Commonwealth: Private Health Insurance Act 2007 (Cth)

Private Health Insurance Act 2007 No. 31, 2007 Compilation No. 38 Compilation date: 15 February 2025 Includes amendments: Act No. 8, 2025 About this compilation This compilation This is a compilation of the Private Health Insurance Act 2007 that shows the text of the law as amended and in force on 15 February 2025 (the compilation date). The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law. Uncommenced amendments The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the Register for the compiled law. Application, saving and transitional provisions for provisions and amendments If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes. Editorial changes For more information about any editorial changes made in this compilation, see the endnotes. Modifications If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the Register for the compiled law. Self‑repealing provisions If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes. Contents Chapter 1—Introduction Part 1‑1—Introduction Division 1—Preliminary 1‑1 Short title 1‑5 Commencement 1‑10 Identifying defined terms 1‑15 Extension to Norfolk Island Division 3—Overview of this Act 3‑1 What this Act is about 3‑5 Incentives (Chapter 2) 3‑10 Complying health insurance products (Chapter 3) 3‑15 Health insurance business, health benefits funds and miscellaneous obligations of private health insurers (Chapter 4) 3‑20 Enforcement (Chapter 5) 3‑25 Administration (Chapter 6) 3‑30 Dictionary (Schedule 1) Division 5—Constitutional matters 5‑1 Meaning of insurance 5‑5 Act not to apply to State insurance within that State 5‑10 Compensation for acquisition of property Chapter 2—Incentives Part 2‑1—Introduction Division 15—Introduction 15‑1 What this Chapter is about Part 2‑2—Premiums reduction scheme Division 20—Introduction 20‑1 What this Part is about 20‑5 Private Health Insurance (Incentives) Rules Division 22—PHIIB, PHII benefit and related concepts Subdivision 22‑A—PHIIB, PHII benefit and related concepts 22‑1 Application of Subdivision 22‑5 Meaning of PHIIB 22‑10 Meaning of PHII benefit 22‑15 Meaning of share of the PHII benefit—single PHIIB 22‑20 Meaning of share of the PHII benefit—multiple PHIIBs 22‑25 Application of subsection 22‑15(1) after a person 65 years or over ceases to be covered by policy Subdivision 22‑B—Private health insurance tiers 22‑30 Private health insurance tiers 22‑35 Private health insurance singles thresholds 22‑40 Private health insurance family thresholds 22‑45 Indexation Division 23—Premiums reduction scheme Subdivision 23‑A—Amount of reduction 23‑1 Reduction in premiums Subdivision 23‑B—Participation in the premiums reduction scheme 23‑15 Registration as a participant in the premiums reduction scheme 23‑20 Refusal to register 23‑30 Participants who want to withdraw from scheme 23‑35 Revocation of registration 23‑40 Variation of registration 23‑45 Retention of applications by private health insurers Part 2‑3—Lifetime health cover Division 31—Introduction 31‑1 What this Part is about 31‑5 Private Health Insurance (Lifetime Health Cover) Rules Division 34—General rules about lifetime health cover 34‑1 Increased premiums for person who is late in taking out hospital cover 34‑5 Increased premiums for person who ceases to have hospital cover after his or her lifetime health cover base day 34‑10 Increased premiums stop after 10 years' continuous cover 34‑15 Meaning of hospital cover 34‑20 Meaning of permitted days without hospital cover 34‑25 Meaning of lifetime health cover base day 34‑30 When a person is overseas or enters Australia Division 37—Exceptions to the general rules about lifetime health cover 37‑1 People born on or before 1 July 1934 37‑5 People over 31 and overseas on 1 July 2000 37‑7 Person yet to turn 31 37‑10 Hardship cases 37‑15 Increases cannot exceed 70% of base rates 37‑20 Joint hospital cover Division 40—Administrative matters relating to lifetime health cover 40‑1 Notification to insured people etc. 40‑5 Evidence of having had hospital cover, or of a person's age Part 2‑4—Excess levels for medicare levy and medicare levy surcharge purposes Division 42—Introduction 42‑1 What this Part is about Division 45—Excess levels for medicare levy and medicare levy surcharge purposes 45‑1 Excess level amounts Chapter 3—Complying health insurance products Part 3‑1—Introduction Division 50—Introduction 50‑1 What this Chapter is about 50‑5 Private Health Insurance Rules relevant to this Chapter Part 3‑2—Community rating Division 55—Principle of community rating 55‑1 What this Part is about 55‑5 Principle of community rating 55‑10 Closed products, and terminated products and product subgroups 55‑15 Pilot projects Part 3‑3—Requirements for complying health insurance products Division 60—Introduction 60‑1 What this Part is about Division 63—Basic rules about complying health insurance products 63‑1 Obligation to ensure products are complying products 63‑5 Meaning of complying health insurance product 63‑10 Meaning of complying health insurance policy Division 66—Community rating requirements 66‑1 Community rating requirements 66‑5 Premium requirement 66‑10 Minister's approval of premiums 66‑15 Entitlement to benefits for general treatment 66‑20 Different amount of benefits depending on where people live 66‑25 Different amounts of benefits for travel or accommodation Division 69—Coverage requirements 69‑1 Coverage requirements 69‑5 Meaning of cover 69‑10 Meaning of hospital‑substitute treatment Division 72—Benefit requirements for policies that cover hospital treatment 72‑1 Benefit requirements 72‑5 Rules requirement in relation to provision of benefits 72‑10 Minimum benefits for medical devices and human tissue products 72‑11 Meaning of medical device 72‑12 Meaning of human tissue product 72‑15 Fees for certain activities 72‑20 Delisting because of unpaid fees or levy 72‑25 Minister may direct that activities not be carried out 72‑27 Matters to have regard to before exercising certain powers 72‑30 When cost‑recovery fee must be paid 72‑35 Payment of cost‑recovery fee 72‑40 Recovery of fee 72‑45 Other matters Division 75—Waiting period requirements 75‑1 Waiting period requirements 75‑5 Meaning of waiting period 75‑10 Meaning of transfers 75‑15 Meaning of pre‑existing condition Division 78—Portability requirements 78‑1 Portability requirements Division 81—Quality assurance requirements 81‑1 Quality assurance requirements Division 84—Enforcement of this Part 84‑1 Offence: advertising, offering or insuring under non‑complying policies 84‑5 Offence: directors and chief executive officers liable if systems not in place to prevent breaches 84‑10 Injunction in relation to non‑complying policies 84‑15 Remedies for people affected by non‑complying policies Part 3‑4—Obligations relating to complying health insurance products Division 90—Introduction 90‑1 What this Part is about Division 93—Giving information to consumers 93‑1 Maintaining up to date private health information statements 93‑5 Meaning of private health information statement 93‑10 Making private health information statements available 93‑15 Giving information to newly insured people 93‑20 Keeping insured people up to date 93‑25 Giving advance notice of detrimental changes to rules 93‑30 Failure to give information to consumers Division 96—Giving information to the Department and the Private Health Insurance Ombudsman 96‑1 Giving private health information statements on request 96‑5 Giving private health information statements for new products 96‑10 Giving updated private health information statements 96‑15 Giving additional information on request 96‑20 Failure to give information to Department or Private Health Insurance Ombudsman 96‑25 Giving information required by the Private Health Insurance (Complying Product) Rules Division 99—Transfer certificates 99‑1 Transfer certificates Division 102—Private health insurers to offer cover for hospital treatment 102‑1 Private health insurers to offer cover for hospital treatment Chapter 4—Health insurance business, health benefits funds and miscellaneous obligations of private health insurers Part 4‑1—Introduction Division 110—Introduction 110‑1 What this Chapter is about Part 4‑2—Health insurance business Division 115—Introduction 115‑1 What this Part is about 115‑5 Private Health Insurance (Health Insurance Business) Rules 115‑10 Whether a business etc. is health insurance business Division 121—What is health insurance business? 121‑1 Meaning of health insurance business 121‑5 Meaning of hospital treatment 121‑7 Conditions on declarations of hospitals 121‑8 Application for inclusion of hospital in a class 121‑8A Minister to decide application 121‑8B Period of inclusion of hospital in a class 121‑8C Revocation of inclusion of hospital in a class 121‑8D Private Health Insurance (Health Insurance Business) Rules 121‑10 Meaning of general treatment 121‑15 Extension to employee health benefits schemes 121‑20 Exception: accident and sickness insurance business 121‑25 Exception: liability insurance business 121‑30 Exception: insurance business excluded by the Private Health Insurance (Health Insurance Business) Rules Part 4‑4—Health benefits funds Division 131—Health benefits funds 131‑1 What this Part is about 131‑5 Private Health Insurance (Health Benefits Fund Policy) Rules 131‑10 Meaning of health benefits fund 131‑15 Meaning of health‑related business 131‑20 Risk equalisation jurisdictions 131‑25 Operation of health‑related businesses through health benefits funds Part 4‑5—Miscellaneous obligations of private health insurers Division 157—Introduction 157‑1 What this Part is about 157‑5 Private Health Insurance (Data Provision) Rules Division 169—Notification obligations 169‑10 Private health insurers to notify any changes to rules Division 172—Other obligations 172‑5 Agreements with medical practitioners 172‑10 Private health insurers to give information to Secretary 172‑15 Restrictions on payment of pecuniary penalties etc. Chapter 5—Enforcement Part 5‑1—Introduction Division 180—Introduction 180‑1 What this Chapter is about Part 5‑2—General enforcement methods Division 185—What this Part is about 185‑1 Introduction 185‑5 Meaning of enforceable obligation Division 188—Performance indicators 188‑1 Performance indicators Division 191—Explanation of private health insurer's operations 191‑1 Minister may seek an explanation from a private health insurer 191‑5 Minister must respond to insurer's explanation Division 194—Investigation of private health insurer's operations 194‑1A Purposes for which powers may be exercised etc. 194‑1 Minister may investigate a private health insurer 194‑5 Notice to give information 194‑10 Notice to produce documents 194‑15 Notice to give evidence 194‑20 Offences in relation to investigation notices 194‑25 Authorisation to examine books and records etc. 194‑35 Minister must notify outcome of investigation Division 197—Enforceable undertakings 197‑1 Minister may accept written undertakings given by a private health insurer 197‑5 Enforcement of undertakings Division 200—Ministerial directions 200‑1 Minister may give directions 200‑5 Direction requirements Division 203—Remedies in the Federal Court 203‑1 Minister may apply to the Federal Court 203‑5 Declarations of contravention 203‑10 Pecuniary penalty order 203‑15 Compensation order 203‑20 Adverse publicity order 203‑25 Other order 203‑30 Time limit for declarations and orders 203‑35 Civil evidence and procedure rules for declarations and orders 203‑40 Civil proceedings after criminal proceedings 203‑45 Criminal proceedings during civil proceedings 203‑50 Criminal proceedings after civil proceedings 203‑55 Evidence given in proceedings for penalty not admissible in criminal proceedings 203‑60 Minister may require person to assist 203‑65 Relief from liability for contravening an enforceable obligation 203‑70 Powers of Federal Court Division 206—Revoking entitlement to offer rebate as a premium reduction 206‑1 Revocation of status of participating insurer Chapter 6—Administration Part 6‑1—Introduction Division 230—Introduction 230‑1 What this Chapter is about Part 6‑4—Administration of premiums reduction scheme Division 276—Introduction 276‑1 What this Part is about Division 279—Reimbursement of participating insurers and powers of Chief Executive Medicare Subdivision 279‑A—Reimbursement of private health insurers for premiums reduced under scheme 279‑1 Participating insurers may claim reimbursement 279‑5 Participating insurers 279‑10 Requirements for claims 279‑15 Amounts payable to the private health insurer 279‑20 Notifying private health insurers if amount is not payable 279‑25 Additional payment if insurer claims less than entitlement 279‑30 Additional payment if insurer makes a late claim 279‑35 Content and timing of application 279‑40 Decision on application 279‑45 Reconsideration of decisions Subdivision 279‑B—Powers of Chief Executive Medicare in relation to participating insurers 279‑50 Audits by Chief Executive Medicare 279‑55 Chief Executive Medicare may require production of applications Division 282—Recovery of amounts and other matters Subdivision 282‑A—When and how payments can be recovered 282‑1 Recovery of payments 282‑5 Interest on amounts recoverable 282‑10 Chief Executive Medicare may set off debts against amounts payable 282‑15 Reconsideration of certain decisions under this Division Subdivision 282‑AA—Recovery of certain amounts by Commissioner of Taxation 282‑16 Administration of this Subdivision by Commissioner of Taxation 282‑17 Subdivision operates in addition to Subdivision 282‑A 282‑18 Liability for excess private health insurance premium reduction or refund 282‑19 When general interest charge payable Subdivision 282‑B—Miscellaneous 282‑20 Notification requirements—private health insurers 282‑25 Use etc. of information relating to another person 282‑30 Information to be provided to the Commissioner of Taxation 282‑35 Delegation 282‑40 Appropriation Part 6‑6—Private health insurance levies Division 304—Introduction 304‑1 What this Part is about 304‑5 Private Health Insurance (Levy Administration) Rules 304‑10 Meaning of private health insurance levy Division 307—Collection and recovery of private health insurance levies 307‑1 When private health insurance levy must be paid 307‑5 Late payment penalty 307‑10 Payment of levy and late payment penalty 307‑15 Recovery of levy and late payment penalty 307‑20 Waiver of late payment penalty 307‑30 Other matters Division 310—Returns, requesting information and keeping records: private health insurers 310‑1 Returns relating to complaints levy 310‑5 Insurer must keep records 310‑10 Power to request information from insurer Division 313—Power to enter premises and search for documents related to complaints levy 313‑1 Authorised officer may enter premises with consent 313‑5 Authorised officer may enter premises under warrant 313‑10 Announcement before entry 313‑15 Executing a warrant to enter premises 313‑20 Identity cards Part 6‑7—Private Health Insurance Risk Equalisation Special Account Division 318—Private Health Insurance Risk Equalisation Special Account 318‑1 Private Health Insurance Risk Equalisation Special Account 318‑5 Credits to the Risk Equalisation Special Account 318‑10 Purpose of the Risk Equalisation Special Account 318‑15 Record keeping Part 6‑8—Disclosure of information Division 323—Disclosure of information 323‑1 Prohibition on disclosure of information 323‑5 Authorised disclosure: official duties 323‑10 Authorised disclosure: sharing information about insurers among agencies 323‑15 Authorised disclosure: sharing information about insurers other than among agencies 323‑20 Authorised disclosure: public interest 323‑25 Authorised disclosure: by the Secretary if authorised by affected person 323‑30 Authorised disclosure: court proceedings 323‑40 Offence: disclosure of information obtained by certain authorised disclosures 323‑45 Offence: soliciting disclosure of information 323‑50 Offence: use etc. of unauthorised information 323‑55 Offence: offering to supply protected information Part 6‑9—Review of decisions Division 328—Review of decisions 328‑1 What this Part is about 328‑5 ART review of decisions Part 6‑10—Miscellaneous Division 333—Miscellaneous 333‑1 Delegation by Minister 333‑5 Delegation by Secretary 333‑10 Approved forms 333‑15 Signing approved forms 333‑20 Private Health Insurance Rules made by the Minister 333‑25 Private Health Insurance Rules made by APRA 333‑30 Regulations Schedule 1—Dictionary 1 Dictionary Endnotes Endnote 1—About the endnotes Endnote 2—Abbreviation key Endnote 3—Legislation history Endnote 4—Amendment history An Act to regulate private health insurance, and for related purposes Chapter 1—Introduction Part 1‑1—Introduction Division 1—Preliminary 1‑1 Short title This Act may be cited as the Private Health Insurance Act 2007. 1‑5 Commencement This Act commences on 1 April 2007. 1‑10 Identifying defined terms (1) Many of the terms in this Act are defined in the Dictionary in Schedule 1. (2) Most of the terms that are defined in the Dictionary are identified by an asterisk appearing at the start of the term: as in "*health benefits fund". The footnote with the asterisk contains a signpost to the Dictionary. (3) An asterisk usually identifies the first occurrence of a term in a section (if not divided into subsections), subsection, definition, table item or diagram. Later occurrences of the term in the same provision are not usually asterisked. (4) Terms are not asterisked in headings, notes, examples or guides. (5) If a term is not identified by an asterisk, disregard that fact in deciding whether or not to apply to that term a definition or other interpretation provision. (6) The following basic terms used throughout the Act are not identified with an asterisk: Terms that are not identified with an asterisk Item This term ... is defined in ... 2 Federal Court the Dictionary in Schedule 1 3 insurance section 5‑1 4 Chief Executive Medicare the Dictionary in Schedule 1 5 Private Health Insurance Ombudsman the Dictionary in Schedule 1 6 private health insurer the Dictionary in Schedule 1 1‑15 Extension to Norfolk Island This Act extends to Norfolk Island. Division 3—Overview of this Act 3‑1 What this Act is about This Act is about private health insurance. It: (a) provides incentives to encourage people to have private health insurance; and (b) sets out rules governing private health insurance *products. Note: The Private Health Insurance (Prudential Supervision) Act 2015 sets out the registration process for private health insurers, imposes requirements about how private health insurers conduct health insurance business and deals with other matters in relation to the prudential supervision of private health insurers. 3‑5 Incentives (Chapter 2) Chapter 2 provides the following incentives: (a) reductions in premiums for *complying health insurance policies; (c) a lifetime health cover scheme, under which premiums may rise for people who do not maintain private health insurance from an early age. 3‑10 Complying health insurance products (Chapter 3) Chapter 3 requires insurers who make private health insurance available to people to do so in a non‑discriminatory way, to offer *products that comply with this Act, and to meet certain other obligations imposed by this Act in relation to those products. 3‑15 Health insurance business, health benefits funds and miscellaneous obligations of private health insurers (Chapter 4) Chapter 4 defines the key concepts of *health insurance business and *health benefits funds. It also deals with some related matters and imposes miscellaneous obligations on private health insurers. 3‑20 Enforcement (Chapter 5) Chapter 5 provides for a range of enforcement mechanisms aimed at monitoring and ensuring compliance with this Act and protecting the interests of *policy holders. 3‑25 Administration (Chapter 6) Chapter 6 contains administrative and machinery provisions relating to the operation of this Act. 3‑30 Dictionary (Schedule 1) The Dictionary in Schedule 1 contains definitions of terms used throughout this Act. Division 5—Constitutional matters 5‑1 Meaning of insurance In this Act: insurance means insurance to which paragraph 51(xiv) of the Constitution applies. 5‑5 Act not to apply to State insurance within that State This Act does not apply with respect to State insurance that does not extend beyond the limits of the State concerned. 5‑10 Compensation for acquisition of property (1) If the operation of this Act would result in an acquisition of property from a person otherwise than on just terms, the Commonwealth is liable to pay a reasonable amount of compensation to the person. (2) If the Commonwealth and the person do not agree on the amount of the compensation, the person may institute proceedings in the Federal Court for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines. (3) In this section: acquisition of property has the same meaning as in paragraph 51(xxxi) of the Constitution. just terms has the same meaning as in paragraph 51(xxxi) of the Constitution. Chapter 2—Incentives Part 2‑1—Introduction Division 15—Introduction 15‑1 What this Chapter is about This Chapter contains the following incentives to encourage people to have private health insurance: (a) reductions in premiums (see Division 23); (c) lifetime health cover (see Part 2‑3). Part 2‑2—Premiums reduction scheme Division 20—Introduction 20‑1 What this Part is about To encourage people to take out, and continue to hold, private health insurance, this Part provides that people may reduce the premiums payable for their complying health insurance policies by participating in the premiums reduction scheme in Division 23. Note: The premiums reduction scheme is complemented by the private health insurance offset provided for by Subdivision 61‑G of the Income Tax Assessment Act 1997. 20‑5 Private Health Insurance (Incentives) Rules Matters relating to the *premiums reduction scheme are also dealt with in the Private Health Insurance (Incentives) Rules. The provisions of this Part indicate when a particular matter is or might be dealt with in these Rules. Note: The Private Health Insurance (Incentives) Rules are made by the Minister under section 333‑20. Division 22—PHIIB, PHII benefit and related concepts Subdivision 22‑A—PHIIB, PHII benefit and related concepts 22‑1 Application of Subdivision This Subdivision applies if a premium, or an amount in respect of a premium, was paid, or is payable, during a financial year under a *complying health insurance policy in respect of a period (the premium period). 22‑5 Meaning of PHIIB Adults insured under policy (1) Each *adult insured under the *complying health insurance policy throughout the premium period is a PHIIB, in respect of the premium or amount. Note: PHIIB is short for private health insurance incentive beneficiary. Dependent person‑only policies (2) Subsections (3) and (4) apply if the only persons insured under the *complying health insurance policy throughout the premium period are one or more *dependent persons. (3) Each person who is a parent (within the meaning of Part 2.11 of the Social Security Act 1991) in relation to one or more of those *dependent persons on the last day of the financial year mentioned in section 22‑1 is a PHIIB, in respect of the premium or amount. (4) However, the person who pays the premium or amount is the only PHIIB, in respect of the premium or amount, if: (a) disregarding this subsection, more than one person would be a *PHIIB in respect of the premium or amount because of subsection (3); and (b) those persons are not married to each other (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999) at the end of the financial year; and (c) the person who pays the premium or amount is not a *dependent person. 22‑10 Meaning of PHII benefit The amount of the PHII benefit, in respect of the premium or amount, is: (a) if there is only one *PHIIB in respect of the premium or amount—the PHIIB's *share of the PHII benefit in respect of the premium or amount; or (b) if there is more than one PHIIB in respect of the premium or amount—the sum of each of those PHIIB's share of the PHII benefit in respect of the premium or amount. Note: PHII benefit is short for private health insurance incentive benefit. 22‑15 Meaning of share of the PHII benefit—single PHIIB (1) If there is only one *PHIIB in respect of the premium or amount, the amount of the *PHIIB's share of the PHII benefit, in respect of the premium or amount, is the sum of: (a) 30% of the amount of the premium, or of the amount in respect of a premium, paid or payable in respect of days in the premium period on which no person insured under the policy was aged 65 years or over; and (b) 35% of the amount of the premium, or of the amount in respect of a premium, paid or payable in respect of days in the premium period on which: (i) at least one person insured under the policy was aged 65 years or over; and (ii) no person insured under the policy was aged 70 years or over; and (c) 40% of the amount of the premium, or of the amount in respect of a premium, paid or payable in respect of days in the premium period on which at least one person insured under the policy was aged 70 years or over. Private health insurance tiers (2) Reduce the amount of each percentage specified in subsection (1) (as affected by subsection (5A)) by 10 percentage points if the *PHIIB is a *tier 1 earner for the financial year mentioned in section 22‑1. (3) Reduce the amount of each percentage specified in subsection (1) (as affected by subsection (5A)) by 20 percentage points if the *PHIIB is a *tier 2 earner for the financial year mentioned in section 22‑1. (4) Reduce the amount of each percentage specified in subsection (1) (as affected by subsection (5A)) to nil if the *PHIIB is a *tier 3 earner for the financial year mentioned in section 22‑1. (5) For the purposes of applying subsections (2), (3) and (4) in relation to the premium or amount, treat the table in subsection 22‑30(1) as applying to the *PHIIB for the financial year if he or she is a PHIIB in respect of the premium or amount because of subsection 22‑5(3) or (4). Note 1: The table in subsection 22‑30(1) sets out the private health insurance tiers for families. Note 2: Subsections 22‑5(3) and (4) apply if the only persons insured under the policy are dependent persons. Annual adjustment of percentages (5A) For each adjustment year, each percentage specified in subsection (1), (2) or (3) is replaced by the percentage worked out as follows: (a) for the adjustment year starting on 1 April 2014—multiply the specified percentage by the adjustment factor for the adjustment year; (b) for a later adjustment year—multiply the specified percentage, as worked out under this subsection for the preceding adjustment year, by the adjustment factor for the later adjustment year. (5B) Percentages are to be worked out under subsection (5A) to 3 decimal places (rounding up if the fourth decimal place is 5 or more). (5C) The percentages worked out under subsection (5A) for an adjustment year apply in relation to premiums, or amounts in respect of premiums, that were paid, or that are payable, at any time in the adjustment year. (5D) Each of the following is an adjustment year: (a) the period of 12 months starting on 1 April 2014; (b) the period of 12 months starting on each later 1 April. (5E) The adjustment factor for an adjustment year is to be determined in accordance with the Private Health Insurance (Incentives) Rules. However, if the factor so determined for an adjustment year is more than 1, the adjustment factor for that year is instead taken to be 1. Lifetime health cover loading (6) For the purposes of applying paragraphs (1)(a), (b) and (c), reduce the amount of the premium, or the amount in respect of a premium, by any part of that amount that is attributable to an increase in the premium in accordance with Division 34. 22‑20 Meaning of share of the PHII benefit—multiple PHIIBs If there is more than one *PHIIB in respect of the premium or amount, work out in accordance with section 22‑15 the amount of each of those PHIIB's share of the PHII benefit, in respect of the premium or amount, on the following assumptions: (a) assume that the PHIIB is the only person who is a PHIIB in respect of the premium or amount; (b) assume that the premium or amount is the amount of the premium (or the amount in respect of the premium) divided by the number of persons who are PHIIBs in respect of the premium or amount. 22‑25 Application of subsection 22‑15(1) after a person 65 years or over ceases to be covered by policy (1) If: (a) the *PHIIB mentioned in subsection 22‑15(1) was insured under a *complying health insurance policy (the original policy) (whether or not the policy mentioned in section 22‑1) at a time before the start of the premium period mentioned in that section; and (b) the PHIIB was not a *dependent person at that time; and (c) at that time, another person (the entitling person) was: (i) insured under the original policy; and (ii) aged 65 years or over; and (d) the entitling person subsequently ceased to be insured under the original policy; subsection 22‑15(1) applies in relation to the complying health insurance policy mentioned in section 22‑1 as if: (e) the entitling person were also insured under that policy; and (f) the entitling person were the same age as the age at which he or she ceased to be insured under the original policy. (2) Subsection (1) ceases to apply if a person (other than a *dependent person) who was not insured under the original policy at the time the entitling person ceased to be insured under it becomes insured under the *complying health insurance policy mentioned in section 22‑1. (3) Subsection (1) does not apply if its application would result in the *PHIIB's *share of the PHII benefit being less than it would otherwise have been. Subdivision 22‑B—Private health insurance tiers 22‑30 Private health insurance tiers Families (1) The following table applies to a person (the first person) for a financial year if: (a) on the last day of the financial year, the person is married (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999); or (b) on any day in the financial year, the person contributes in a substantial way to the maintenance of a *dependent person who is: (i) the person's child (within the meaning of the Income Tax Assessment Act 1997); or (ii) the person's sibling (including the person's half‑brother, half‑sister, adoptive brother, adoptive sister, step‑brother, step‑sister, foster‑brother or foster‑sister) who is dependent on the person for economic support: Private health insurance tiers—families Item Column 1 Column 2 Column 3 For the financial year, the person is a ... if his or her income for surcharge purposes for the financial year exceeds the following for the financial year … but does not exceed the following (if applicable) for the financial year … 1 tier 1 earner his or her *family tier 1 threshold his or her *family tier 2 threshold. 2 tier 2 earner his or her *family tier 2 threshold his or her *family tier 3 threshold. 3 tier 3 earner his or her *family tier 3 threshold not applicable. (2) For the purposes of subsection (1), if paragraph (1)(a) applies, treat the *income for surcharge purposes for the financial year of the person to whom the first person is married (as mentioned in that paragraph) as included in the first person's income for surcharge purposes for the financial year. (3) Subdivision 960‑J of the Income Tax Assessment Act 1997 (Family relationships) applies to subparagraphs (1)(b)(i) and (ii) of this section in the same way as it applies to that Act. Singles (4) The following table applies to a person for a financial year if the table in subsection (1) does not apply to the person for the financial year: Private health insurance tiers—singles Item Column 1 Column 2 Column 3 For the financial year, the person is a ... if his or her income for surcharge purposes for the financial year exceeds the following for the financial year … but does not exceed the following (if applicable) for the financial year … 1 tier 1 earner his or her *singles tier 1 threshold his or her *singles tier 2 threshold. 2 tier 2 earner his or her *singles tier 2 threshold his or her *singles tier 3 threshold. 3 tier 3 earner his or her *singles tier 3 threshold not applicable. 22‑35 Private health insurance singles thresholds (1) A person's singles tier 1 threshold for the 2021‑22 and 2022‑23 financial year is $90,000. This amount is indexed for later financial years under section 22‑45. (2) A person's singles tier 2 threshold for the 2021‑22 and 2022‑23 financial year is $105,000. This amount is indexed for later financial years under section 22‑45. (3) A person's singles tier 3 threshold for the 2021‑22 and 2022‑23 financial year is $140,000. This amount is indexed for later financial years under section 22‑45. Note: A person may be a tier 1 earner, tier 2 earner or tier 3 earner if the person's income for surcharge purposes exceeds the applicable threshold for that tier: see section 22‑30. 22‑40 Private health insurance family thresholds (1) A person's family tier 1 threshold for a financial year is an amount equal to double his or her *singles tier 1 threshold for the financial year. (2) A person's family tier 2 threshold for a financial year is an amount equal to double his or her *singles tier 2 threshold for the financial year. (3) A person's family tier 3 threshold for a financial year is an amount equal to double his or her *singles tier 3 threshold for the financial year. (4) However, if the person has 2 or more dependants (within the meaning of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999) who are children, increase his or her family tier 1 threshold, family tier 2 threshold and family tier 3 threshold for the financial year by the result of the following formula: Example: If the person has 3 such dependants who are children, the person's family tier 2 threshold for the 2021‑22 and 2022‑23 financial year is: Note: A person may be a tier 1 earner, tier 2 earner or tier 3 earner if his or her income for surcharge purposes exceeds the applicable threshold for that tier: see section 22‑30. 22‑45 Indexation (1) An amount mentioned in section 22‑35 is indexed for the 2023‑24 financial year, and later financial years, in accordance with this section. Indexing amounts (2) Index the amount by: (a) firstly, multiplying the amount by the *indexation factor for the financial year under subsection (4); and (b) next, rounding the result in paragraph (a) down to the nearest multiple of $1,000. Example 1: If the amount to be indexed is $105,000 and the indexation factor increases this to an indexed amount of $107,500, the indexed amount is rounded back down to $107,000. Example 2: If the amount to be indexed is $140,000 and the indexation factor increases this to an indexed amount of $142,500, the indexed amount is rounded down to $142,000. (3) However, do not index the amount for a financial year if the amount worked out under subsection (2) for the financial year is less than the amount applicable under section 22‑35 or this section for the previous financial year. (3A) If the amount is not indexed for a financial year because of subsection (3), the amount for the financial year is the same as the amount for the previous financial year. (4) For the purposes of this section, the indexation factor for a financial year is: (6) Work out the *indexation factor to 3 decimal places (rounding up if the fourth decimal place is 5 or more). Index number (7) For calculating the amounts, the index number for a *quarter is the estimate of full‑time adult average weekly ordinary time earnings for the middle month of the quarter first published by the Australian Statistician in respect of that month. Division 23—Premiums reduction scheme Subdivision 23‑A—Amount of reduction 23‑1 Reduction in premiums (1) The amount of premiums payable under a *complying health insurance policy in respect of a period is reduced in accordance with this section if a person is a *participant in the *premiums reduction scheme in respect of the policy. (2) The amount of the reduction for each premium is the *PHII benefit in respect of the premium. Subdivision 23‑B—Participation in the premiums reduction scheme 23‑15 Registration as a participant in the premiums reduction scheme (1) A person may apply to a private health insurer, in the *approved form, to become a *participant in the *premiums reduction scheme in respect of a *complying health insurance policy issued by the insurer if: (a) the insurer is a *participating insurer; and (b) the person is a *PHIIB in respect of a premium paid or payable under the policy; and (c) the person meets any requirements specified in the Private Health Insurance (Incentives) Rules for the purposes of this paragraph. (2) A private health insurer that receives an application under subsection (1) must notify the Chief Executive Medicare of the application, in the *approved form, no more than 14 days (or any other period determined by the Chief Executive Medicare) after receiving the application. (3) If notified of an application and satisfied that paragraphs (1)(a), (b) and (c) apply, the Chief Executive Medicare must register the applicant as a *participant in respect of the policy. (4) The Chief Executive Medicare must notify the private health insurer that issued the policy if the Chief Executive Medicare registers a person as a *participant in the *premiums reduction scheme in respect of the policy. 23‑20 Refusal to register (1) If the Chief Executive Medicare refuses to register the applicant in respect of a policy, the Chief Executive Medicare must give the applicant, and the private health insurer that issued the policy, notice of the refusal together with reasons for the refusal. Note: Refusals to register are reviewable under Part 6‑9. (2) The applicant is taken to be registered as a *participant in respect of the policy if the Chief Executive Medicare does not give notice of refusal within 14 days after receiving the notice under subsection 23‑15(2) from the private health insurer to which the applicant applied for registration. 23‑30 Participants who want to withdraw from scheme (1) A *participant must notify the private health insurer that issued the policy in respect of which a person is a participant if the person no longer wishes to be registered in respect of the policy. (2) A private health insurer must notify the Chief Executive Medicare of each notice the insurer receives under subsection (1), in the *approved form and no more than 14 days (or any other period determined by the Chief Executive Medicare) after receiving the notice. (3) If notified under subsection (2), the Chief Executive Medicare must revoke the person's registration in respect of the policy. 23‑35 Revocation of registration (1) The Chief Executive Medicare must revoke a person's registration in respect of a *complying health insurance policy if the Chief Executive Medicare is satisfied that the person is not eligible to participate in the *premiums reduction scheme in respect of the policy. Note: Revocations of registration are reviewable under section Part 6‑9. (2) Revocation of registration under subsection (1) does not affect a person's right to make another application for registration under section 23‑15. (3) The Chief Executive Medicare must give notice of the revocation of a person's registration in respect of a *complying health insurance policy to the person, and to the private health insurer that issued the policy, within 28 days after the day on which the revocation occurs. 23‑40 Variation of registration (1) A private health insurer must notify the Chief Executive Medicare if the treatments *covered by a *complying health insurance policy, issued by the private health insurer and in respect of which a person is a *participant, are varied. (2) On receiving such a notice, the Chief Executive Medicare must vary the details of the registration accordingly and give notice of the variation to the private health insurer. 23‑45 Retention of applications by private health insurers (1) A private health insurer must retain an application made to it under subsection 23‑15(1) for the period of 5 years beginning on the day on which the application was made. (2) The private health insurer may retain the application in any form approved in writing by the Chief Executive Medicare. (3) An application retained in such a form must be received in all courts or tribunals as evidence as if it were the original. Part 2‑3—Lifetime health cover Division 31—Introduction 31‑1 What this Part is about People are encouraged to take out hospital cover by the time they turn 30. A person who is older than 30 when he or she takes out hospital cover for the first time, or who drops hospital cover for a period after having turned 30, may have to pay higher premiums for hospital cover. This scheme is known as lifetime health cover. 31‑5 Private Health Insurance (Lifetime Health Cover) Rules Matters relating to lifetime health cover are also dealt with in the Private Health Insurance (Lifetime Health Cover) Rules. The provisions of this Part indicate when a particular matter is or might be dealt with in these Rules. Note: The Private Health Insurance (Lifetime Health Cover) Rules are made by the Minister under section 333‑20. Division 34—General rules about lifetime health cover 34‑1 Increased premiums for person who is late in taking out hospital cover (1) A private health insurer must increase the amount of premiums payable for *hospital cover in respect of an *adult if the adult did not have hospital cover on his or her *lifetime health cover base day. (2) The amount of the increase is worked out as follows: where: base rate, for *hospital cover, is the amount of premiums that would be payable for the cover if: (a) the premiums were not increased under this Part; and (b) there was no discount of the kind allowed under subsection 66‑5(2). lifetime health cover age, in relation to an *adult who takes out *hospital cover after his or her *lifetime health cover base day, means the adult's age on the 1 July before the day on which the adult took out the hospital cover. 34‑5 Increased premiums for person who ceases to have hospital cover after his or her lifetime health cover base day (1) A private health insurer must increase the amount of premiums payable for *hospital cover in respect of an *adult if, after the adult's *lifetime health cover base day, the adult ceases to have hospital cover. (2) The amount of the increase is worked out as follows: where: base rate is the *base rate for the *hospital cover. years without hospital cover is the number obtained by: (a) dividing by 365 the number of days (other than *permitted days without hospital cover), after the first day on which subsection (1) applied to the *adult, on which he or she did not have *hospital cover; and (b) rounding up the result to the nearest whole number. (3) Any increase under this section in the amount of premiums payable for *hospital cover is in addition to any increase under section 34‑1 in the amount of premiums payable for that hospital cover. 34‑10 Increased premiums stop after 10 years' continuous cover (1) A private health insurer must stop increasing the amount of premiums payable for *hospital cover in respect of an *adult under this Part if the adult has had hospital cover (including under an *applicable benefits arrangement), the premiums for which have been increased under this Part or *old Schedule 2: (a) for a continuous period of 10 years; or (b) for a period of 10 years that has been interrupted only by *permitted days without hospital cover or periods during which the adult was taken to have had hospital cover otherwise than because of paragraph 34‑15(2)(a) (none of which count towards the 10 years). (2) The amount must stop being increased on the day after the last day of the 10 year period. (3) The amount of premiums payable for *hospital cover in respect of the *adult must start to be increased under this Part again if: (a) after the end of the 10 year period, the adult ceases to have hospital cover; and (b) the adult later takes out hospital cover again; and (c) the days in the period between ceasing to have the cover and taking it out again are not all *permitted days without hospital cover in respect of the adult. (4) Subsection (3) does not prevent this section applying again in respect of any later 10 year period. (5) In subsection (1): old Schedule 2 means Schedule 2 to the National Health Act 1953 as in force before 1 April 2007. 34‑15 Meaning of hospital cover (1) Hospital cover is so much of a *complying health insurance policy as *covers *hospital treatment. An *adult has hospital cover if he or she is insured under a complying health insurance policy that covers hospital treatment. (2) An *adult is taken to have *hospital cover: (a) at any time during which the adult was covered by an *applicable benefits arrangement; or (b) at any time during which the adult holds a *gold card; or (c) at any time during which the adult is in a class of adults specified in the Private Health Insurance (Lifetime Health Cover) Rules for the purposes of this paragraph. (3) In this section: gold card means a card that evidences a person's entitlement to be provided with treatment: (a) in accordance with the Treatment Principles prepared under section 90 of the Veterans' Entitlements Act 1986; or (b) in accordance with a determination made under section 286 of the Military Rehabilitation and Compensation Act 2004 in respect of the provision of treatment. 34‑20 Meaning of permitted days without hospital cover (1) Any of the following days that occur after an *adult ceases, for the first time after his or her *lifetime health cover base day, to have *hospital cover are permitted days without hospital cover in respect of that adult: (a) days on which the cover was suspended by the private health insurer in accordance with the rules for suspensions set out in the Private Health Insurance (Lifetime Health Cover) Rules; (b) days (not counting days covered by paragraph (a)) on which the adult is *overseas that form part of a continuous period overseas of more than one year; (c) the first 1,094 days (not counting days covered by paragraph (a) or (b)) on which the adult did not have hospital cover. (2) The Private Health Insurance (Lifetime Health Cover) Rules may specify days that, despite subsection (1), are taken not to be *permitted days without hospital cover. 34‑25 Meaning of lifetime health cover base day General rule: 1 July after person turns 31 (1) Subject to subsections (2), (3), (4) and (4A), a person's lifetime health cover base day is the 1 July after the person turns 31. Note: See also section 37‑5. Person who had lifetime health cover base day on or before 30 June 2010 (2) If a person had a lifetime health cover base day on or before 30 June 2010, that lifetime health cover base day remains the person's lifetime health cover base day. Person who is not an Australian citizen and is not covered by subsection (2) (3) Subject to subsection (4), the lifetime health cover base day of a person who is not an Australian citizen on the person's *medicare eligibility day and is not covered by subsection (2) is the later of: (a) the 1 July after the person turns 31; and (b) the first anniversary of the person's medicare eligibility day. Note: See also section 37‑5. Person overseas on day worked out under subsection (1) or (3) (4) However, if the person is *overseas on the day worked out under subsection (1) or (3), the person's lifetime health cover base day is the first anniversary of: (a) the person's first return to Australia from overseas; or (b) the person's first entry to Australia; after the day worked out under subsection (1) or (3), whichever is applicable. Person living on Norfolk Island at the final transition time (4A) If: (a) a person was living on Norfolk Island at the final transition time (within the meaning of the Norfolk Island Act 1979); and (b) the person had turned 31 before that time; the person's lifetime health cover base day is the first day after the end of the 12‑month period that began at that time. (4B) If: (a) a person is living on Norfolk Island at the final transition time (within the meaning of the Norfolk Island Act 1979); and (b) the person turns 31 at or after that time; the person's lifetime health cover base day is whichever is the later of the following: (c) the 1 July after the person turns 31; (d) the first day after the 12‑month period that began at that time. Medicare eligibility day (5) A person's medicare eligibility day is the day on which the person is registered by the Chief Executive Medicare as an eligible person within the meaning of section 3 of the Health Insurance Act 1973. 34‑30 When a person is overseas or enters Australia (1) Without limiting when a person is taken to be *overseas for the purposes of this Part: (a) a person who lived on Norfolk Island before the final transition time (within the meaning of the Norfolk Island Act 1979) is taken, while the person was living on Norfolk Island before that time, to have been overseas; and (b) any period in which a person returns to Australia for less than 90 days counts as part of a continuous period overseas. (2) For the purposes of this Part, a person is taken not to have returned to Australia from *overseas, or entered Australia, if the person returns to Australia, or enters Australia, but remains in Australia for a period of less than 90 days. Division 37—Exceptions to the general rules about lifetime health cover 37‑1 People born on or before 1 July 1934 (1) The amount of premiums payable for *hospital cover in respect of an *adult does not increase under this Part if the adult was born on or before 1 July 1934. (2) However, this section does not prevent section 37‑20 applying to the *hospital cover in respect of any *adults who were born after 1 July 1934. 37‑5 People over 31 and overseas on 1 July 2000 A person: (a) who turned 31 on or before 1 July 2000; and (aa) who: (i) was an Australian citizen on 1 July 2000; or (ii) was an Australian resident (within the meaning of section 3 of the Health Insurance Act 1973) on 1 July 2000; or (iii) had a lifetime health cover base day on or before 30 June 2010; and (b) who was *overseas on 1 July 2000; is taken, for the purposes of section 34‑1, to have had *hospital cover on the person's *lifetime health cover base day. 37‑7 Person yet to turn 31 If the 1 July after a person turns 31 has not arrived, lifetime health cover does not yet apply to the person. 37‑10 Hardship cases A person is treated for the purposes of this Part as if he or she had *hospital cover on 1 July 2000 if a determination under clause 10 of Schedule 2 to the National Health Act 1953 (as in force immediately before 1 April 2007) had effect in relation to the person immediately before 1 April 2007. 37‑15 Increases cannot exceed 70% of base rates The maximum amount of any increase under this Part in the amount of premiums payable for *hospital cover in respect of an *adult is an amount equal to 70% of the *base rate for the hospital cover. 37‑20 Joint hospital cover (1) If: (a) more than one *adult is covered under the same *hospital cover; and (b) the amount of premiums payable for the cover in respect of at least one of those adults is increased under this Part; the amount of the premiums payable for the cover in respect of all of the adults is increased. (2) The amount of the increase in the premiums payable for the cover is worked out by: (a) dividing the *base rate for the cover by the number of *adults it covers; and (b) using that rate to work out for each adult what the amount of the increase for that adult (if any) would be; and (c) adding together the results of paragraph (b). Division 40—Administrative matters relating to lifetime health cover 40‑1 Notification to insured people etc. (1) A private health insurer must comply with any requirements specified in the Private Health Insurance (Lifetime Health Cover) Rules relating to providing information to: (a) *adults in respect of *hospital cover with the private health insurer; and (b) other adults who apply for, or inquire about, that hospital cover; about increases under this Part in the amounts of premiums payable for hospital cover in respect of those adults. (2) A private health insurer must comply with any requirements specified in the Private Health Insurance (Lifetime Health Cover) Rules relating to providing information to other private health insurers about increases under this Part in the amounts of premiums payable for *hospital cover with the private health insurer. (3) The Private Health Insurance (Lifetime Health Cover) Rules may require or permit a private health insurer to provide information of a kind referred to in this section in the form of an age notionally attributed, to an *adult or other person, as the age from which the adult or other person will be treated as having had continuous *hospital cover. (4) A private health insurer must keep separate records in relation to each *adult who has *hospital cover. (5) When an *adult ceases to be *covered by *hospital cover under which more than one adult was covered, the private health insurer must notify each other adult that the adult has ceased to be covered by the cover. 40‑5 Evidence of having had hospital cover, or of a person's age A private health insurer must comply with any requirements specified in the Private Health Insurance (Lifetime Health Cover) Rules relating to whether, and in what circumstances, particular kinds of evidence are to be accepted, for the purposes of this Part, as conclusive evidence of: (a) whether a person had *hospital cover at a particular time, or during a particular period; or (b) a person's age. Part 2‑4—Excess levels for medicare levy and medicare levy surcharge purposes Division 42—Introduction 42‑1 What this Part is about This Part sets out the excess levels for complying health insurance products that relate to whether a person is liable to pay medicare levy or medicare levy surcharge. Division 45—Excess levels for medicare levy and medicare levy surcharge purposes 45‑1 Excess level amounts For the purposes of the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 and the Medicare Levy Act 1986, any excess payable in respect of benefits under a *complying health insurance policy that provides *hospital cover must not be more than: (a) $750 in any 12 month period, in relation to a policy under which only one person is insured; and (b) $1,500 in any 12 month period, in relation to any other policy. Chapter 3—Complying health insurance products Part 3‑1—Introduction Division 50—Introduction 50‑1 What this Chapter is about Broadly, health insurance that is made available to the public must meet the requirements in this Chapter. This means that: (a) the insurance must be community‑rated (that is, made available in a way that does not discriminate between people) (see Part 3‑2); and (b) the insurance must be in the form of a complying health insurance product (see Part 3‑3); and (c) the private health insurers who make the products available must meet certain obligations to people insured or seeking to be insured under the products (see Part 3‑4). 50‑5 Private Health Insurance Rules relevant to this Chapter Matters relating to *complying health insurance products are also dealt with in the Private Health Insurance (Complying Product) Rules, the Private Health Insurance (Benefit Requirements) Rules, the Private Health Insurance (Medical Devices and Human Tissue Products) Rules and the Private Health Insurance (Accreditation) Rules. The provisions of this Chapter indicate when a particular matter is or may be dealt with in these Rules. Note: These Rules are all made by the Minister under section 333‑20. Part 3‑2—Community rating Division 55—Principle of community rating 55‑1 What this Part is about To ensure that everybody who chooses has access to health insurance, the principle of community rating prevents private health insurers from discriminating between people on the basis of their health or for any other reason described in this Part. 55‑5 Principle of community rating (1) A private health insurer must not: (a) take or fail to take any action; or (b) in making a decision, have regard or fail to have regard to any matter; that would result in the insurer *improperly discriminating between people who are or wish to be insured under a *complying health insurance policy of the insurer. (2) Improper discrimination is discrimination that relates to: (a) the suffering by a person from a chronic disease, illness or other medical condition or from a disease, illness or medical condition of a particular kind; or (b) the gender, race, sexual orientation or religious belief of a person; or (c) the age of a person, except to the extent allowed under: (i) Part 2‑3 (lifetime health cover); or (ii) subsection 63‑5(4); or (iii) section 66‑5, because of the reason mentioned in paragraph 66‑5(3)(ea); or (d) where a person lives, except to the extent allowed under subsection 66‑10(2) or section 66‑20 or 66‑25; or (e) any other characteristic of a person (including but not just matters such as occupation or leisure pursuits) that is likely to result in an increased need for *hospital treatment or *general treatment; or (f) the frequency with which a person needs hospital treatment or general treatment; or (g) the amount or extent of the benefits to which a person becomes entitled during a period under a *complying health insurance policy, except to the extent allowed under section 66‑15; or (h) any matter set out in the Private Health Insurance (Complying Product) Rules for the purposes of this paragraph. (3) Despite subsection (2), discrimination by a *restricted access insurer is not improper discrimination to the extent to which the insurer: (a) takes or fails to take an action; or (b) in making a decision, has regard or fails to have regard to a matter; only to ensure that its *complying health insurance products are not made available to persons to whom its constitution or *rules prohibits it from making the products available. (4) Despite subsection (2), discrimination by a private health insurer is not improper discrimination to the extent to which: (a) the insurer: (i) takes or fails to take an action; or (ii) in making a decision, has regard or fails to have regard to a matter; and (b) taking or failing to take the action, or having regard or failing to have regard to that matter, has the effect of the premiums payable under an insurance policy that covers a person who is: (i) employed by a particular person or body; or (ii) under contract to provide services to a particular person or body; being the subject of a discount or discounts (whether or not the policy also covers one or more persons who are not so employed and are not under such a contract); and (c) the premiums meet the premium requirement in section 66‑5. (5) To avoid doubt, subsection (4) does not apply if taking or failing to take the action, or having regard or failing to have regard to that matter, has the effect of an insurance policy being cancelled because a person ceases to be an employee of, or ceases to be under contract to provide services to, a particular employer. 55‑10 Closed products, and terminated products and product subgroups The principle of community rating in section 55‑5 does not: (a) prevent a private health insurer from closing a *complying health insurance product, such that the *product will not be available to anyone except those persons, who at the time of closing, are insured under a policy forming part of the product; or (b) prevent a private health insurer from terminating a complying health insurance product or a *product subgroup of a complying health insurance product, such that: (i) in the case of a product—the product will not be available to any person insured under a policy forming part of the product; and (ii) in the case of a product subgroup—the product subgroup will not be available to any person insured under a policy that belongs to the product subgroup. 55‑15 Pilot projects (1) The principle of community rating in section 55‑5 does not prevent a private health insurer from: (a) taking or failing to take any action; or (b) in making a decision, having regard or failing to have regard to any matter; for the purposes of conducting a pilot project in accordance with the Private Health Insurance (Complying Product) Rules. (2) The Private Health Insurance (Complying Product) Rules may permit pilot projects of a kind specified in the Rules to be conducted by private health insurers in accordance with requirements specified in the Rules. Part 3‑3—Requirements for complying health insurance products Division 60—Introduction 60‑1 What this Part is about Complying health insurance products (which are made up of complying health insurance policies) are the only kind of insurance that private health insurers are allowed to make available as part of their health insurance business (see section 63‑1 and Division 84). This Part sets out the requirements that an insurance policy must meet in order to be a complying health