EXPLANATORY STATEMENT

 

Select Legislative Instrument 2005 No. 113

 

Issued by the Authority of the Minister for Health and Ageing

 

Private Health Insurance (ACAC Review Levy) Act 2003

 

Private Health Insurance (ACAC Review Levy) Amendment Regulations 2005 (No. 1)

 

Subsection 10(1) of the Private Health Insurance (ACAC Review Levy) Act 2003 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

 

The purpose of the Acute Care Advisory Committee (ACAC) review levy (the levy) is to meet the administrative costs of reviews conducted by the ACAC under section 3B of the Health Insurance Act 1973.  The Private Health Insurance (ACAC Review Levy) Regulations 2004 (the Principal Regulations) currently implement the levy scheme established by the Act.

 

Item 1 of the table in subsection 7(1) of the Act provides that the rate of levy imposed on the levy day is the rate that is specified in the regulations and applies on that day.  Subsection 7(2) sets out requirements which must be met in determining the rate of levy.  The levy paid by each organization is based on the numbers of contributors to the health fund with a different rate for each contributor type.  The different rates for a single contributor and those who contribute in relation to more than one person are determined by a formula which has regard to the total number of contributors to health benefits funds conducted by registered health benefits organizations.  The formula has been structured to ensure that the rate set for the levy will collect the total amount required despite potential variations in the number and types of contributors.

 

The purpose of the Regulations is to amend the formula which is used to calculate the levy, as the total amount that is required to be collected for a financial year has reduced from $24,443 to $5,000.

 

Paragraph 7(2)(c) of the Act provides that the rate of levy must not exceed 50 cents for a single contributor and $1 for those who contribute in respect of more than one person for a financial year.  The rate of the levy which would be prescribed by the Regulations would continue to comply with the limits prescribed by paragraph 7(2)(c) of the Act.

 

Subsection 10(2) of the Act provides that, before the Governor-General makes regulations under subsection 10(1) of the Act, the Minister must take into consideration any relevant recommendations made to the Minister by the Private Health Insurance Administration Council (the Council).  The Minister has received advice from the Council recommending that the total amount collect by the levy be reduced to $5,000.  The changes are consistent with the Council’s recommendation.

 

Details of the Regulations are set out in the Attachment.

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The Regulations commence on 1 July 2005.

 

Consultation

 

The decrease in the levy rate is minor and machinery in nature and is reflective of the number of certificates lodged over recent years and the consequent decrease in related administrative costs. Consultation with the private health industry and the department of Health and Ageing was considered to be unnecessary.  

 

The Office of Regulation Review was consulted, and advised that a Regulation Impact Statement was not required.  The total amount to be collected for a financial year was calculated by the Private Health Insurance Administration Council in consultation with the Department of Finance and Administration.

 

ATTACHMENT

 

DETAILS OF THE PRIVATE HEALTH INSURANCE (ACAC REVIEW LEVY) AMENDMENT REGULATIONS 2005 (No. 1).

 

Regulation 1 provides for the Regulations to be referred to as the Private Health Insurance (ACAC Review Levy) Amendment Regulations 2005 (No. 1).

 

Regulation 2 provides for the Regulations to commence on 1 July 2005.

 

Regulation 3 provides for Schedule 1 to amend the Private Health Insurance (ACAC Review Levy) Regulations 2004 (the Principal Regulations).

 

Schedule 1 – Amendments

 

Items [1] and [2]

Item [1] amends the rate of the Acute Care Advisory Committee (ACAC) review levy (the levy) for single contributors.  Item [2] amends the rate of the levy for family contributors (where there are contributions in relation to more than one person). 

 

The rates have been formulated having regard to the total number of contributors in the industry.  The rates have been established so that the total amount for a financial year, $5,000, is collected despite variations in the number of contributors to each health fund.  This amount was calculated by the Private Health Insurance Administration Council in consultation with the Department of Finance and Administration.