Commonwealth Numbered Regulations - Explanatory Statements

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PRIVATE HEALTH INSURANCE (ACAC REVIEW LEVY) REGULATIONS 2004 2004 NO. 188

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.

There are currently no regulations under the Act. The Private Health Insurance (ACAC Review Levy) Regulations 2004 implement the levy scheme established by 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 purpose of the Regulations is to establish certain arrangements to enable the administration and collection of the levy. The Regulations prescribe the levy day, the rate of levy and the census day. It is intended that the levy be collected four times per year.

Paragraph 6(1)(a) of the Act provides that the levy is imposed on each registered health benefits organization on each day specified in regulations as a levy day for a financial year. Subsection 6(2) of the Act provides that the regulations must not specify more than 4 levy days for a financial year.

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 will be 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 contributors 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 collects the total amount required despite potential variations in the number and types of contributors.

Subparagraph 7(2)(a)(i) of the Act provides that the census day for the levy day is to be specified in the regulations. The census day is the day on which the number of contributors is assessed for the purposes of the calculation of the rate of the levy to be paid by each registered health benefits organization.

Subsection 10(2) provides that, before the Governor-General makes regulations under subsection 10(1), the Minister must take into consideration any relevant recommendations made to the Minister by the Private Health Insurance Administration Council. No recommendations have been made to the Minister in relation to the Regulations.

The Regulations establish arrangements for the calculation of the levy, while the National Health (Private Health Insurance Levies) Regulations 2004, which are the subject of a separate Minute, establish arrangements for the payment of the levy.

Details of the Regulations are set out in the Attachment.

The Regulations commence on 1 July 2004. The Act received the Royal Assent on 15 July 2003 and will commence on 1 July 2004.

Subsections 4(1) and (2A) of the Acts Interpretation Act 1901, read together, provide that regulations may be made between the passing and commencement of legislation upon which they rely for their authority, as long as such regulations do not commence before that legislation.

ATTACHMENT

DETAILS OF THE PRIVATE HEALTH INSURANCE (ACAC REVIEW LEVY) REGULATIONS 2004.

Regulation 1 names the Regulations as the Private Health Insurance (ACAC Review Levy) Regulations 2004.

Regulation 2 provides for the Regulations to commence on 1 July 2004.

Regulation 3 provides that, for the purpose of the Regulations, Act means the Private Health Insurance (ACAC Review Levy) Act 2003 and quarter means the period of 3 months ending on the last day of March, June, September or December.

Regulation 4 provides that the Acute Care Advisory Committee (ACAC) review levy day, the day on which the levy is imposed, is the 28^th day of the second month of each quarter in a financial year.

Regulation 5 provides the rate of the ACAC review levy. The rate is different for single contributors and family contributors (where there are contributions in relation to more than one person). The rate has been formulated having regard to the total number of contributors in the industry. The rate has been established so that the total amount, $24, 443, 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.

Regulation 6 provides that the census day, the day on which the Private Health Insurance Administration Council determines the number of contributors to each health fund for the purposes of calculating the levy, is the 28^th day of the first month of each quarter in a financial year.