An Act to impose a levy to be known as the risk equalisation levy on private health insurers, and for related purposes
1 Short title [see Note 1]
This Act may be cited as the Private Health Insurance (Risk Equalisation Levy) Act 2003.
2 Commencement
This Act commences on 1 July 2004.
3 Crown to be bound
This Act binds the Crown in each of its capacities.
4 Extension of Act to external Territories
This Act extends to the Territory of Cocos (Keeling) Islands and to the Territory of Christmas Island.
5 Definitions
In this Act, unless the contrary intention appears:
Council has the same meaning as in the Private Health Insurance Act 2007.
private health insurer has the same meaning as in the Private Health Insurance Act 2007.
registered health benefits organization means an organisation that was registered under Part VI of the National Health Act 1953 as in force before 1 April 2007.
risk equalisation levy means a risk equalisation levy imposed under section 6.
risk equalisation levy day means a risk equalisation levy day specified in Private Health Insurance (Risk Equalisation Levy) Rules made for the purposes of section 6.
Risk Equalisation Trust Fund means the Private Health Insurance Risk Equalisation Trust Fund continued in existence under section 318‑1 of the Private Health Insurance Act 2007.
supplementary risk equalisation levy day means a supplementary risk equalisation levy day specified in a determination by the Minister under section 6.
6 Imposition of risk equalisation levy
(1) Risk equalisation levy is imposed on each private health insurer:
(a) on each day specified in the Private Health Insurance (Risk Equalisation Levy) Rules as a risk equalisation levy day for a financial year; and
(b) on each day (if any) determined by the Minister, by legislative instrument, as a supplementary risk equalisation levy day for a financial year.
(2) The Private Health Insurance (Risk Equalisation Levy) Rules must not specify more than 4 levy days for a financial year.
(3) The determination by the Minister must not specify more than 2 supplementary levy days for a financial year.
7 Rate of risk equalisation levy
(1) The rate of risk equalisation levy imposed on a particular day is worked out using the following table:
Rate of risk equalisation levy |
Item | The rate of levy imposed on a … | is the rate that … |
1 | risk equalisation levy day | (a) is determined in writing by the Council; and (b) applies on that day. |
2 | supplementary risk equalisation levy day | (a) is determined in writing by the Minister; and (b) applies on that day. |
(2) In determining the rate of levy, the Council and the Minister must comply with the Private Health Insurance (Risk Equalisation Policy) Rules made under the Private Health Insurance Act 2007.
(3) The rate of levy may be set at zero.
(4) An instrument made under paragraph (a) of item 1 or 2 of the table in subsection (1) is not a legislative instrument.
8 Minister to obtain advice from Council
Before making a determination under section 6 or item 2 of the table in subsection 7(1), the Minister must obtain, and take into account, advice from the Council in relation to the following matters:
(a) whether to make a determination under section 6;
(b) the day that is to be, or the days that are to be, specified as the supplementary risk equalisation levy day or days for a financial year;
(c) the rate that is to be specified as the rate of risk equalisation levy imposed on the supplementary risk equalisation levy day or days.
9 Validation of Reinsurance Trust Fund levy
(1) This section applies to the amount of each payment that the Council purported before 1 July 2004 to determine that a registered health benefits organization was to make into the Reinsurance Trust Fund on a particular date under subsection 73BC(6) of the National Health Act.
(2) By force of this section, Reinsurance Trust Fund validation levy of an equal amount is taken to have been imposed on the organization on that date.
(3) The amount of Reinsurance Trust Fund validation levy for which the organization is liable is:
(a) reduced by the sum of the amounts the organization paid into the Reinsurance Trust Fund in accordance with the determination the Council purported to make under subsection 73BC(6) of the National Health Act; and
(b) increased by so much of the sum of those amounts as the organization recovers from the Council or the Reinsurance Trust Fund.
(4) Amounts paid by an organization in accordance with determinations the Council purported to make under subsection 73BC(6) of the National Health Act are taken to be applied to the Reinsurance Trust Fund validation levies in the order in which the Council purported to make the determinations.
10 Validation of late payment penalty in respect of Reinsurance Trust Fund levy
(1) This section applies to the amount of each payment that the Council purported before 1 July 2004 to determine that a registered health benefits organization was to make into the Reinsurance Trust Fund on a particular date under subsection 73BC(9) of the National Health Act.
(2) By force of this section, late payment validation penalty of an equal amount is taken to have been imposed on the organization on that date.
(3) The amount of late payment validation penalty for which the organization is liable is:
(a) reduced by the sum of the amounts the organization paid into the Reinsurance Trust Fund in accordance with the determination the Council purported to make under subsection 73BC(9) of the National Health Act; and
(b) increased by so much of the sum of those amounts as the organization recovers from the Council or the Reinsurance Trust Fund.
(4) Amounts paid by an organization in accordance with determinations the Council purported to make under subsection 73BC(9) of the National Health Act are taken to be applied to the late payment validation penalties in the order in which the Council purported to make the determinations.
10A Private Health Insurance (Risk Equalisation Levy) Rules
The Minister may, by legislative instrument, make Private Health Insurance (Risk Equalisation Levy) Rules providing for matters:
(a) required or permitted by this Act to be provided; or
(b) necessary or convenient to be provided in order to carry out or give effect to this Act.
11 Regulations
(1) The Governor‑General may make regulations prescribing matters:
(a) required or permitted by this Act to be prescribed; or
(b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.
(2) Before the Governor‑General makes regulations under subsection (1), the Minister must take into consideration any relevant recommendation made to the Minister by the Council.
