The Private Health Insurance Legislation Amendment Bill 2009 will amend the Private Health Insurance Act 2007 and the Age Discrimination Act 2004.

The commencement day for provisions dealing with extended family policies and surplus assets is the later of 1 July 2009 and the day on which the Act receives Royal Assent. The commencement day for provisions dealing with amendments to the Private Health Insurance Act 2007 which are a consequence of the Private Health Insurance (National Joint Replacement Register Levy) Bill 2009 is the same time as the commencement of the proposed Private Health Insurance (National Joint Replacement Register Levy) Act 2009.

The amendments will permanently allow private health insurers to offer extended family policies that cover people aged 18 to 24 (inclusive), who do not have a partner, are not receiving a full time education at school, college or university and where the fund rules of a private health insurer provide for this group.

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 in order to recover the costs of maintaining the National Joint Replacement Register (NJRR).

Extended family policies

The 18 to 24 age group has relatively low participation in private health insurance. Private health insurers developed extended family policies to encourage 18-24 year olds to continue their health cover into adulthood. Under the Private Health Insurance Complying Product Rules 2008 (No 3), transitional arrangements were made to allow these extended family policies to continue until 31 December 2009.

The Bill will amend the Private Health Insurance Act 2007 to allow insurers to permanently offer extended family insurance policies.

While premiums on an extended dependent family policy can be more than other family policies covering just younger children and older students, most importantly, the overall cost should nonetheless be lower than if such young adults had to take out their own separate policy.

This will make it more attractive for people aged under 25 to remain in private health insurance.

This is a win-win amendment. It is a win for the private health industry as it will be able continue to offer an attractive product for families and young adults, and it is a win for many families who will be able to save money by utilising extended dependent private health insurance policies.

The Bill also amends the Age Discrimination Act 2004 to provide an exemption from any unlawful age discrimination under that Act which may arise from allowing a higher premium to be set for policies that include ‘dependent child non-students’.

National Joint Replacement Register Levy

A new cost recovery Act to fund the National Joint Replacement Register has been proposed and will commence on 1 July 2009 or, if later, the day of Royal Assent. The Bill includes consequential amendments related to the National Joint Replacement Registry Levy, with respect to the administration of the levy.