Health Legislation Amendment (Private Health Insurance Reform) Act 2004 Act No. 1 of 2004 as amended This compilation was prepared on 30 March 2005 [This Act was amended by Act No. 31 of 2005] Amendments from Act No. 31 of 2005 [Schedule 2 (item 1) inserted Item 28A of Schedule 1 Schedule 2 (item 2) inserted Item 32A of Schedule 1 Schedule 2 (item 3) inserted Item 37A of Schedule 1 Schedule 2 (items 1–3) commenced on 1 July 2004] Prepared by the Office of Legislative Drafting and Publishing, Attorney‑General's Department, Canberra Contents 1 Short title 2 Commencement 3 Schedule(s) Schedule 1—Amendment of health insurance legislation Part 1—Amendments regulating obligations of registered organizations National Health Act 1953 Private Health Insurance Incentives Act 1998 Part 2—Amendments increasing powers of the Private Health Insurance Ombudsman National Health Act 1953 Part 3—Amendments relating to annual State of the Health Funds Report National Health Act 1953 Part 4—Amendments relating to lifetime health cover National Health Act 1953 An Act to amend legislation relating to private health insurance, and for related purposes [Assented to 27 February 2004] The Parliament of Australia enacts: 1 Short title This Act may be cited as the Health Legislation Amendment (Private Health Insurance Reform) Act 2004. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, on the day or at the time specified in column 2 of the table. Commencement information Column 1 Column 2 Column 3 Provision(s) Commencement Date/Details 1. Sections 1 to 3 and anything in this Act not elsewhere covered by this table The day on which this Act receives the Royal Assent 27 February 2004 2. Schedule 1, items 1 to 24 A single day to be fixed by Proclamation, subject to subsection (3) 1 July 2004 (s 2(1); Gazette 2004, S125) 3. Schedule 1, items 25 to 27 A single day to be fixed by Proclamation, subject to subsection (4) 1 July 2004 (s 2(1); Gazette 2004, S125) 4. Schedule 1, items 28 to 40 At the same time as the provisions covered by item 2 of this table 1 July 2004 5. Schedule 1, Parts 2 and 3 The day on which this Act receives the Royal Assent 27 February 2004 6 Schedule 1, item 58 A single day to be fixed by Proclamation, subject to subsection (3) 23 April 2004 (s 2(1); Gazette 2004, S125) 7. Schedule 1, items 59 to 64 The day on which this Act receives the Royal Assent 27 February 2004 8. Schedule 1, items 65 and 66 At the same time as the provision covered by item 6 of this table 23 April 2004 9. Schedule 1, items 67 to 69 A single day to be fixed by Proclamation, subject to subsection (3) 23 April 2004 (s 2(1); Gazette 2004, S125) 10. Schedule 1, item 70 The day on which this Act receives the Royal Assent 27 February 2004 11. Schedule 1, item 71 At the same time as the provisions covered by item 9 of this table 23 April 2004 12. Schedule 1, item 72 The day on which this Act receives the Royal Assent 27 February 2004 13. Schedule 1, item 73 At the same time as the provisions covered by item 9 of this table 23 April 2004 Note: This table relates only to the provisions of this Act as originally passed by the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent. (2) Column 3 of the table is for additional information that is not part of this Act. This information may be included in any published version of this Act. (3) If a provision covered by item 2, 6 or 9 of the table does not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, it commences on the first day after the end of that period. (4) If a provision covered by item 3 of the table does not commence within the period of 6 months beginning on the day on which this Act receives the Royal Assent, that provision is repealed on the first day after the end of that period. 3 Schedule(s) Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms. Schedule 1—Amendment of health insurance legislation Part 1—Amendments regulating obligations of registered organizations National Health Act 1953 1 Section 66 Insert: breach of the Act, in relation to a registered organization, means a failure by the organization to conduct its health insurance business as required by section 67B. 2 Section 66 Insert: Court means the Federal Court of Australia. 3 Section 66 (paragraph (b) of the definition of improper discrimination) Repeal the paragraph, substitute: (b) the gender, race, sexual orientation or religious belief of a person; (ba) the age of a person, except to the extent that the person's age may be taken into account under section 73BAAA and Schedule 2; (baa) the place of residence of a person, except to the extent that the person's place of residence may be taken into account under section 73AAL; (bb) any other characteristic of a person (including but not limited to matters such as occupation or leisure pursuits) that is likely to result in an increased requirement for professional services; 4 Section 66 Insert: officer, in relation to a registered organization, includes: (a) if the organization is a company under the Corporations Act 2001—a director of the company; and (b) the public officer of the organization; and (c) if the organization is an incorporated association—a member of the management committee of that association; and (d) if the organization is an unincorporated entity—a member of the governing body of the entity; and (e) if a person has been appointed as a receiver of the property of the organization and manages, or has, under the terms of the receiver's appointment, power to manage the affairs of the organization—that receiver. 5 At the end of section 66 Add: (2) A reference in this Part to the principles of community rating is a reference to the general requirements imposed on a registered organization by virtue of the operation of subsections 73AAH(2) and (3) and also to the particular requirements imposed on a registered organization under sections 73AAI and 73AAJ. 6 Subsection 67A(1) Omit "the Federal Court of Australia", substitute "the Court". 7 After section 67A Insert: 67B Conduct of health insurance business A registered organization must conduct its health insurance business in accordance with: (a) the provisions of this Act and the regulations; and (b) any term or condition of registration that is imposed on the organization by or under this Act; and (c) any direction of the Minister given under section 73BEJ that has been served on the organization; and (d) the Council's rules; and (e) the provisions of the constitution and rules of the organization, other than provisions that are inconsistent with: (i) this Act or the regulations; or (ii) a term or condition of registration referred to in paragraph (b); or (iii) a direction referred to in paragraph (c); and not otherwise. 8 Subsections 73(2A) and (2B) Repeal the subsections, substitute: (2A) The Council must not grant an application by an organization for registration as a registered health benefits organization if the constitution or the rules of the organization permit improper discrimination. Note: Improper discrimination is defined in subsection 66(1). 9 Subsection 73AAE(6) Repeal the subsection. 10 Before section 73A Insert in Division 3 of Part VI: 73AAF Registration is subject to conditions in this Division and in Schedule 1 The registration of an organization as a registered health benefits organization is, with effect from the date of its registration, subject to the conditions set out in this Division and the conditions set out in Schedule 1. 73AAG Matters ancillary to particular conditions in Schedule 1 (1) Determinations made under paragraph (bj) of the conditions set out in Schedule 1 are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901. (2) The Minister may determine, in writing, guidelines relating to the establishment by an organization, under its rules and in accordance with the conditions set out in paragraph (ma) of Schedule 1, of loyalty bonus schemes. (3) Such guidelines: (a) may cover all or any of the following: (i) the circumstances in which organizations can offer financial benefits, goods or services under a loyalty bonus scheme; (ii) the types of actual and contingent financial benefits that can be offered to a contributor, a dependant of a contributor or a third party under such a scheme; (iii) the types of goods or services that can be offered by the organization or, at the instigation of the organization, by a third party, to a contributor or dependant; and (b) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901. (4) The Minister may, having regard to the management expenses incurred by all organizations, make a determination in writing of the maximum percentage of discount that organizations, under their rules and in accordance with paragraph (s) of Schedule 1, may offer to contributors in respect of their rates of contribution. (5) Determinations under subsection (4) are disallowable instruments for the purposes of section 46A of the Acts Interpretation Act 1901. 73AAH General condition concerning community rating (1) It is a condition of registration of a registered organization that the organization will ensure that its constitution and rules, and its actions, are at all times consistent with the principles of community rating. (2) The constitution or rules of a registered organization will not be consistent with the principles of community rating if the constitution or rules permit the organization to undertake any activity that constitutes improper discrimination against a person who seeks to become, or who is, a contributor to the health benefits fund conducted by the organization or against a dependant of such a person. Note: Improper discrimination is defined in subsection 66(1). (3) An action of a registered organization will not be consistent with the principles of community rating if the action results in the undertaking of any activity that constitutes an improper discrimination against a person who seeks to become, or who is, a contributor to the health benefits fund conducted by the organization or against a dependant of such a person. Note: Improper discrimination is defined in subsection 66(1). (4) Determining entitlement to ancillary health benefits claimed in respect of a period by or on behalf of a contributor to a health benefits fund conducted by a registered health benefits organization, or by or on behalf of a dependant of such a contributor, by reference solely to the quantum of ancillary health benefits already claimed in respect of that period is consistent with the principles of community rating referred to in subsections (2) and (3). 73AAI Community rating condition concerning admission of persons as contributors and cancellations of membership (1) It is a condition of registration of a registered organization that the organization will not: (a) refuse to permit a person who is not a contributor to the health benefits fund conducted by the organization from contributing, in respect of the person and the person's dependants (if any), for any health insurance product that is presently provided by the organization (other than a closed health insurance product); or (b) refuse to permit a person who is a contributor to the health benefits fund conducted by the organization from contributing, in respect of the contributor and the contributor's dependants (if any), for any health insurance product (other than a closed health insurance product) that is presently provided by the organization; or (c) cancel the membership of a person as a contributor to the health benefits fund conducted by the organization; if that refusal or cancellation amounts to improper discrimination against that person. Note: Improper discrimination is defined in subsection 66(1). (2) In this section: closed health insurance product, in relation to a registered organization, means a health insurance product of that organization that the organization has permanently closed to new or transferring contributors. health insurance product, in relation to a registered organization, means: (a) any applicable benefits arrangement; or (b) any table of ancillary health benefits; that the registered organization offers to members of the health benefits fund conducted by it. 73AAJ Community rating condition concerning quantum and payment of benefits It is a condition of registration of a registered organization that the organization will not, in determining, in relation to any contributor, or to any contributor included in a class of contributors, to the health benefits fund conducted by it: (a) whether or not benefits are payable in accordance with an applicable benefits arrangement of the organization (whether or not modified by an election of the kind referred to in the condition set out in paragraph (ba) of Schedule 1); or (b) if benefits are payable in accordance with an applicable benefits arrangement of the organization (whether or not modified by an election of the kind referred to in the condition set out in paragraph (ba) of Schedule 1)—the amount of the benefits so payable; or (c) whether or not the contributor is entitled to make or revoke an election of the kind referred to in the condition set out in paragraph (ba) of Schedule 1; or (d) the amount of the contributions payable in respect of an applicable benefits arrangement of the organization; have regard to any matter that would cause the determination to constitute improper discrimination in respect of any contributor, or any contributor included in a class of contributors, to whom or to which the determination relates. Note: Improper discrimination is defined in subsection 66(1). 73AAK Limited exception from community rating for restricted membership organizations Despite the conditions in sections 73AAH, 73AAI and 73AAJ: (a) the constitution and rules of a restricted membership organization may restrict membership of that organization in the manner set out in the paragraphs of the definition of restricted membership organization in subsection 4(1); and (b) any action taken solely to ensure that persons abide by the constitution and those rules so far as they relate to membership of the health benefits fund conducted by that organization is not a breach of these conditions. 73AAL Discrimination on basis of place of residence Nothing in this Act prevents a registered health benefits organization: (a) from charging different rates of contribution; or (b) from paying different levels of benefit; in respect of persons who are contributors to the health benefits fund conducted by the organization, or in respect of persons who are dependants of such contributors, where such contributors or dependants have their place of residence in one State or Territory as distinct from another. 11 Subsection 73A(1) Repeal the subsection, substitute: (1) It is a condition of registration of a registered organization that: (a) except in the circumstances set out in subsection 92B(2), the organization will not enter into a refund agreement or become an agent of a party to a refund agreement for the purposes of the refund agreement; and (b) the organization will keep a record, in a form approved by the Secretary: (i) of the names of all members of the organization who were, immediately before the commencement of this section, and who have continued to be, parties to refund agreements with registered organizations; and (ii) of the addresses of all such members last known to the organization. Note 1: The heading to section 73A is replaced by the heading "Condition concerning entry into, and records relating to, refund agreements". Note 2: The heading to section 73AB is replaced by the heading "Condition concerning provision of information required under Hospital Casemix Protocol". 12 Section 73ABA Repeal the section. 13 Paragraph 73B(1)(a) Omit "an organization is", substitute "an organization or organizations generally are". 14 Subsection 73B(1A) Repeal the subsection, substitute: (1A) If the Minister makes a decision revoking, varying or imposing a condition under subsection (1) in relation to an organization or organizations generally, the Minister is to cause notice in writing of that decision to be served on the public officer of the organization, or of each organization, to which the condition relates. 15 Subsection 73B(2) After "organization" (wherever occurring), insert "or organizations". 15A Subsection 73B(2) After "Gazette", insert ", and free of charge on the Department's website not later than 5 working days after the action is taken by the Minister,". 16 Section 73BA Repeal the section. 17 Saving provisions (1) Any determinations made for the purposes of subsection 73BA(2A) of the National Health Act 1953 that were in force immediately before the day of commencement of item 16 of this Schedule continue in force, on and after that day, as if they had been made under and for the purposes of subsection 73AAG(2) of that Act as amended by item 10 of this Schedule. (2) Any determinations made for the purposes of subsection 73BA(4) of the National Health Act 1953 that were in force immediately before the day of commencement of item 16 of this Schedule continue in force, on and after that day, as if they had been made under and for the purposes of subsection 73AAG(4) of that Act as amended by item 10 of this Schedule. 18 Before section 73BB Insert: Division 3AA—Health Benefits Reinsurance Trust Fund 19 Subsection 73BB(4) Repeal the subsection. Note: The heading to section 73BB is replaced by the heading "Determinations in relation to records to be maintained to assist Council in respect of Health Benefits Reinsurance Trust Fund". 20 Division 5 of Part VI Repeal the Division, substitute: Division 5—Enforcement and remedies Subdivision A—Performance indicators and preliminary explanations 73BEA Performance indicators (1) The regulations must set out performance indicators to be used by the Minister in monitoring the operations of registered organizations. (2) The performance indicators are to be framed: (a) to assist the Minister in detecting breaches of the Act; and (b) to alert the Minister to any practice followed by a registered organization which may require investigation; and (c) to alert the Minister to any practice followed by one or more registered organizations that may be contrary to government health policy and therefore require a regulatory response. (3) The Department must publish on its website guidance to the public on how the Department will interpret and apply the performance indicators provided for by this section. 73BEB Minister may require registered organizations to explain their operations (1) If, having regard: (a) to any information that is available to the Minister at any time concerning a registered organization; or (b) to such information and to performance indicators in force at that time; the Minister believes that the organization may be in breach of the Act, the Minister may write to the organization expressing the Minister's concerns and requesting the organization to provide an explanation of its operations relevant to those concerns. (2) In requesting an explanation of particular operations of a registered organization, the Minister must specify the time within which the organization is required to provide that explanation. (3) If the organization is unable to provide an explanation within the time specified by the Minister, it may, within that time, explain to the Minister the reason for that inability and request the Minister to extend the time for it to provide the explanation. (4) If the Minister refuses to extend the time limit for providing the explanation, the Minister must inform the organization accordingly and indicate the reasons for the refusal. 73BEC Consequences of a failure to provide a satisfactory explanation (1) On receipt of an explanation from a registered organization the Minister must, as soon as practicable, consider the explanation and inform the organization either: (a) that the Minister is satisfied with the explanation; or (b) that the Minister is not satisfied with the explanation and proposes to take a specified course of action. (2) Subject to subsection (3), the courses of action that the Minister may specify are any of the following: (a) to conduct an investigation of the operations of the organization under Subdivision B; (b) to request the organization to commit to an enforceable undertaking in terms satisfactory to the Minister under Subdivision C; (c) to give the organization a direction under Subdivision D; (d) to impose a further condition to which the registration of the organization is subject under section 73B; (e) if the circumstances set out in Subdivision E apply—under section 14A‑1 of the Private Health Insurance Incentives Act 1998, to revoke the status of the organization as a participating fund; (f) to apply to the Court for an order requiring the organization to undertake particular action by way of redressing a breach of the Act or for an order imposing a pecuniary penalty on an officer of the organization under Subdivision F; (g) to take action under Part VIA. (3) The Minister: (a) may specify a course of action set out in paragraph (2)(b), (c) or (d) in relation to a registered organization whether or not the Minister is satisfied, having regard to the explanation and to any other relevant information known to the Minister, that the organization has breached, or is likely to have breached, the Act; but (b) must not specify a course of action set out in paragraph (2)(e), (f) or (g) unless, having regard to such explanation and information, the Minister is satisfied that the organization has breached the Act. Subdivision B—Investigations 73BED Minister may conduct investigation (1) The Minister may, by notice in writing served on a person who is or has been an officer, employee or agent of a registered organization, require the person to do all or any of the following: (a) to give, within a time specified in the notice, to the Minister or to a person specified in the notice, such information as relates to an area of operations of the organization that is specified in the notice; (b) to produce, at a time and place specified in the notice, such of the records, books, accounts and other documents of the organization as are in the person's custody or under the person's control and relate to an area of operations of the organization that is specified in the notice; (c) to attend, at a time and place specified in the notice, before the Minister or a person specified in the notice and give evidence relating to an area of operations of the organization that is specified in the notice. (2) The Minister may require the information to be furnished, or the evidence to be given, on oath or affirmation and either orally or in writing and, for that purpose, the Minister or the person specified in the notice may administer an oath or affirmation. (3) If, in the opinion of the Minister it is desirable for the purposes of an investigation that the records, books, accounts and other documents of a registered organization be examined, the Minister may authorise, in writing, a person to examine and report on those records, books, accounts and other documents. (4) A person authorised under subsection (3) must, at all reasonable times, have full and free access to any premises at which the records, books, accounts and other documents are kept and may take extracts from, or copies of, the records, books, accounts and other documents. (5) In this section: registered organization includes an organization whose registration was cancelled under section 79 within 12 months before the date: (a) of the notice under subsection (1); or (b) of the authorisation under subsection (3); as the case requires. 73BEE Offences relating to requirements under section 73BED (1) A person must not fail to comply with a requirement contained in a notice served on the person under subsection 73BED(1). Penalty: 10 penalty units. (2) A person must not fail to be sworn or to make an affirmation when required to do so under subsection 73BED(2). Penalty: 10 penalty units. (3) An offence against subsection (1) or (2) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. (4) A person is not excused from answering a question or producing a document when required to do so under subsection 73BED(1) on the ground that the answer to the question, or the production of the document, might tend to incriminate the person or make the person liable to a penalty. However, the answer, or the production of the document, or anything obtained as a direct or indirect consequence of the answer or the production, is not admissible in evidence against the person in any proceedings, other than proceedings for an offence against subsection (5). (5) A person must not give information or make a statement to the Minister or to any other officer in accordance with a requirement under subsection 73BED(1), knowing that the information or statement is false or misleading in a material particular. Penalty: Imprisonment for 6 months. 73BEF Minister may consult Council If, in the course of an investigation, the Minister has reason to believe that issues concerning: (a) the solvency standard, or the capital adequacy standard, for a registered organization; or (b) the governance of a registered organization; are in question, the Minister may: (c) consult the Council on that matter; and (d) if the Minister considers it prudent to do so—direct the Council, under section 82J, to take over any part of the investigation that relates to those issues. 73BEG Consequences of investigation Upon the completion of an investigation under this Subdivision: (a) if the Minister is satisfied with the performance of the organization—the Minister must advise the registered organization in writing to that effect; and (b) if the Minister is satisfied that there has been a breach of the Act—the Minister must advise the organization of the nature of the breach and may: (i) request the organization to commit to an enforceable undertaking in terms satisfactory to the Minister under Subdivision C; or (ii) give a direction to the organization under Subdivision D that, in the opinion of the Minister, addresses the breach; or (iii) impose a further condition on the organization under section 73B that, in the opinion of the Minister, addresses the breach; or (iv) if the circumstances set out in Subdivision E apply—under section 14A‑1 of the Private Health Insurance Incentives Act 1998, revoke the status of the organization as a participating fund; or (v) apply to the Court for an order requiring the organization to undertake particular action by way of redressing the breach or for an order imposing a pecuniary penalty on an officer of the organization under Subdivision F; or (vi) take action under Part VIA; and (c) if the Minister is not satisfied that there has been a breach of the Act but considers that the performance of the organization can be improved—the Minister may: (i) request the organization to commit to an enforceable undertaking under Subdivision C; or (ii) give a direction to the organization under Subdivision D; or (iii) impose a further condition on the organization under section 73B; that, in the opinion of the Minister, is likely to improve its performance. Subdivision C—Enforceable undertakings 73BEH The Minister may accept written undertakings given by a registered organization (1) The Minister may accept a written undertaking given by a registered organization at the Minister's request if, in the view of the Minister, compliance with the undertaking will: (a) be likely to improve the performance of the organization; or (b) if the Minister is satisfied that the organization has breached the Act—be likely to ensure that the organization will cease to be in breach of the Act. (2) The registered organization may withdraw or vary the undertaking at any time with the consent of the Minister. 73BEI Enforcement of undertakings (1) If the Minister considers that the registered organization that gave an undertaking under this Subdivision has breached any of its terms, the Minister may apply to the Court for an order under subsection (2). (2) If the Court is satisfied that the registered organization has breached a term of the undertaking, the Court may make one or more of the following orders: (a) an order directing the organization to comply with the terms of the undertaking; (b) if there is a breach of the Act—any other order of a kind set out in Subdivision F that the Court considers appropriate. Subdivision D—Ministerial directions 73BEJ Directions given by Minister to registered organizations (1) If, having regard to: (a) the failure of a registered organization to provide an explanation of its operations sought by the Minister under Subdivision A; or (b) the nature of an explanation so sought that is provided to the Minister; the Minister considers that it will assist in the prevention of improper discrimination to do so, the Minister may give a direction to the organization: (c) requiring it to modify its constitution or its rules in a particular respect; or (d) requiring it to modify its day‑to‑day operations in a particular respect. (2) If, having regard to the outcome of an investigation conducted under Subdivision B, the Minister concludes that there appears to be a breach of the Act involving improper discrimination by the organization, the Minister may give a direction to the organization: (a) requiring it to modify its constitution or rules; or (b) requiring it to modify its day‑to‑day operations; so as to address that breach. (3) If, having regard to the outcome of an investigation under Subdivision B, the Minister concludes that, while there does not appear to be a breach of the Act, it will assist in the prevention of improper discrimination to do so, the Minister may give a direction to the organization requiring it: (a) to modify its constitution or its rules in a particular respect; or (b) to modify its day‑to‑day operations in a particular respect. (4) A direction referred to in subsection (1), (2) or (3) may, if the Minister considers it proper to do so, include, as a part of the direction, requirements with respect to the reconsideration by the organization to which the direction relates, of an application or claim made to the organization and dealt with by it before the direction takes effect. (5) An organization must, in reconsidering an application or claim in accordance with a direction of the kind referred to in subsection (4), deal with the application or claim as if the direction had been in force at the time when the application or claim was first considered. Note: Improper discrimination is defined in subsection 66(1). (6) A direction given by the Minister in accordance with this section must be published free of charge by the Secretary on the Department's website not later than 5 working days after the direction is given. 73BEK Direction requirements A direction given by the Minister under this Act to a registered organization: (a) must be in writing; and (b) must be signed by the Minister; and (c) may be served on the organization by serving a copy on the public officer of the organization. Subdivision E—Removal of entitlement to offer rebate as a premium reduction 73BEL Minister may revoke registered organization's status as participating fund If the Minister is satisfied, whether as a result of conducting an investigation under Subdivision B or otherwise, that a registered organization: (a) has failed to comply with a direction given by the Minister under section 73BEJ; or (b) has failed to comply with a community rating condition applicable to the organization under section 73AAH, 73AAI or 73AAJ; the Minister may, under section 14A‑1 of the Private Health Insurance Incentives Act 1998, revoke the status of the organization as a participating fund. Subdivision F—Court imposed sanctions 73BEM Minister may apply to the Court for orders redressing breach of Act or imposing pecuniary penalties (1) If the Minister is satisfied, whether as a result of conducting an investigation under Subdivision B or otherwise, that a registered organization has breached the Act, the Minister may apply to the Court for any one or more of the following orders: (a) an order requiring the organization to pay compensation to an individual for any injury or loss sustained as a result of the breach; (b) an order imposing a pecuniary penalty on a officer of the organization; (c) an adverse publicity order in relation to the organization; (d) any other order that the Minister considers will be appropriate to redress the breach. (2) In this section, an adverse publicity order, in relation to a registered organization that has breached the Act, means an order requiring the organization to undertake either or both of the following actions: (a) to disclose in a way, and to the person or persons, specified in the order, such information to correct or counter the effect of the breach as is so specified; (b) to publish, in the way specified in the order, an advertisement to correct or counter the effect of the breach in the terms specified in, or determined in accordance with, the order. 73BEN Imposition and enforcement of orders by the Court (1) If: (a) the Minister makes an application under subsection 73BEM(1) for a particular order in relation to a registered organization other than an order imposing a pecuniary penalty on an officer of the organization; and (b) the Court is satisfied: (i) that the organization to which an application relates has breached the Act; and (ii) that the order applied for is appropriate to redress the breach; the Court may make the order applied for. (2) If: (a) the Minister makes an application under subsection 73BEM(1) for an order imposing a pecuniary penalty on an officer of a registered organization; and (b) the Court is satisfied that: (i) the registered organization to which the application relates has breached the Act; and (ii) an officer of the organization failed to take reasonable steps to prevent the occurrence of that breach; the Court may, subject to subsection (3), order the officer to pay to the Commonwealth a pecuniary penalty, not exceeding $10,000, in respect of the officer's failure referred to in subparagraph (2)(b)(ii), as the Court considers appropriate. (3) The Court must not make an order under subsection (2) if it is satisfied that a court has ordered the officer to pay damages in the nature of punitive damages in respect of: (a) the breach referred to in subparagraph (2)(b)(i); or (b) the officer's failure referred to in subparagraph (2)(b)(ii). (4) In hearing and determining an application for an order under subsection (1) or (2), the Court is to apply the rules of evidence and procedure that it applies in hearing and determining civil matters. A reference in this section to the Court being satisfied of a matter is a reference to the Court being satisfied of the matter on the balance of probabilities. (5) An order under subsection (1) or (2) may be enforced as a judgment of the Court. 73BEO Restrictions relating to payment of pecuniary penalties A registered organization must not: (a) permit money from the health benefits fund conducted by it to be used for the payment of a pecuniary penalty imposed on an officer by an order under subsection 73BEN(2); or (b) reimburse the officer in respect of a pecuniary penalty imposed on the officer by an order under that subsection. Subdivision G—Miscellaneous 73BEP Jurisdiction The Court has jurisdiction to hear and determine applications under this Division and to make any necessary orders in respect of those applications. 21 Subsections 74(5), (5AA) and (5A) Repeal the subsections. 22 Subsection 74(10) Omit "the purposes of subsection (5) of this section", substitute "the purposes of any imposition of a sanction under Division 5". 23 Sections 74A and 74B Repeal the sections. 24 Section 75 Repeal the section, substitute: 75 Provision of services by organizations (1) If a registered organization provides, or arranges for the provision of, services or treatment of any kind for all or any of its contributors or dependants of those contributors, the Minister may, at the written request of the organization, direct that, to such extent as the Minister directs, the provision of those services or of that treatment is to be treated, for the purposes of this Act, as the payment by the organization of benefits in respect of those services or that treatment. (2) A request by a registered organization under subsection (1): (a) must be made by sending it to the Secretary; and (b) may specify the extent to which the organization desires to treat the provision of the services or treatment to which the request relates in the manner referred to in that subsection. (3) The Minister must, as soon as practicable after a request is made by a registered organization under subsection (1), give, or refuse to give, the direction requested by the organization. (4) As soon as practicable after the Minister gives a direction under subsection (1) in relation to an organization, the Minister must notify the organization accordingly and forward a copy of the direction to the organization. (5) As soon as practicable after the Minister refuses to give a direction that has been requested by an organization, the Minister must notify the organization accordingly. (6) If the Minister notifies an organization: (a) that the Minister has refused to give a direction requested by the organization; or (b) that the Minister has given a direction requested by the organization but has directed that the provision of the services or treatment concerned is to be treated in the manner referred to in subsection (1) otherwise than as specified in the request; the Minister must give to the organization, with the notification, particulars of the Minister's reasons for so doing. (7) This section applies in relation to an organization that has made an application for registration under this Part as if that organization were a registered organization, but any direction of the Minister given under this section with respect to that organization does not take effect unless and until that organization becomes a registered organization. 25 Subsection 78(1) Repeal the subsection, substitute: (1) If, after the registration of an organization under this Part, the registered organization changes its rules, the registered organization must ensure that the Secretary receives notification of the change in accordance with this section. 26 Paragraph 78(1A)(b) Repeal the paragraph, substitute: (b) in any other case—before the change is to come into effect. 27 Subsections 78(1C) and (2) Repeal the subsections, substitute: (2) The notification must be in writing in a form approved by the Minister. 28 Subsection 78(7) Repeal the subsection, substitute: (7) A registered organization that proposes to make any rule change that is, or could be, detrimental to the interests of all or any of its contributors must, before the rule change comes into effect, take all reasonable steps to ensure that affected contributors are informed of the nature of the change in terms that can reasonably be expected to be understood. 28A Saving provision A form approved by the Minister under subsection 78(1C) of the National Health Act 1953 that was in force immediately before the day of commencement of item 27 of this Schedule continues in force, on and after that day, as if it had been approved by the Minister under and for the purposes of subsection 78(2) of that Act as amended by item 27 of this Schedule. 29 Paragraph 82XF(2)(c) Omit "section 73BE", substitute "73BEJ". 30 Paragraph 82YO(2)(c) Omit "section 73BE", substitute "73BEJ". 31 Subsections 105AB(4), (4AAA) and (4AA) Repeal the subsections, substitute: (4) An application may be made to the Tribunal for review of a decision of the Minister under subsection 73BEB(4) refusing to extend the time limit for providing an explanation. (4AAA) An application may be made to the Tribunal for review of a decision of the Minister under subsection 73BEH(2) refusing to consent to the withdrawal or variation of a written undertaking given by a registered organization under Subdivision C of Part VI. (4AA) An application may be made to the Tribunal for review of a decision of the Minister under section 73BEJ directing a registered organization with respect to a matter. 32 Paragraphs 105AB(4A)(a) and (b) Omit "73D(1)", substitute "75(1)". 32A Schedule 1 (note appearing after the Schedule heading) Omit "73BA", substitute "73AAF". 33 Paragraph (b) of Schedule 1 Repeal the paragraph. 34 Before paragraph (ba) of Schedule 1 Insert: (1) The registration of an organization as a registered health benefits organization is subject, in addition to any conditions set out in other provisions of this Act, to the following conditions: 35 Paragraph (be) of Schedule 1 Repeal the paragraph. 36 Subparagraph (lb)(ii) of Schedule 1 Omit "declaration under subsection 73D(1)", substitute "direction under subsection 75(1)". 37 Paragraph (m) of Schedule 1 Repeal the paragraph. 37A Paragraph (ma) of Schedule 1 Omit "73BA(2A)", substitute "73AAG(2)". 38 Paragraph (w) of Schedule 1 Repeal the paragraph, substitute: (w) The organization will: (i) comply with determinations under section 73BB that are in force; and (ii) keep the records that the Council requires it to maintain so as to enable the Council to perform its functions in relation to the Health Benefits Reinsurance Trust Fund separate and distinct from any other records the organization maintains. 39 At the end of Schedule 1 Add: (2) In this Schedule, unless the contrary intention appears: medical practitioner includes: (a) an accredited dental practitioner; and (b) a dental practitioner approved by the Minister for the purposes of the definition of professional service in subsection 3(1) of the Health Insurance Act 1973; and (c) a person on whose behalf a medical practitioner (within the meaning of subsection 3(1) of the Health Insurance Act 1973), or a dental practitioner of a kind referred to in paragraph (a) or (b), renders a professional service. Private Health Insurance Incentives Act 1998 40 After paragraph 14A‑1(1)(c) Insert: or (d) refuses or fails to comply with: (i) a direction given by the Minister under Subdivision D of Division 5 of Part VI of the National Health Act 1953; or (ii) a community rating condition set out in section 73AAH, 73AAI or 73AAJ of that Act; Part 2—Amendments increasing powers of the Private Health Insurance Ombudsman National Health Act 1953 41 Subsection 82ZQ(1) Insert: records, in relation to a registered organization that is the subject of a complaint under Division 3 or an investigation under Division 4, includes: (a) the constitution and rules of the organization; and (b) the internal training manuals and related documents of the organization; and (c) any documents relevant to a private health insurance arrangement of the organization; and (d) to the extent that the complaint or investigation relates to the organization's dealings with a particular person—the organization's records relating to its dealings with that person including correspondence, internal memoranda, e‑mails, and recordings of taped conversations; whatever the date when those records came into existence. 42 After paragraph 82ZRC(c) Insert: (ca) to report to the Minister and to make recommendations to the Minister in accordance with the requirements of sections 82ZSDA and 82ZTCA; (cb) to report to the Minister or to the Department about the practices of particular registered organizations; 43 After section 82ZSA Insert: 82ZSAA Preliminary notification of complaint and power to examine records (1) On receiving a complaint in relation to a registered organization, the Health Insurance Ombudsman may: (a) inform the organization of the nature of the complaint; and (b) for the purpose of: (i) determining whether, and how best, to deal with the complaint under section 82ZSB, 82ZSBA or 82ZSC; or (ii) making a decision under 82ZSG not to investigate the complaint; request an officer of the organization to provide the Health Insurance Ombudsman with such records of the organization relating to the complaint as the Health Insurance Ombudsman specifies. (2) If the Health Insurance Ombudsman decides: (a) to try to effect a settlement of a complaint concerning a registered organization by mediation under paragraph 82ZSB(1)(a); or (b) to investigate the complaint under subsection 82ZSB(2); the Health Insurance Ombudsman may, for the purposes of that mediation or investigation, request an officer of the organization to provide to the Health Insurance Ombudsman, at any time during the conduct of that mediation or investigation, with such records, or such further records, of that organization relating to the complaint as the Health Insurance Ombudsman specifies for the purpose. (3) If the Health Insurance Ombudsman refers the investigation of a complaint to a registered organization under paragraph 82ZSB(1)(b), the Health Insurance Ombudsman may, after receiving a report by the organization of its findings and of any action it proposes to take, request an officer of the organization to provide the Health Insurance Ombudsman with such records, or such further records, of the organization relating to the complaint as the Health Insurance Ombudsman specifies for the purpose of evaluating the action proposed. (4) A request to provide records under subsection (1), (2) or (3) must specify the period within which the records in question are to be provided. (5) If the officer of the registered organization is unable to provide the records requested within the period specified by the Health Insurance Ombudsman, he or she must, within that period, explain to the Health Insurance Ombudsman why he or she is unable so to provide the records and request the Health Insurance Ombudsman to extend the period of time for providing those records. (6) On receipt of a request under subsection (5) to extend the period for provision of records, the Health Insurance Ombudsman must either: (a) extend the period for provision of those records to an extent considered appropriate in the light of that explanation; or (b) refuse to extend the period and indicate the reasons for the refusal. (7) The Health Insurance Ombudsman must not request the production under subsection (1), (2) or (3) of records that relate to a registered organization's dealings with a particular complainant unless the complainant agrees to the production of those records. (8) An officer of a registered organization must not fail to comply with a request made of the officer under subsection (1), (2) or (3). Penalty for an offence against this subsection: 10 penalty units. (9) An offence against subsection (8) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. (10) An officer of a registered organization is not excused from producing a record when required to do so under subsection (1), (2) or (3) on the ground that the production of the record might tend to incriminate the officer or make the officer liable to a penalty. However, the production of the record, or anything obtained as a direct or indirect consequence of the production, is not admissible in evidence against the officer in any proceedings, other than proceedings for an offence against subsection (11). (11) A person must not produce a record to the Health Insurance Ombudsman in accordance with a request made under subsection (1), (2) or (3) knowing that the record is false or misleading in a material particular. Penalty for an offence against this subsection: Imprisonment for 6 months. 44 Subparagraph 82ZSB(1)(b)(ii) After "the Health Insurance Ombudsman", insert ", within a period specified by the Health Insurance Ombudsman,". 45 After subsection 82ZSB(1) Insert: (1A) If: (a) a complaint is referred to a registered organization under paragraph (1)(b); and (b) the organization is of the view that it cannot conduct an investigation in relation to the complaint and report to the Health Insurance Ombudsman within the period specified by the Health Insurance Ombudsman; the organization must, within the period specified, explain to the Health Insurance Ombudsman why it is unable to complete those activities within that period and request the Health Insurance Ombudsman to extend the period concerned. (1B) On receipt of a request under subsection (1A) to extend the period for completion of the activities, the Health Insurance Ombudsman must either: (a) extend the period for completion of the activities to an extent considered appropriate in the light of that explanation; or (b) refuse to extend the period and indicate the reasons for the refusal. 46 At the end of section 82ZSD Add: (2) If the Health Insurance Ombudsman makes a recommendation to a registered organization under paragraph (1)(a) or (b), he or she may request that the public officer of the registered organization, before the registered organization: (a) takes any action to give effect to that recommendation; or (b) requests that a hospital, day hospital or medical practitioner takes any action to give effect to that recommendation; report to the Health Insurance Ombudsman, within a time specified in the recommendation, on the action proposed to be taken. (3) If the Health Insurance Ombudsman makes a recommendation to a hospital, day hospital or medical practitioner under paragraph (1)(c), he or she may request that the hospital, day hospital or medical practitioner, before taking any action to give effect to that recommendation, report to the Health Insurance Ombudsman, within a time specified in the recommendation, on the action proposed to be taken. (4) The public officer of a registered organization must not fail to report to the Health Insurance Ombudsman in accordance with a request under subsection (2). Penalty: 10 penalty units. (5) An offence under subsection (4) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. (6) The public officer of a registered organization must not make a report to the Health Insurance Ombudsman under subsection (2) knowing that the report is false or misleading in a material particular. Penalty: Imprisonment for 6 months. 47 After section 82ZSD Insert: 82ZSDA Report to Minister on outcome of investigations under subsection 82ZSB(2) (1) The Health Insurance Ombudsman may, after the completion of an investigation of a complaint concerning a particular registered organization under subsection 82ZSB(2): (a) report to the Minister on the outcome of the investigation (including any recommendations made to the registered organization and any responses to those recommendations); and (b) make recommendations to the Minister: (i) concerning general changes in regulatory practice and/or industry practices relating to registered organizations generally; or (ii) concerning possible means of dealing with specific problems arising in relation to the particular registered organization the subject of the investigation. (2) Before any report of the outcome of the investigation of complaints against a particular registered organization is made to the Minister, the Health Insurance Ombudsman must: (a) inform the registered organization concerned of the fact that the Health Insurance Ombudsman proposes to make the report and of the nature of any criticism of the conduct of the registered organization that will appear in the report; and (b) invite the registered organization to provide to him or her, within a period specified in the invitation, with an opportunity to comment on such criticism; and (c) include in the report any comments made by the registered organization. 48 Paragraph 82ZSE(1)(a) After "under section", insert "82ZSAA,". 49 Subsection 82ZTA(3) Repeal the subsection. 50 Section 82ZTB Repeal the section, substitute: 82ZTB Health Insurance Ombudsman may require production of records for purposes of an investigation (1) The Health Insurance Ombudsman may, for the purposes of an investigation of the practices and procedures of a registered organization under section 82ZT or 82ZTA, request an officer of the organization, at any time during the conduct of that investigation: (a) to give to the Health Insurance Ombudsman such information relating to those practices and procedures as the Health Insurance Ombudsman specifies for the purpose; or (b) to produce to the Health Insurance Ombudsman such of the records of the organization relating to those practices and procedures as the Health Insurance Ombudsman specifies for the purpose. (2) A request under subsection (1) to give information or produce records must specify the period within which the information is to be given or the records are to be produced. (3) If the officer of the registered organization is unable to give the information or to produce the records requested within the period specified by the Health Insurance Ombudsman, the officer must, within that period, explain to the Health Insurance Ombudsman why he or she is unable so to give that information or produce those records and request the Health Insurance Ombudsman to extend the period for giving the information or producing those records. (4) On receipt of a request under subsection (3), the Health Insurance Ombudsman must either: (a) extend the period to an extent considered appropriate in light of the explanation; or (b) refuse to extend the period and indicate the reasons for the refusal. (5) The Health Insurance Ombudsman must not, under subsection (1), request: (a) the giving of information; or (b) the production of records; that relate to a particular individual or particular individuals who are, or who have sought to become, contributors to the health benefits fund conducted by the organization unless that person or those persons agree to the production of those records. (6) An officer of a registered organization must not fail to comply with a request made of the officer under subsection (1). Penalty for an offence against this subsection: 10 penalty units. (7) An offence under subsection (6) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. (8) An officer of a registered organization is not excused from giving information or producing a record when required to do so under subsection (1) on the ground that the information, or the production of the record, might tend to incriminate the officer or make the officer liable to a penalty. However, the information, or the production of the record, or anything obtained as a direct or indirect consequence of the giving of the information or the production of the record, is not admissible in evidence against the officer in any proceedings, other than proceedings for an offence against subsection (9). (9) An officer of a registered organization must not produce a record to the Health Insurance Ombudsman in accordance with a request made under subsection (1) knowing that the record is false or misleading in a material particular. Penalty for an offence against this subsection: Imprisonment for 6 months. 51 Subsection 82ZTC(2) Repeal the subsection, substitute: (2) If the Health Insurance Ombudsman makes a recommendation to a registered organization under paragraph (1)(a), he or she may request that the public officer of the registered organization, before the registered organization takes any action or changes its rules to give effect to that recommendation, report to the Health Insurance Ombudsman, within a time specified in the recommendation, on the action proposed to be taken or the rule change proposed to be made. (3) If the Health Insurance Ombudsman makes a recommendation to a hospital, day hospital or medical practitioner under paragraph (1)(b), he or she may request that the hospital, day hospital or medical practitioner, before taking any action to give effect to that recommendation, report to the Health Insurance Ombudsman, within a time specified in the recommendation, on the action proposed to be taken. (4) The public officer of a registered organization must not fail to report to the Health Insurance Ombudsman in accordance with a request under subsection (2). Penalty for an offence against this subsection: 10 penalty units. (5) An offence under subsection (4) is an offence of strict liability. Note: For strict liability, see section 6.1 of the Criminal Code. (6) The public officer of a registered organization must not make a report to the Health Insurance Ombudsman under subsection (2) knowing that the report is false or misleading in a material particular. Penalty for an offence against this subsection: Imprisonment for 6 months. 52 After section 82ZTC Insert: 82ZTCA Report to the Minister on outcome of investigations under section 82ZT and 82ZTA (1) The Health Insurance Ombudsman may, after the completion of an investigation of the practices and procedures of a particular registered organization under section 82ZT, and must, after the completion of an investigation of the practices and procedures of a particular registered organization under section 82ZTA: (a) report to the Minister on the outcome of the investigation (including any recommendations made to the registered organization); and (b) make recommendations to the Minister: (i) concerning general changes in regulatory practice and/or industry practices relating to registered organizations generally; or (ii) concerning possible means of dealing with specific problems arising in relation to the particular registered organization the subject of the investigation. (2) Before any report of the outcome of the investigation of the practices and procedures of a particular registered organization is made to the Minister, the Health Insurance Ombudsman must: (a) inform the registered organization concerned of the fact that the Health Insurance Ombudsman proposes to make the report and of the nature of any criticism of the conduct of the registered organization that will appear in the report; and (b) invite the registered organization to provide to him or her, within a period specified in the invitation, any comment on such criticism that it wishes to make; and (c) include in the report any comments made by the registered organization. 53 After subsection 105AB(6AB) Insert: (6AC) An application may be made to the Tribunal for review of a decision by the Health Insurance Ombudsman: (a) under subsection 82ZSAA(6) refusing to extend the time for provision of records; or (b) under subsection 82ZSB(1B) refusing to extend the period for investigation and report to the Health Insurance Ombudsman; or (c) under subsection 82ZTB(4) refusing to extend the period for provision of records. 54 Application and transitional provisions (1) The amendments made by Part 2 of this Schedule apply in relation to: (a) any complaint in relation to a registered organization: (i) that is made to the Health Insurance Ombudsman under section 82ZS of the National Health Act 1953 on or after the day on which this Act receives the Royal Assent; or (ii) that is made to the Health Insurance Ombudsman under that section before that day but that is not acted on before that day; or (b) any investigation of the practices and procedures of a registered organization that is commenced by the Health Insurance Ombudsman on his or her own initiative under section 82ZT of that Act on or after the day on which this Act receives the Royal Assent; or (c) any investigation of the practices and procedures of a registered organization: (i) that is the subject of a request by the Minister made under section 82ZTA of that Act on or after the day on which this Act receives the Royal Assent; or (ii) that is the subject of such a request made before that day but that has not been acted on before that day. (2) The provisions of the National Health Act 1953 continue to apply in relation to: (a) any complaint made to the Health Insurance Ombudsman under section 82ZS of the National Health Act 1953 that is not covered by paragraph (1)(a); or (b) any investigation of the practices and procedures of a registered organization commenced by the Health Insurance Ombudsman on his or her own initiative under section 82ZT of that Act that is not covered by paragraph (1)(b); or (c) any investigation of the practices and procedures of a registered organization commenced by the Health Insurance Ombudsman at the request of the Minister under section 82ZTA of that Act that is not covered by paragraph (1)(c); as if the amendments made by Part 2 of this Schedule had not been made. Part 3—Amendments relating to annual State of the Health Funds Report National Health Act 1953 55 After paragraph 82G(1)(sa) Insert: (sb) to provide the Private Health Insurance Ombudsman, from time to time, with information in the possession of the Council that is, in the view of the Council, likely to be of use in the production, after the end of each financial year, of the State of the Health Funds Report referred to in paragraph 82ZRC(ba); 56 After paragraph 82ZRC(b) Insert: (ba) to publish in written form and on its website, as soon as practicable after the end of each financial year, a report, called the State of the Health Funds Report, providing comparative information on the performance and service delivery of all registered organizations during that financial year; 57 Before paragraph (hb) of Schedule 1 Insert: (hac) The organization will, on a State‑by‑State basis, produce and maintain, in written form and on its website, information: (i) as to the production, by the Private Health Insurance Ombudsman, of the annual State of the Health Funds Report, to assist consumers in assessing the relative performance and service delivery of each of the registered organizations; and (ii) as to the means of accessing this Report at the office, or on the website, of the Private Health Insurance Ombudsman. Part 4—Amendments relating to lifetime health cover National Health Act 1953 58 Subclause 1(2) of Schedule 2 Repeal the subclause, substitute: (2) The amount of the increase is worked out as follows: where: base rate is the amount of contributions that would be payable for that hospital cover in respect of an adult beneficiary in respect of whom: (a) contributions are not increased under this Schedule; and (b) contributions are not decreased through providing financial benefits under a loyalty bonus scheme implemented in accordance with paragraph (ma) of Schedule 1; and (c) a discounted rate of contribution is not payable in accordance with paragraph (s) of Schedule 1. lifetime health cover age, in relation to an adult beneficiary who takes out hospital cover after his/her Schedule 2 application day means: (a) if the beneficiary took out hospital cover before the 1 July next following the beneficiary's birthday—the beneficiary's age immediately before that birthday; and (b) if the beneficiary took out health cover on or after the 1 July next following the beneficiary's birthday—the beneficiary's age on that birthday. Example: Bill turns 36 years of age on 2 March 2004: (a) he takes out hospital cover, for the first time, on 1 April 2004. Since he has taken the cover before the 1 July next following his birthday, he is treated as having a lifetime health cover age of 35. If the hospital cover has a base rate of $1,000 per year, the amount of the increase in the base rate under this clause is therefore as follows: (b) alternatively, he takes out hospital cover, for the first time, on 1 September 2004. Since he has taken the cover after the 1 July next following his birthday, he is treated as having lifetime health cover age of 36. If the hospital cover has a base rate of $1,000 per year, the amount of the increase in the base rate under this clause is therefore as follows: 59 Saving provision Despite the amendment of clause 1 of Schedule 2 to the National Health Act 1953 made by item 58 of this Schedule, clause 1 of Schedule 2 to the National Health Act 1953 as in force immediately before that amendment comes into effect continues to apply in relation to a person who first takes out hospital cover before the day on which that item comes into effect as if that amendment had never been made. 60 After paragraph 3(1)(a) of Schedule 2 Insert: (ab) days during which the adult beneficiary is overseas that form part of a continuous period overseas of more than one year; 61 Subparagraph 3(2)(a)(i) of Schedule 2 Omit "paragraph (1)(b)", substitute "paragraph (1)(ab) or (b)". 62 At the end of clause 3 of Schedule 2 Add: (3) A person resident on Norfolk Island is taken, while the person so resides, to be overseas for the purposes of this Schedule. (4) In determining whether a period during which an adult beneficiary is overseas is a continuous period, any period during which the adult beneficiary returns to Australia that is of less than 90 days' duration counts as part of the period overseas. 63 Subclause 4(2) of Schedule 2 Repeal the subclause, substitute: (2) A person is taken to have hospital cover: (a) if, at any time after 30 June 1999, the person was or is the holder of a gold card under the Veterans' Entitlements Act 1986—for the duration of any period that the person held or holds the card; or (b) if the person is included in a class of persons specified in the regulations. (3) In this clause: gold card means a card that evidences a person's entitlement to be provided with treatment in accordance with the Treatment Principles issued under section 90 of the Veterans' Entitlements Act 1986. 64 Saving provisions (1) Any regulations made for the purposes of subclause 4(2) of Schedule 2 to the National Health Act 1953 that were in force immediately before the day of commencement of item 63 of this Schedule continue in force, on and after that day, as if they had been made under and for the purposes of paragraph 4(2)(b) of that Schedule as amended by that item. (2) Despite the amendment made by item 63 of this Schedule, if, in respect of any period between 1 July 2000 and the commencement of that amendment, the base rate of hospital cover provided by a registered organization to a person who is holding, or has held, a gold card has been increased in accordance with clause 1 of Schedule 2 to the National Health Act 1953, that increase is taken to have been validly applied in relation to that period. (3) In this item: gold card has the same meaning as it has for the purposes of subclause 4(3) of Schedule 2 to the National Health Act 1953. 65 Paragraph 5(1)(b) of Schedule 2 Repeal the paragraph, substitute: (b) if the adult beneficiary turned 31 years of age after 1 July 2000 but before the mainstream amendment day and there is no provision under this clause for a later day to be the Schedule 2 application day—the day he or she turned 31 years of age; or 66 After paragraph 5(1)(b) of Schedule 2 Insert: (ba) if the adult beneficiary turned 31 years of age on or after the mainstream amendment day and there is no provision under this clause for a later day to be the Schedule 2 application day—the 1 July next following the day he or she turned 31 years of age; or 67 Paragraph 5(1)(c) of Schedule 2 Omit all the words after subparagraph (ii), substitute: and he or she turned 31 years of age before the special categories amendment day—the day that is the later of: (iii) the day on which he or she turned 31 years of age; and (iv) the first anniversary of the day he or she became eligible for Medicare benefits; or 68 After paragraph 5(1)(c) of Schedule 2 Insert: (ca) if the adult beneficiary either: (i) entered or enters Australia on a Refugee and Humanitarian (Migrant) (Class BA) visa issued on or after 1 January 2000; or (ii) was or is granted a protection visa within the meaning of section 36 of the Migration Act 1958 after entering Australia on or after 1 January 2000; and he or she turns 31 years of age on or after the special categories amendment day—the day that is the later of: (iii) the 1 July next following the day on which he or she turned 31 years of age; and (iv) the first anniversary of the day on which he or she became eligible for Medicare benefits; or (cb) if the adult beneficiary enters Australia as a new arrival within the meaning of subclause 5(2A) (other than a new arrival to whom paragraph (1)(c) or (ca) applies) and became eligible for Medicare benefits after 30 September 1999 but before the special categories amendment day—the day that is the latest of: (i) the 1 July next following the day on which he or she turned 31 years of age; and (ii) the first anniversary of the special categories amendment day; and (iii) if the person was a citizen of New Zealand before entering Australia as a new arrival within the meaning of subclause 5(2A)—the first anniversary of the day that the Health Insurance Commission makes the determination that the person is eligible for Medicare benefits; or (cc) if the adult beneficiary enters Australia as a new arrival within the meaning of subclause 5(2A) (other than a new arrival to whom paragraph (1)(c) or (ca) applies) and becomes eligible for Medicare benefits after the special categories amendment day—the day that is the latest of: (i) the 1 July next following the day on which he or she turned 31 years of age; and (ii) the first anniversary of the day on which he or she became eligible for Medicare benefits; and (iii) if the person was a citizen of New Zealand before entering Australia as a new arrival within the meaning of subclause 5(2A)—the first anniversary of the day on which the Health Insurance Commission makes the determination that the person is eligible for Medicare benefits; or 69 At the end of subclause 5(1) of Schedule 2 Add: ; or (e) if the adult beneficiary: (i) is an Australian citizen or the holder of a permanent visa within the meaning of the Migration Act 1958; and (ii) is absent from Australia on the day, occurring after 1 January 2000, on which he or she turned 31 years of age; and (iii) if not resident overseas, has not returned to Australia since turning 31 years of age; and (iv) is not an adult beneficiary to whom paragraph (d) applies; the day that is the later of: (v) the first anniversary of the day the person returned to Australia; and (vi) the first anniversary of the special categories amendment day. 70 Subclause 5(2) of Schedule 2 Omit "or a person who is treated as an eligible person because of section 6 or 7 of that Act". 71 After subclause 5(2) of Schedule 2 Insert: (2A) A person is taken to have entered Australia as a new arrival within the meaning of this subclause if, at the time of the person's entry into Australia, the person: (a) is the holder of a permanent visa within the meaning of the Migration Act 1958; or (b) is a New Zealand citizen who is lawfully present in Australia; or (c) is a person: (i) who is the holder of a temporary visa within the meaning of the Migration Act 1958; and (ii) who has made application for a permanent visa under the Migration Act 1958 and the application has not been withdrawn or otherwise finally determined; and (iii) in respect of whom either an authority to work in Australia is in force, or another person (being the person's spouse, parent or child) is an Australian or the holder of a permanent visa under the Migration Act 1958. (2B) A person who is overseas is taken to have returned to Australia for the purposes of this clause if the person returns for a period of at least 90 days. 72 At the end of clause 5 of Schedule 2 Add: (3) In this clause: mainstream amendment day means the day fixed by Proclamation as the day of commencement of the amendments of Schedule 2 to this Act made by items 58, 65 and 66 of Schedule 1 to the Health Legislation Amendment (Private Health Insurance Reform) Act 2004. special categories amendment day means the day fixed by Proclamation as the day of commencement of the amendments of Schedule 2 to this Act made by items 67 to 69 and 71 of Schedule 1 to the Health Legislation Amendment (Private Health Insurance Reform) Act 2004. 73 Transitional provisions (1) If an adult beneficiary: (a) enters Australia as a new arrival to whom paragraph 5(1)(cb) of Schedule 2 to the National Health Act 1953 applies; and (b) the adult beneficiary has hospital cover immediately before the special categories amendment day; and (c) the base rate of that hospital cover has been increased in accordance with clause 1 of Schedule 2 to the National Health Act 1953; then, with effect from the special categories amendment day, the base rate of hospital cover is to be altered to the rate that would have applied if that cover had been obtained before the adult beneficiary had turned 31 years of age. (2) If: (a) an adult beneficiary is a person to whom paragraph 5(1)(e) of Schedule 2 to the National Health Act 1953 applies; and (b) the adult beneficiary returned to Australia before the special categories amendment day; and (c) the adult beneficiary had hospital cover immediately before the special categories amendment day; and (d) the base rate of that hospital cover has been increased in accordance with clause 1 of Schedule 2 to the National Health Act 1953; then, with effect from the special categories amendment day, the base rate of hospital cover is to be altered to the rate that would have applied if that cover had been obtained before the adult beneficiary had turned 31 years of age. (3) In this item: adult beneficiary has the same meaning as in subsection 4(1) of the National Health Act 1953. base rate has the same meaning as in subclause 1(2) of Schedule 2 to the National Health Act 1953. hospital cover has the same meaning as in clause 4 of Schedule 2 to the National Health Act 1953. special categories amendment day has the same meaning as in subclause 5(3) of Schedule 2 to the National Health Act 1953. (4) A reference in this item to the return to Australia of an adult beneficiary is to be construed in the same manner as that reference is construed for the purposes of clause 5 of Schedule 2 to the National Health Act 1953. [Minister's second reading speech made in— Senate on 6 March 2003 House of Representatives on 5 December 2003 a.m.] (13/03)