Health Insurance (Amendment) Act 2012

1. Definition.

1.— In this Act “Principal Act” means the Health Insurance Act 1994.

2. Amendment of section 1A of Principal Act.

2.— Section 1A of the Principal Act is amended—

(a) by substituting the following subsection for subsection (1):

“(1) The principal objective of this Act is to ensure that, in the interests of the common good and across the health insurance market, access to health insurance cover is available to consumers of health services with no differentiation made between them (whether effected by risk equalisation credits or stamp duty measures or other measures, or any combination thereof), in particular as regards the costs of health services, based in whole or in part on the health risk status, age or sex of, or frequency of provision of health services to, any such consumers or any class of such consumers, and taking into particular account for the purposes of that objective—

(a) the fact that the health needs of consumers of health services increase as they become less healthy, including as they approach and enter old age,

(b) the desirability of ensuring, in the interests of societal and intergenerational solidarity, and regardless of the health risk status or age of, or frequency of provision of health services to, any particular generation (or part thereof), that the burden of the costs of health services be shared by insured persons by providing for a cost subsidy between the more healthy and the less healthy, including between the young and the old, and, without prejudice to the generality of that objective, in particular that the less healthy, including the old, have access to health insurance cover by means of risk equalisation credits,

(c) the manner in which the health insurance market operates in respect of health insurance contracts, both in relation to individual registered undertakings and across the market, and

(d) the importance of discouraging registered undertakings from engaging in practices, or offering health insurance contracts, whether by segmentation of the health insurance market (by whatever means) or otherwise, which have as their object or effect the favouring of the coverage by the undertakings of the health insurance risk of the more healthy, including the young, over the coverage of the health insurance risk of the less healthy, including the old.”,

and

(b) in subsection (2), by deleting “specified in subsection (1)”.

3. Amendment of section 2 of Principal Act.

3.— Section 2 of the Principal Act is amended—

(a) in subsection (1)—

(i) in the definition of “community rating”, by deleting “specified in section 1A(1)”,

(ii) by substituting the following definition for the definition of “net premium”:

“ ‘net premium’—

(a) in relation to a health insurance contract effected for a period other than a period commencing on or after 1 January 2013, means the premium payable under the contract in respect of an individual in any year of assessment after—

(i) the deduction made from the premium to which the individual is entitled, for that year of assessment, by virtue of section 470 of the Taxes Consolidation Act 1997, and

(ii) the deduction (if any) made from the premium to which the individual is entitled, for that year of assessment, by virtue of section 470B of the Taxes Consolidation Act 1997,

(b) in relation to a health insurance contract effected for a period commencing on or after 1 January 2013, means the premium payable under the contract in respect of an individual in any year of assessment after—

(i) the deduction made from the premium to which the individual is entitled, for that year of assessment, by virtue of section 470 of the Taxes Consolidation Act 1997, and

(ii) taking into account the part (if any) of the premium which the individual is entitled not to have collected from the policy holder concerned, for that year of assessment, by virtue of section 11C(1);”,

(iii) by deleting the definitions of “risk equalisation” and “scheme”, and

(iv) by inserting the following definitions:

“ ‘authorised officer’ means a person appointed under section 18E to be an authorised officer;

‘frequency of provision of health services’ includes history of health insurance claims;

‘health risk status’, in relation to any person (howsoever described), includes—

(a) the present use of, or likely future use of, hospital services by the person,

(b) the sexual orientation of the person, and

(c) the suffering or prospective suffering of the person from a chronic illness or other medical condition or from an illness or medical condition of a particular kind;

‘principal objective’ means the principal objective specified in section 1A(1);

‘risk equalisation credits’ has the meaning assigned to it by section 6A(1);

‘Risk Equalisation Scheme’ shall be construed in accordance with section 11A;”,

and

(b) by adding the following subsection after subsection (2):

“(3) In this Act a reference to—

(a) a disease includes a reference to an illness, and

(b) an illness includes a reference to a disease.”.

4. Amendment of section 3 of Principal Act.

4.— Section 3 of the Principal Act is amended—

(a) in subsection (2), by inserting “(or, in the case of regulations under section 11E, the Authority)” after “the Minister”,

(b) in subsection (3), by deleting “(other than a regulation referred to in subsection (4))”, and

(c) by deleting subsection (4).

5. Offences.

5.— (1) The Principal Act is amended by substituting the following section for section 4:

“Offences.

4.— (1) A person who contravenes a provision of this Act shall be guilty of an offence and shall be liable—

(a) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months or both, or

(b) on conviction on indictment, to a fine or imprisonment for a term not exceeding 5 years or both.

(2) A person who contravenes a provision of a regulation under this Act stated to be a penal regulation shall be guilty of an offence and shall be liable on summary conviction to a class A fine or imprisonment for a term not exceeding 12 months or both.

(3) A person who, after conviction for an offence under subsection (1) or (2), continues to contravene the provision concerned, shall be guilty of an offence on each day on which the contravention continues and for each such offence shall be liable—

(a) on summary conviction, to a class E fine, or

(b) on conviction on indictment, to a fine not exceeding €50,000.

(4) Where an offence under this Act is committed by a body corporate and it is proved that the offence was committed with the consent or connivance, or was attributable to any wilful neglect, of a person who was a director, manager, secretary or other officer of the body corporate, or a person purporting to act in that capacity, that person, as well as the body corporate, shall be guilty of an offence and may be proceeded against and punished as if he or she were guilty of the first-mentioned offence.

(5) Where the affairs of a body corporate are managed by its members, subsection (4) applies in relation to the acts and defaults of a member in connection with his or her functions of management as if he or she were a director or manager of the body corporate.

(6) The Authority may bring and prosecute summary proceedings for an offence under this Act.

(7) Notwithstanding section 10(4) of the Petty Sessions (Ireland) Act 1851, summary proceedings for an offence under this Act to which that provision applies may be instituted—

(a) within 12 months from the date on which the offence was committed, or

(b) within 6 months from the date on which evidence sufficient, in the opinion of the person instituting the proceedings, to justify proceedings comes to that person’s knowledge,

whichever is the later, provided that no such proceedings shall be commenced later than 2 years from the date on which the offence concerned was committed.

(8) For the purposes of subsection (7)(b), a certificate signed by or on behalf of the person initiating the proceedings as to the date on which evidence referred to in that subsection came to his or her knowledge shall be evidence of that date and, in any legal proceedings, a document purporting to be a certificate under this subsection and to be so signed shall be deemed to be so signed and admitted as evidence without proof of the signature of the person purporting to sign the certificate, unless the contrary is shown.

(9) On convicting a person of an offence under this Act, the court shall unless satisfied that there are special and substantial reasons for not so doing, order the person to pay to the Authority the costs and expenses, measured by the court, incurred by the Authority in relation to the investigation, detection and prosecution of the offence.”.

(2) Subsection (1), in so far as it relates to the amendment of the Principal Act, shall come into operation 30 days after the passing of this Act.

6. Interpretation of Part II.

6.— The Principal Act is amended by substituting the following section for section 6A:

“6A.— (1) In this Part and Schedules 3 and 4—

‘advanced cover’ shall be construed in accordance with section 11E(4);

‘age group’ means age group as prescribed in regulations made under section 7D, and includes any age group, whether or not by reference to any one or more of the following:

(a) being less than a specified age;

(b) being of a specified age or over such age but under another specified age; or

(c) being of a specified age or over such age;

‘age-related tax credit’ has the same meaning as in section 470B(4) of the Taxes Consolidation Act 1997;

‘approved accounting standards’ means accounting standards which are in accordance with generally accepted accounting principles in the State;

‘changed existing contract’ has the meaning assigned to it by section 7AB(2)(a);

‘cumulative net financial impact’, in relation to a registered undertaking or former registered undertaking which has furnished the Authority with information under section 7F(1) in respect of a period, means the difference between—

(a) the total amount of the age-related tax credits and risk equalisation credits recorded in accounts for that undertaking in respect of that period as extracted from that information by the undertaking in respect of that period, and

(b) the total amount of the stamp duty referred to in section 125A of the Stamp Duties Consolidation Act 1999 recorded in accounts for that undertaking in respect of that period as extracted from that information by the undertaking in respect of that period;

‘draft report’ has the meaning assigned to it by section 7F(7);

‘Fund’ means the Risk Equalisation Fund established under section 11D;

‘hospital bed utilisation credit’ means the relevant amount payable from the Fund in respect of each hospital stay, on or after 31 March 2013, involving an overnight stay in a hospital bed in private hospital accommodation by an insured person where the insured person is such a person under a health insurance contract effected for any period commencing on or after 31 March 2013;

‘information return’ means an information return referred to in section 7D(1);

‘non-advanced cover’ shall be construed in accordance with section 11E(4);

‘positive’, in relation to the cumulative net financial impact on a registered undertaking or former registered undertaking which has submitted one or more information returns to the Authority in respect of a period, means that, for that period and that undertaking, the amount specified in paragraph (a) of the definition of ‘cumulative net financial impact’ in this subsection exceeds the amount specified in paragraph (b) of that definition;

‘private hospital accommodation’ means—

(a) accommodation in a private hospital, whether or not in a bed, or

(b) accommodation in a publicly funded hospital in a bed which is designated, pursuant to Article (8)(i) of the Health Services (In-Patient) Regulations 1991 (S.I. No. 135 of 1991), as a designated private bed;

‘relevant amount’, in relation to the definition of ‘hospital bed utilisation credit’ in this section and an insured person referred to in that definition, means the lower of the following:

(a) the amount specified in Schedule 3 for the purposes of that definition multiplied by the number of nights the insured person stayed in private hospital accommodation which fall within the hospital stay concerned referred to in that definition;

(b) the sum of all benefits paid under the health insurance contract concerned referred to in that definition in respect of hospital in-patient services provided during the hospital stay concerned referred to in that definition of the insured person;

‘relevant contract’ has the meaning assigned to it by section 125A(1) of the Stamp Duties Consolidation Act 1999;

‘relevant contract (advanced cover)’ means a relevant contract which is not a relevant contract (non-advanced cover);

‘relevant contract (non-advanced cover)’ means a relevant contract which falls within a type of relevant contract specified in regulations under section 11E as a type of relevant contract in respect of which the Authority is satisfied under that section that it does not provide for advanced cover;

‘relevant financial provisions’ means—

(a) the Risk Equalisation Scheme,

(b) section 125A of the Stamp Duties Consolidation Act 1999, or

(c) section 470B of the Taxes Consolidation Act 1997,

or any combination of any of the Risk Equalisation Scheme (including any constituent provision of the Scheme) and any section referred to in paragraph (b) or (c);

‘relevant market sector’, in relation to information returns made to the Authority for any period of 6 months referred to in section 7D(1), means all the registered undertakings or former registered undertakings which have made those returns;

‘relevant period’ has the meaning assigned to it by section 7D(1)(b);

‘risk equalisation credits’—

(a) in relation to an individual insured under a health insurance contract effected by a registered undertaking for any period commencing on or after 1 January 2013, means—

(i) the payment from the Fund to the undertaking on behalf of the individual of any hospital bed utilisation credits which the individual is entitled to have so paid, and

(ii) the payment from the Fund of the part (if any) of the premium payable under the contract which the individual is entitled to have so paid by virtue of section 11C(1),

and

(b) in relation to such undertaking and such contract, means—

(i) the amount of the hospital bed utilisation credits (if any) referred to in paragraph (a)(i), and

(ii) the amount of the part (if any) of the premium payable referred to in paragraph (a)(ii) that it has not collected from the policy holder by virtue of section 11C(1);

‘type of cover’ means a specific health insurance contract which provides for the payment of prescribed benefits where either—

(a) the particulars relating to the contract are contained in The Register of Health Insurance Contracts, or

(b) the particulars relating to the contract were once contained in that Register but, notwithstanding that such particulars are no longer contained in that Register, prescribed benefits are still payable under the contract.

(2) Reasonable profit shall be determined under section 7F(4) in accordance with—

(a) Article 33 of the European Union framework for State aid in the form of public service compensation (2011) (2012/C8/03) [^1] (the text of which is set out for convenience of reference in Schedule 2), and

(b) any factors that are prescribed as factors that may be taken into account for the purposes of so determining reasonable profit in accordance with the said Article.”.

7. Amendment of section 7 of Principal Act.

7.— Section 7 of the Principal Act is amended—

(a) in subsection (1)(a)—

(i) in subparagraph (i)(I), by substituting “60” for “31”, and

(ii) in subparagraph (ii)(II), by deleting “specified in section 1A(1)”,

and

(b) in subsection (3), by substituting the following paragraph for paragraphs (a) and (b):

“(a) the health risk status, age or sex of, or frequency of provision of health services to, a person, or”.

8. Amendment of section 7A of Principal Act.

8.— Section 7A of the Principal Act is amended, in subsection (4), by substituting the following paragraph for paragraph (b):

“(b) the insured person has previously effected or been named in a health insurance contract with arestricted membership undertaking.”.

9. Submission of new type of health insurance contract to Authority, etc.

9.— The Principal Act is amended by substituting the following section for section 7AB:

“7AB.— (1) A registered undertaking shall not offer in the State a new type of health insurance contract (and regardless of whether the contract is already offered outside the State by the undertaking or any other person) unless it has submitted a sample of the contract to the Authority not later than 30 days before first making such offer.

(2) Subject to subsection (3), a registered undertaking shall not change in any material particular the benefits payable under a type of health insurance contract that it offers in the State unless it has submitted a sample of the contract as so changed (in this Act referred to as a ‘changed existing contract’) to the Authority not later than 30 days before first making such change.

(3) (a) A registered undertaking shall not in any calendar year change the benefits payable under a type of relevant contract (non-advanced cover) that it offers in the State such that it becomes a type of relevant contract (advanced cover) except—

(i) in the case of the calendar year 2013, with effect from 31 March 2013, and

(ii) in the case of any subsequent calendar year, with effect from 1 January of that subsequent calendar year.

(b) A registered undertaking shall not in any calendar year change the benefits payable under a type of relevant contract (advanced cover) that it offers in the State such that it becomes a type of relevant contract (non-advanced cover) except—

(i) in the case of the calendar year 2013, with effect from 31 March 2013, and

(ii) in the case of any subsequent calendar year,with effect from 1 January of that subsequent calendar year.

(4) Without prejudice to section 7(1)(a), a registered undertaking may vary the premium payable for effecting a type of health insurance contract if it gives notice in writing of the variation to the Authority not less than 30 days before the variation takes effect.