendments to the Private Health Insurance Act 2007 that are a
consequence of the introduction of the Private Health Insurance (National
Joint Replacement Register Levy) Bill 2009 will commence at the same time
as the provisions of the proposed Private Health Insurance (National Joint
Replacement Register Levy) Act 2009.
Schedule 1 of the Bill makes amendments to the Private Health Insurance Act
2007 and the Age Discrimination Act 2004.
Extended Family Policies
The amendments will add a category of 'dependent child' under the Private
Health Insurance Act 2007 by inserting the definition of 'dependent child
non-student'. This will allow insurers to charge a different premium for
'dependent child non-students' under a family policy. A 'dependent child
non-student' is a person aged from 18 to 24 (inclusive), who does not have
a partner, is not receiving a full time education at a school, college or
university and is defined in a private health insurer's fund rules. The
provision will allow insurers to include 'dependent child non-students' on
a family policy (a policy with more than one person that includes a
dependent child or children) at an additional premium rate.
In 2007, a number of private health insurers requested changes to the
private health insurance law to allow private health insurers to offer
family policies covering 'dependent child non-students' at rates higher
than the premium for the same products covering children aged under 18 and
older students. Transitional arrangements allowing this practice were put
into effect in late 2007. The Bill will allow this practice on a permanent
basis.
The Bill also amends the Age Discrimination Act 2004 in order to ensure
that private health insurers who offer extended family policies under the
Private Health Insurance Act 2007 do not unlawfully do so under the Age
Discrimination Act 2004.
National Joint Replacement Register (NJRR) Levy
The Bill also includes consequential amendments to the Private Health
Insurance Act 2007, consistent with the introduction of the Private Health
Insurance (National Joint Replacement Register Levy) Bill 2009 which
imposes a levy upon sponsors of joint replacement prostheses listed in the
Private Health Insurance (Prostheses) Rules in order to recover the costs
of maintaining the NJRR. The consequential amendments to the Private
Health Insurance Act 2007 allow for the administration of the NJRR levy.
Financial Impact Statement
This Bill includes consequential amendments to the Private Health Insurance
Act 2007 associated with the introduction of the Private Health Insurance
(National Joint Replacement Register Levy) Bill 2009. The Private Health
Insurance (National Joint Replacement Register Levy) Bill 2009 would impose
a levy upon sponsors of joint replacement prostheses listed in the Private
Health Insurance (Prostheses) Rules in order to recover the costs of
operating the NJRR and represents a cost saving measure of approximately $5
million over four years.
PRIVATE HEALTH INSURANCE LEGISLATION AMENDMENT BILL 2009
NOTES ON CLAUSES
Clause 1 - Short Title
This clause provides that the Bill, once enacted, may be cited as the
Private Health Insurance Legislation Amendment Act 2009.
Clause 2 - Commencement
This clause provides that the Bill, once enacted, will commence on the day
on which the Act receives Royal Assent for sections 1 to 3 which cover the
Short Title, Commencement and Schedule(s) to the Act.
For Schedule 1, items 1 to 4 which deal with extended family policies, and
item 14 which adds the definition of 'dependent child non-student' to
Schedule 1 of the Private Health Insurance Act 2007, the commencement day
is the later of 1 July 2009 and the day on which the Act receives Royal
Assent.
The commencement day for Schedule 1, items 5 to 13 which deal with
amendments which are a consequence of the Private Health Insurance
(National Joint Replacement Register Levy) Bill 2009, and item 15 which
adds the definition of 'national joint replacement register levy' to
Schedule 1 of the Private Health Insurance Act 2007, is the same time as
the commencement of sections 3 to 9 of the proposed Private Health
Insurance (National Joint Replacement Register Levy) Act 2009 (i.e. 1 July
2009).
Clause 3 - Schedule(s)
This clause provides that each Act that is specified in a Schedule to this
Bill is amended or repealed as set out in the applicable items in the
Schedule concerned, and any other item in a Schedule to this Bill has
effect according to its terms.
Schedule 1 - Amendments
Age Discrimination Act 2004
Item 1 - Schedule 2 (cell at table item 9A, column headed "Provision(s)")
Item 1 inserts the words "and subsection 63-5(4)" providing that acts
performed by private health insurers in direct compliance with the new
subsection 63-5(4) are not unlawful under the Age Discrimination Act 2004.
Private Health Insurance Act 2007
Item 2 - Paragraph 55-5(2)(c)
Item 2 inserts the words "or subsection 63-5(4)" to exclude premiums
charged in compliance with the new subsection 63-5(4) from being improper
discrimination under the Private Health Insurance Act 2007.
Item 3 - At the end of section 63-5
Item 3 adds new subsections 63-5(4) and 63-5(5) into section 63-5 'Meaning
of complying health insurance product'.
New subsection 63-5(4) provides that a premium payable for a policy that
covers an insured group of two or more people that includes a dependent
child non-student may be higher than a premium payable for a policy in the
same product that covers an insured group of two or more people that
includes one or more dependent children but no dependent child non-student.
New subsection 63-5(5) defines the meaning of dependent child non-student.
Item 4 - At the end of section 304-10
Item 4 adds the national joint replacement register levy, which is imposed
under the proposed Private Health Insurance (National Joint Replacement
Register Levy) Act 2009, to the list of private health insurance levies in
section 304-10. This amendment is a consequence of the proposed Private
Health Insurance (National Joint Replacement Register Levy) Act 2009.
Item 5 - Subparagraph 307-1(1)(a)(iv)
Item 5 omits the word "and" at the end of subparagraph 307-1(1)(a)(iv) and
substitutes the word "or". This amendment is a technical consequential
amendment, required as a result of the addition of new subparagraph 307-
1(1)(a)(v) (item 6 refers).
Item 6 - At the end of paragraph 307-1(1)(a)
Item 6 amends paragraph 307-1(1)(a) by adding new subparagraph 307-
1(1)(a)(v) which refers to national joint replacement register levy imposed
on a supplementary national joint replacement register levy day (within the
meaning of the proposed Private Health Insurance (National Joint
Replacement Register Levy) Act 2009).
The purpose of this amendment is to clarify that national joint replacement
register levy that is imposed on a supplementary national joint replacement
register levy day becomes due and payable on the day specified as the
payment day for that imposition day in a determination made by the Minister
by legislative instrument.
This amendment is a consequence of the proposed Private Health Insurance
(National Joint Replacement Register Levy) Act 2009.
Item 7 - Subsection 307-5(1)
Subsection 307-5(1) currently provides that if a private health insurance
levy remains wholly or partly unpaid by a private health insurer after it
becomes due and payable, the insurer is liable to pay a late payment
penalty. The term private health insurance levy has the meaning set out in
section 304-10. Currently, all private health insurance levies are payable
by private health insurers.
Subsection 307-5(1) requires amendment as a consequence of the national
joint replacement register levy (imposed under the proposed Private Health
Insurance (National Joint Replacement Register Levy) Act 2009) being added
to the list of private health insurance levies in section 304-10 (item 4
refers). The national joint replacement register levy will be payable by
sponsors for joint replacement prostheses (within the meaning of the
proposed Private Health Insurance (National Joint Replacement Register
Levy) Act 2009), not by private health insurers.
Item 7 omits the words "private health insurer" from subsection 307-5(1)
and substitutes the word "person". The term "person" will cover both
private health insurers and sponsors for joint replacement prostheses.
Item 8 - Subsection 307-5(1)
Subsection 307-5(1) currently provides that if a private health insurance
levy remains wholly or partly unpaid by a private health insurer after it
becomes due and payable, the insurer is liable to pay a late payment
penalty. The term private health insurance levy has the meaning set out in
section 304-10. Currently, all private health insurance levies are payable
by private health insurers.
Subsection 307-5(1) requires amendment as a consequence of the national
joint replacement register levy (imposed under the proposed Private Health
Insurance (National Joint Replacement Register Levy) Act 2009) being added
to the list of private health insurance levies in section 304-10 (item 4
refers). The national joint replacement register levy will be payable by
sponsors for joint replacement prostheses (within the meaning of the
proposed Private Health Insurance (National Joint Replacement Register
Levy) Act 2009), not by private health insurers.
Item 8 omits the words "the insurer" from subsection 307-5(1) and
substitutes the words "the person". The term "person" will cover both
private health insurers and sponsors for joint replacement prostheses.
Item 9 - At the end of subsection 307-10(1)
Item 9 provides that a national joint replacement register levy and a late
payment penalty in respect of a national joint replacement register levy
must be paid to the Commonwealth. This amendment is a consequence of the
proposed Private Health Insurance (National Joint Replacement Register
Levy) Act 2009.
Item 10 - Subsection 307-20(1)
Item 10 amends subsection 307-20(1) to allow the Minister to waive the
whole or part of an amount of late payment penalty in respect of an unpaid
amount of national joint replacement register levy if the Minister
considers that there are good reasons for doing so. Subsection 307-20(1)
already allows the Minister to waive the whole or part of an amount of late
payment penalty in respect of an unpaid amount of complaints levy if the
Minister considers that there are good reasons for doing so.
Item 11 - Division 310 (heading)
Item 11 replaces the heading for "Division 310 - Returns, requesting
information and keeping records" with "Division 310 - Returns, requesting
information and keeping records: private health insurers" to clarify that
Division 310 will only relate to private health insurers.
Item 12 - Division 313 (heading)
Item 12 replaces the heading for "Division 313 - Power to enter premises
and search for documents" with "Division 313 - Power to enter premises and
search for documents: private health insurers" to clarify that Division 313
will only relate to private health insurers.
Items 13 and 14 - Clause 1 of Schedule 1
Schedule 1 forms the Dictionary of definitions used in the Private Health
Insurance Act 2007. These items insert the following new definitions into
the Dictionary:
. dependent child non-student is as defined in subsection 63-5(5) (item 3
refers); and
. national joint replacement register levy is as defined in paragraph 304-
10(e) (item 4 refers);