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Private Health Insurance Bill 2007

Part 4-2 Carrying on health insurance business

Division 115 Introduction

115-1   What this Part is about

Only entities that are registered under Part 4-3 as health insurers can carry on health insurance business. Other entities can be prevented from carrying on health insurance business.

115-5   The Private Health Insurance (Health Insurance Business) Rules

                   The carrying on of * health insurance business is also dealt with in the Private Health Insurance (Health Insurance Business) Rules. The provisions of this Part indicate when a particular matter is or may be dealt with in these Rules.

Note:          The Private Health Insurance (Health Insurance Business) Rules are made by the Minister under section 333-20.

115-10   Whether a business etc. is health insurance business

                   The following diagram shows how to work out whether a business or arrangement is * health insurance business:

 



 

Division 118 Prohibition of carrying on health insurance business without registration

118-1   Carrying on health insurance business without registration

             (1)  A person commits an offence if:

                     (a)  the person carries on * health insurance business; and

                     (b)  the person is not a private health insurer.

Penalty:  40 penalty units.

             (2)  A person commits an offence against subsection (1) in respect of each day during which the person contravenes that section, including the day of a conviction for any such offence or any later day.

Note:          See also subsections 4K(3) and (4) of the Crimes Act 1914 in relation to multiple contraventions of this provision.

118-5   Injunctions

             (1)  The Federal Court may grant an injunction in such terms as it determines to be appropriate if, on the application of the Minister, the Council or any other person, the court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute a contravention of section 118-1.

             (2)  The Federal Court may grant an interim injunction pending determination of an application under subsection (1).

             (3)  The court must not require an applicant for an injunction to give an undertaking as to damages as a condition of granting an interim injunction.

             (4)  The court may discharge or vary an injunction granted under subsection (1) or (2).

             (5)  The power of the court to grant an injunction restraining a person from engaging in conduct may be exercised:

                     (a)  whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of that kind; and

                     (b)  whether or not the person has previously engaged in conduct of that kind.

             (6)  The power of the court to grant an injunction requiring a person to do an act or thing may be exercised:

                     (a)  whether or not it appears to the court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and

                     (b)  whether or not the person has previously refused or failed to do that act or thing.



 

Division 121 What is health insurance business?

121-1   Meaning of health insurance business

             (1)  Health insurance business is:

                     (a)  the business of undertaking liability, by way of insurance; or

                     (b)  an * employee health benefits scheme;

that relates, in a way referred to in subsection (2), to * hospital treatment or * general treatment.

Note:          The following kinds of insurance business are not health insurance business:

(a)           accident and sickness insurance business (see section 121-20);

(b)           liability insurance business (see section 121-25);

(c)           insurance business excluded by the Private Health Insurance (Health Insurance Business) Rules (see section 121-30).

             (2)  The liability by way of insurance, or the arrangement to make payments under the * employee health benefits scheme, must relate to:

                     (a)  loss arising out of a liability to pay fees or charges relating to provision in Australia of such treatment; or

                     (b)  provision in Australia of such treatment; or

                     (c)  the happening of an occurrence connected with the provision in Australia of such treatment; or

                     (d)  the happening of an occurrence in Australia that ordinarily requires the provision of such treatment.

             (3)  It does not matter for the purposes of paragraph (2)(d) whether payment of benefits to the insured is dependent upon one or more of the following:

                     (a)  such treatment or benefit being provided to the insured;

                     (b)  the insured requiring such treatment or benefit;

                     (c)  fees or charges being payable by the insured in relation to the provision of such treatment or benefit.

121-5   Meaning of hospital treatment

             (1)  Hospital treatment is treatment (including the provision of goods and services) that:

                     (a)  is intended to manage a disease, injury or condition; and

                     (b)  is provided to a person:

                              (i)  by a person who is authorised by a * hospital to provide the treatment; or

                             (ii)  under the management or control of such a person; and

                     (c)  either:

                              (i)  is provided at a hospital; or

                             (ii)  is provided, or arranged, with the direct involvement of a hospital.

             (2)  Without limiting subsection (1), hospital treatment includes any other treatment, or treatment included in a class of treatments, specified in the Private Health Insurance (Health Insurance Business) Rules for the purposes of this subsection.

             (3)  Without limiting subsection (1) or (2), the reference to treatment in those subsections includes a reference to any of, or any combination of, accommodation, nursing, medical, surgical, podiatric surgical, diagnostic, therapeutic, prosthetic, pharmacological, pathology or other services or goods intended to manage a disease, injury or condition.

             (4)  Despite subsections (1) and (2), treatment is not * hospital treatment if it is specified in, or is included in a class of treatments specified in, the Private Health Insurance (Health Insurance Business) Rules for the purposes of this subsection.

             (5)  A hospital is a facility for which a declaration under subsection (6) is in force.

             (6)  The Minister may, in writing:

                     (a)  declare that a facility is a * hospital; or

                     (b)  revoke such a declaration.

Note:          Refusals to make declarations, and revocations of declarations are reviewable under Part 6-9.

             (7)  In deciding whether to declare that a facility is a * hospital, or to revoke such a declaration, the Minister must have regard to:

                     (a)  the nature of the facility; and

                     (b)  the range and scope of the services provided, or proposed to be provided, under the management or control of the facility and at or on behalf of the facility; and

                     (c)  whether the necessary approvals by a State or Territory, or by an authority of a State or Territory, have been obtained in relation to the facility; and

                     (d)  whether the accreditation requirements of an appropriate accrediting body have been met; and

                     (e)  whether undertakings have been made, or have been complied with, relating to providing to private health insurers information, of the kind specified in the Private Health Insurance (Health Insurance Business) Rules, relating to treatment of * policy holders of * health benefits funds; and

                      (f)  any other matters specified in the Private Health Insurance (Health Insurance Business) Rules.

             (8)  A declaration under subsection (6) that a facility is a * hospital must include either a statement that the hospital is a public hospital or a statement that the hospital is a private hospital.

121-10   Meaning of general treatment

             (1)  General treatment is treatment (including the provision of goods and services) that:

                     (a)  is intended to manage or prevent a disease, injury or condition; and

                     (b)  is not * hospital treatment.

             (2)  Without limiting subsection (1), general treatment includes any other treatment, or treatment included in a class of treatments, specified in the Private Health Insurance (Health Insurance Business) Rules for the purposes of this subsection.

             (3)  Despite subsections (1) and (2), neither of the following is * general treatment:

                     (a)  the rendering in Australia of a service for which * medicare benefit is payable, unless the Private Health Insurance (Health Insurance Business) Rules provide otherwise;

                     (b)  any other treatment, or treatment included in a class of treatments, specified in the Private Health Insurance (Health Insurance Business) Rules for the purposes of this paragraph.

121-15   Extension to employee health benefits schemes

             (1)  An arrangement is an employee health benefits scheme if:

                     (a)  the arrangement provides for a person (an employer ) to arrange payment in respect of the whole or part of the fees and charges that an employee of, or a person providing services to, the employer incurred in relation to * hospital treatment or * general treatment; and

                     (b)  one or more of the following applies:

                              (i)  the employer is a * constitutional corporation;

                             (ii)  the employer is a body corporate incorporated in a Territory;

                            (iii)  the employer carries on business in a Territory.

             (2)  It does not matter for the purposes of this section whether the arrangement:

                     (a)  constitutes a business of undertaking liability by way of insurance; or

                     (b)  is a minor or incidental part of the employer’s business; or

                     (c)  does not require the employee, or person providing services, to pay any contributions; or

                     (d)  does not require the employee, or person providing services, to pay contributions that reflect the value of the benefits that the employer is providing under the arrangement; or

                     (e)  provides for the employer to make payments in relation to * hospital treatment, or * general treatment, provided to a person other than the employee or person providing services; or

                      (f)  confers on the employer or another person a discretion whether to make payments.

             (3)  However, an arrangement:

                     (a)  is not an * employee health benefits scheme merely because, under the arrangement, the employer will pay, or will reimburse employees, or persons providing services, for payment of, one or both of the following:

                              (i)  the premiums payable by them for * complying health insurance policies;

                             (ii)  the difference between benefits payable to them under policies, and amounts that they are liable to pay, for health services provided to them or members of their families; and

                     (b)  is not an employee health benefits scheme if the Private Health Insurance (Health Insurance Business) Rules provide that:

                              (i)  it is not an employee health benefits scheme; or

                             (ii)  arrangements of a class in which it is included are not employee health benefits schemes; and

                     (c)  is not an employee health benefits scheme to the extent (if any) that the arrangement constitutes State insurance within the meaning of paragraph 51(xiv) of the Constitution.

121-20   Exception: accident and sickness insurance business

             (1)  Despite section 121-1, * health insurance business does not include the business of undertaking liability, by way of insurance, to pay a lump sum, or to make periodic payments, on the happening of a personal accident, disease or sickness.

             (2)  However, this section does not apply to:

                     (a)  business where liability is undertaken with respect to loss arising out of a liability to pay fees or charges in relation to the provision in Australia of * hospital treatment or * general treatment; or

                     (b)  business of a kind specified in the Private Health Insurance (Health Insurance Business) Rules for the purposes of this paragraph.

121-25   Exception: liability insurance business

                   Despite section 121-1, * health insurance business does not include the business of undertaking liability, by way of insurance, with respect to any loss arising out of a liability to pay compensation or damages, including:

                     (a)  a liability to pay compensation or damages because of the use of a motor vehicle; or

                     (b)  a liability to pay compensation or damages to an employee because of an event occurring in connection with the employee’s employment.

121-30   Exception: insurance business excluded by the Private Health Insurance (Health Insurance Business) Rules

                   Despite section 121-1, * health insurance business does not include a business of a kind that the Private Health Insurance (Health Insurance Business) Rules state not to be a health insurance business.