{"id":"C2004A01158","name":"Private Health Insurance (Risk Equalisation Levy) Act 2003","slug":"private-health-insurance-risk-equalisation-levy-act-2003","collection":"act","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":"73 of 2003","makingDate":null,"administeringDepartment":null,"currentVersion":{"id":32781,"registerId":"commonwealth-C2004A01158-current","compilationNumber":null,"startDate":"2026-04-01","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Short title","content":"#### 1 Short title\n\n This Act may be cited as the Private Health Insurance (Risk Equalisation Levy) Act 2003.","sortOrder":0},{"sectionNumber":"2","sectionType":"section","heading":"Commencement","content":"#### 2 Commencement\n\n This Act commences on 1 July 2004.","sortOrder":1},{"sectionNumber":"3","sectionType":"section","heading":"Crown to be bound","content":"#### 3 Crown to be bound\n\n This Act binds the Crown in each of its capacities.","sortOrder":2},{"sectionNumber":"4","sectionType":"section","heading":"Extension of Act to external Territories","content":"#### 4 Extension of Act to external Territories\n\n This Act extends to Norfolk Island, to the Territory of Cocos (Keeling) Islands and to the Territory of Christmas Island.","sortOrder":3},{"sectionNumber":"5","sectionType":"section","heading":"Definitions","content":"#### 5 Definitions\n\n In this Act, unless the contrary intention appears:\n\n> APRA means the Australian Prudential Regulation Authority.\n\n> private health insurer has the same meaning as in the Private Health Insurance Act 2007.\n\n> risk equalisation levy means a risk equalisation levy imposed under section 6.\n\n> risk equalisation levy day means a risk equalisation levy day specified in Private Health Insurance (Risk Equalisation Levy) Rules made for the purposes of section 6.\n\n> supplementary risk equalisation levy day means a supplementary risk equalisation levy day specified in a determination by the Minister under section 6.","sortOrder":4},{"sectionNumber":"6","sectionType":"section","heading":"Imposition of risk equalisation levy","content":"#### 6 Imposition of risk equalisation levy\n\n (1) Risk equalisation levy is imposed on each private health insurer:\n (a) on each day specified in the Private Health Insurance (Risk Equalisation Levy) Rules as a risk equalisation levy day for a financial year; and\n (b) on each day (if any) determined by the Minister, by legislative instrument, as a supplementary risk equalisation levy day for a financial year.\n (2) The Private Health Insurance (Risk Equalisation Levy) Rules must not specify more than 4 levy days for a financial year.\n (3) The determination by the Minister must not specify more than 2 supplementary levy days for a financial year.","sortOrder":5},{"sectionNumber":"7","sectionType":"section","heading":"Rate of risk equalisation levy","content":"#### 7 Rate of risk equalisation levy\n\n (1) The rate of risk equalisation levy imposed on a particular day is worked out using the following table:\n\n```html\n

Rate of risk equalisation levy

Item

The rate of levy imposed on a …

is the rate that …

1

risk equalisation levy day

(a) is determined in writing by APRA; and

(b) applies on that day.

2

supplementary risk equalisation levy day

(a) is determined in writing by the Minister; and

(b) applies on that day.

\n```\n\n (2) In determining the rate of levy, APRA and the Minister must comply with the Private Health Insurance (Risk Equalisation Policy) Rules made under the Private Health Insurance Act 2007.\n (3) The rate of levy may be set at zero.\n (4) An instrument made under paragraph (a) of item 1 or 2 of the table in subsection (1) is not a legislative instrument.","sortOrder":6},{"sectionNumber":"8","sectionType":"section","heading":"Minister to obtain advice from APRA","content":"#### 8 Minister to obtain advice from APRA\n\n Before making a determination under section 6 or item 2 of the table in subsection 7(1), the Minister must obtain, and take into account, advice from APRA in relation to the following matters:\n (a) whether to make a determination under section 6;\n (b) the day that is to be, or the days that are to be, specified as the supplementary risk equalisation levy day or days for a financial year;\n (c) the rate that is to be specified as the rate of risk equalisation levy imposed on the supplementary risk equalisation levy day or days.","sortOrder":7},{"sectionNumber":"10A","sectionType":"section","heading":"Private Health Insurance (Risk Equalisation Levy) Rules","content":"#### 10A Private Health Insurance (Risk Equalisation Levy) Rules\n\n The Minister may, by legislative instrument, make Private Health Insurance (Risk Equalisation Levy) Rules providing for matters:\n (a) required or permitted by this Act to be provided; or\n (b) necessary or convenient to be provided in order to carry out or give effect to this Act.","sortOrder":8},{"sectionNumber":"11","sectionType":"section","heading":"Regulations","content":"#### 11 Regulations\n\n (1) The Governor‑General may make regulations prescribing matters:\n (a) required or permitted by this Act to be prescribed; or\n (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act.\n (2) Before the Governor‑General makes regulations under subsection (1), the Minister must take into consideration any relevant recommendation made to the Minister by APRA.","sortOrder":9}],"analysis":{"issue_detection":{"absurdities":[{"type":"circular_definition","section":"5 (definition of 'risk equalisation levy day') and 5 (definition of 'supplementary risk equalisation levy day')","severity":"medium","reasoning":"The definitions in section 5 define terms by reference to section 6, while section 6 uses those very terms to impose the levy. Neither the definitions nor section 6 provides a substantive meaning independent of the other. This is a classic circular definition loop: the term is defined by reference to a provision that uses the term being defined.","confidence":0.72,"description":"Circular definitions: 'risk equalisation levy day' is defined as a day specified in the Rules made for the purposes of section 6, and section 6 itself uses the term 'risk equalisation levy day' without independently defining it, creating a circular dependency. Similarly, 'supplementary risk equalisation levy day' is defined by reference to a determination under section 6, while section 6 uses the term it is supposed to define."},{"type":"self_contradicting","section":"7(4)","severity":"medium","reasoning":"Section 6(1)(b) expressly requires the Minister to act 'by legislative instrument' when specifying supplementary risk equalisation levy days. However, section 7(4) declares that the Minister's rate-setting instrument under item 2 of the table is not a legislative instrument. This splits a single coherent ministerial decision (specifying a supplementary levy day AND its rate) into two instruments of different legal character, creating potential confusion about parliamentary oversight, disallowance rights, and registration obligations under the Legislation Act 2003.","confidence":0.8,"description":"Section 7(4) declares that instruments made under item 1 or 2 of the table in subsection 7(1) are not legislative instruments, yet item 2 of that same table assigns rate-setting power to the Minister — who is also required under section 6(1)(b) to make supplementary levy day determinations by legislative instrument. This creates an internal inconsistency about the legal character of ministerial instruments under this Act."},{"type":"other","section":"1 and 2","severity":"low","reasoning":"While naming Acts by their year of passage is standard Australian drafting practice, the combination of a 2003 title with a 2004 commencement date means all operative provisions were legally inert for a period after the Act's nominal existence. More practically, section 5 defines 'private health insurer' by reference to the Private Health Insurance Act 2007, which did not exist when this Act commenced in 2004. This makes the definition of a core term of the levy unworkable from commencement until 2007.","confidence":0.88,"description":"The Act is titled the 'Private Health Insurance (Risk Equalisation Levy) Act 2003' but does not commence until 1 July 2004. The year in the title (2003) refers to the year of enactment but creates an inherent temporal absurdity where the operative law predates its own commencement by at least six months."},{"type":"retroactive_impossibility","section":"5 (definition of 'private health insurer') cross-referenced with section 6(1)","severity":"high","reasoning":"Section 6(1) imposes the levy on 'each private health insurer'. The definition of that term in section 5 refers exclusively to the Private Health Insurance Act 2007. From commencement in 2004 to the enactment of the 2007 Act, there was no valid definition of the levy subject, making it logically impossible to identify who was liable. This is either a drafting artifact of subsequent amendment or a genuine impossibility of compliance during the 2004–2007 period.","confidence":0.85,"description":"The definition of 'private health insurer' in section 5 — the entity on which the levy is imposed under section 6 — is defined by reference to the Private Health Insurance Act 2007, a statute that did not exist when this Act commenced on 1 July 2004. This rendered the levy unimposable on any defined entity from 2004 until 2007."},{"type":"other","section":"8","severity":"low","reasoning":"Section 8 lists matters (a), (b), and (c) on which the Minister must obtain APRA advice. Matters (b) and (c) are already implied by the section 6 limb of the consultation trigger. The addition of 'item 2 of the table in subsection 7(1)' as a separate trigger appears to create a second, overlapping obligation rather than a distinct one, since the rate and the day are part of the same ministerial decision-making process.","confidence":0.62,"description":"Section 8 requires the Minister to obtain and take into account APRA's advice before making a determination under section 6 or 'item 2 of the table in subsection 7(1)'. However, item 2 of that table concerns only the rate of levy on supplementary days — not the existence or timing of those days. This means the Minister must consult APRA twice for supplementary levy days (once under the section 6 limb and once under the section 7 limb of section 8), creating a redundant and potentially inconsistent double-consultation obligation."}],"contradictions":[{"severity":"high","section_a":"6(1)(b)","section_b":"7(4)","confidence":0.82,"description":"Section 6(1)(b) mandates that the Minister specify supplementary risk equalisation levy days 'by legislative instrument', while section 7(4) declares that instruments made under item 2 of the table in subsection 7(1) — the Minister's rate-setting instrument — are not legislative instruments. Since the day and rate determinations are legally intertwined aspects of the same ministerial action, the Act simultaneously requires and denies legislative instrument status to ministerial instruments in this regime."},{"severity":"medium","section_a":"6(2)","section_b":"6(3)","confidence":0.68,"description":"Section 6(2) limits the Rules to specifying no more than 4 levy days per financial year, and section 6(3) limits the Minister to no more than 2 supplementary levy days per financial year, giving a maximum of 6 levy days total. However, there is no provision coordinating these caps or preventing the Rules and the Minister's determination from together specifying the same calendar day twice, potentially resulting in double-imposition of levy on the same day without any mechanism to resolve the overlap."},{"severity":"medium","section_a":"7(2)","section_b":"7(1) (Item 1 — APRA rate-setting)","confidence":0.7,"description":"Section 7(2) requires APRA to comply with the Private Health Insurance (Risk Equalisation Policy) Rules when determining the rate of levy, but section 7(1) item 1 grants APRA an apparently unconstrained power to determine the rate in writing. The constraint in subsection (2) is substantive but sits separately from the grant of power, creating ambiguity about whether a rate determination by APRA that departs from those Policy Rules is void or merely in breach of a duty — a significant legal uncertainty for levy payers."},{"severity":"medium","section_a":"10A","section_b":"11(1)","confidence":0.74,"description":"Section 10A grants the Minister power to make Rules covering matters 'required or permitted by this Act to be provided' or 'necessary or convenient'. Section 11(1) grants the Governor-General power to make regulations covering matters 'required or permitted by this Act to be prescribed' or 'necessary or convenient'. The overlapping scope of these two instruments — both of which are legislative instruments — creates a potential conflict as to which instrument prevails if the Minister's Rules and the Governor-General's Regulations address the same matter inconsistently, with no tiebreaker provision in the Act."}]},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"The Act remains tightly focused on its original purpose: imposing and governing the mechanism of the risk equalisation levy on private health insurers. There is no evidence of scope creep from its original intent. The structure is narrow and technical, consistent with a levy-imposition instrument supporting a broader private health insurance regulatory framework."},"complexity_factors":["Relies heavily on external instruments and rules (Private Health Insurance (Risk Equalisation Levy) Rules, Private Health Insurance (Risk Equalisation Policy) Rules) not contained in the Act itself, requiring readers to consult multiple documents","Dual-authority rate-setting mechanism — APRA sets rates for regular levy days, the Minister sets rates for supplementary levy days — creates potential for confusion about who controls what","The Act is skeletal in nature: core operational details (rates, specific levy days) are delegated to subordinate legislation and regulatory instruments","Cross-references to the Private Health Insurance Act 2007 for key definitions and policy rules, adding a layer of dependency on another Act","Distinction between 'risk equalisation levy days' and 'supplementary risk equalisation levy days' and their different governance pathways adds conceptual layering","The note that rate-setting instruments are NOT legislative instruments (s7(4)) has subtle but significant legal implications around parliamentary oversight that could confuse non-lawyers"],"plain_english_summary":"The Act imposes a levy on private health insurers to redistribute costs from funds that insure higher‑risk, higher‑cost people to those with healthier members. It affects insurers (who pay), insured Australians (indirectly, via more stable premiums and access), APRA (which advises and sets rates), and the Minister (who can require extra levy days). The levy may be set to zero."},"kimi_summary":{"content_quality":"ok","complexity_score":3,"scope_assessment":{"changed":false,"description":"The legislation maintains its original narrow purpose: imposing a levy to fund risk equalisation in private health insurance. It has not expanded beyond this specific fiscal mechanism."},"complexity_factors":["Only 5 defined terms in the interpretation section","Simple two-tier structure: regular levy days (up to 4) vs supplementary levy days (up to 2)","Straightforward rate-setting table with only 2 rows","Minimal cross-referencing — primarily refers to the Private Health Insurance Act 2007 for definitions and policy rules","No nested exceptions or conditional logic beyond the basic day/rate distinctions","Short length — approximately 11 sections with minimal procedural detail","Clear separation of powers: APRA advises and sets regular rates; Minister determines supplementary days and rates"],"plain_english_summary":"This law sets up a system where private health insurance companies pay a special tax (called a 'levy') to help balance out the costs of covering sick people across the whole industry.\n\n**What it does:**\n- **Imposes a levy** on all private health insurers operating in Australia (including Norfolk Island, Cocos Islands and Christmas Island).\n- **Creates a risk equalisation scheme** — this means insurers who have healthier members (and lower costs) pay money into a pool, which then goes to insurers with sicker members (and higher costs). This stops insurers from avoiding sick people or charging them unaffordable premiums.\n- **Sets up payment days:** Up to 4 regular levy days per year (set by rules made by the Minister) and up to 2 extra 'supplementary' levy days (set by the Minister directly).\n- **Determines the rate:** The financial regulator APRA sets the rate for regular levy days; the Minister sets the rate for supplementary days. The rate can even be zero if needed.\n\n**Who it affects:**\n- **Private health insurers** — they must pay the levy.\n- **People with private health insurance** — indirectly, because this system keeps premiums more stable and affordable, especially for older or sicker people.\n\n**Why it matters:**\nWithout this system, insurers would compete to attract only healthy young people and avoid older, sicker customers. This would make insurance unaffordable for those who need it most. The risk equalisation levy ensures the private health insurance market remains viable and accessible for everyone."},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"The Act, as presented, establishes the risk equalisation levy framework (who pays, when, who sets rates, and rulemaking power). The text contains no provision indicating it amends or narrows a prior statutory scope; it creates a standalone levy regime with delegated rule‑making and advisory processes (ss1–11)."},"complexity_factors":["Cross‑references to other legislation and instruments (Private Health Insurance Act 2007; Private Health Insurance (Risk Equalisation Policy) Rules) creating external dependencies (s7(2); definitions)","Delegation of substantive choices to agencies: APRA determines rates for rule days and provides advice; the Minister may set supplementary days and rates (ss7(1), 8)","Multiple layers of delegated instruments: Minister’s legislative instrument rules, Ministerial determinations, APRA written instruments and Governor‑General regulations (ss6,7,10A,11)","Numeric and procedural limits on exercise of discretions (max 4 levy days in rules; max 2 supplementary days by Minister) (s6(2)–(3))","Some instrument types explicitly excluded from parliamentary disallowance (instrument under s7(1)(a) is not a legislative instrument) which affects oversight (s7(4))","Operational compliance burden on private health insurers due to payment timing, rate variability and rule compliance (s6,7,10A)","Interaction with APRA’s policy rules constrains rate setting and links to prudential policy (s7(2))"],"plain_english_summary":"This Act requires private health insurers to pay a ‘risk equalisation levy’ on specific levy days (s6). APRA determines the levy rate for rule‑specified levy days and the Minister can set supplementary levy days and rates after taking APRA’s advice (ss7–8). The rules limit how many levy days may be specified and may set the rate to zero. The measure affects insurers’ payments, timing of cash outflows and creates administrative reporting and compliance obligations under the Act’s rules (ss6,7,10A)."}},"importantCases":[],"_links":{"self":"/api/acts/private-health-insurance-risk-equalisation-levy-act-2003","history":"/api/acts/private-health-insurance-risk-equalisation-levy-act-2003/history","analysis":"/api/acts/private-health-insurance-risk-equalisation-levy-act-2003/analysis","conflicts":"/api/acts/private-health-insurance-risk-equalisation-levy-act-2003/conflicts","importantCases":"/api/acts/private-health-insurance-risk-equalisation-levy-act-2003/important-cases","documents":"/api/acts/private-health-insurance-risk-equalisation-levy-act-2003/documents"}}