Private ruling: Medicare levy surcharge - overseas health insurance
Published: August 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you covered by an appropriate private health insurance policy? | A1: No

Relevant facts and circumstances: You hold a health insurance policy which is issued by a fund located outside Australia. The fund is not a private health insurer registered under the Private Health Insurance Act 2007 .

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

Reasons for decision: Summary: The 1% Medicare levy surcharge is imposed by the Medicare Levy Act 1986 (MLA). Section 8B of the MLA provides that a taxpayer will be liable to pay the Medicare levy surcharge (MLS) for any part of an income year where: · during the whole of the year the taxpayer is not married, does not have any dependent children and is not a prescribed person; · the person is not covered by a health insurance policy that provides private patient hospital cover; and · the total of the taxpayer's taxable income and reportable fringe benefits total for the year exceeds $80,000. Subsection 3(5) of the MLA states the following: For the purposes of this Act, a person is covered by an insurance policy that provides private patient hospital cover if: (a) the policy is a complying health insurance policy (within the meaning of the Private Health Insurance Act 2007 ) that covers hospital treatment (within the meaning of that Act); and (b) any excess payable in respect of benefits under the policy is no more than: (i) $500 in any 12 month period, in relation to a policy under which only one person is insured; and (ii) $1,000 in any 12 month period, in relation to any other policy. The registration procedure contained in the Private Health Insurance Act 2007 (PHIA) imposes a wide range of conditions of registration including regular provision of information, non-discrimination, minimum reserves etc. and registered organizations are subject to significant scrutiny and controls by the Minister and his department. As your health insurance fund is not registered under the PHIA, it cannot issue complying health insurance policies. You are therefore not considered to be covered by an appropriate private health insurance policy.