Private ruling: Medicare levy surcharge
Published: May 2012
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011
Date scheme commenced: 1 July 2009

Ruling: Q1: Does your international health insurance policy qualify as a complying health insurance policy for Medicare levy surcharge (MLS) purposes? | A1: No. | Q2: Are you entitled to an exemption from the Medicare levy surcharge? | A2: No.

Relevant facts and circumstances: You had an international health insurance policy with an Insurance Company based overseas. The international health insurance plan covered all private hospital, medical, dental, optical and prescription expenses in Australian and abroad. You were an Australian resident for the years during the 2009-10 and 2010-11 financial years The medical expenses paid during the 2009-10 and 2010-11 financial years were reimbursed to you by your Insurance Company. Your Insurance Company is not listed as a registered private health insurance provider with the Private Health Insurance Administration Council (PHIAC). Your income exceeds the relevant threshold.

Relevant legislative provisions: Medicare Levy Act 1986 subsection 3(5).

Reasons for decision: Summary: The Medicare levy surcharge (MLS) is in addition to the Medicare levy. The MLS is payable if you or your dependants did not have an appropriate level of private patient hospital cover for the whole of the 2009-10 and 2010-11 income years and your taxable income was above the surcharge threshold amount. An appropriate level of private patient hospital cover is cover provided by an insurance policy issued by a registered health insurer for hospital treatment in Australia. Subsection 3(5) of the Medicare Levy Act 1986 (MLA) states that a person is covered by an insurance policy that provides private patient hospital cover if the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007 (PHIA)) that covers hospital treatment. The Private Health Insurance Administration Council (PHIAC) administers the PHIA 2007 and maintains on its website (www.phiac.gov.au ) an up to date record of all private health insurers providing complying policies. Your Insurance Company does not appear on the PHIAC's website. Your international health insurance policy is not a complying health insurance policy within the meaning of the PHIA and does not satisfy the requirement of subsection 3(5) of the MLA. While we accept that you had full private hospital cover in Australia through your International insurer, your policy is not an approved hospital cover with a registered fund under PHIA. There are no other exemptions that apply to your specific circumstances, therefore you are liable for the MLS. You may have had "adequate" private health cover, but your overseas insurance provider was not an "approved" provider by PHIAC

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.