Insurance facts and figures 2007 - PwC

• An annual FCR;
• An appointed actuary’s statement of pecuniary interests;
• An audit report on compliance with risk management statements; and
• A reinsurance report (if applicable).
HEALTH INSURANCE
All health insurance funds must provide a number of other returns under various
legislative requirements. These include:
• PHIAC 1 Returns – Quarterly state and territory-based returns must be prepared if
the health benefits fund has more than 500 Single Equivalent Units in each state or
territory. These must be prepared in accordance with the guidelines established in
PHIAC circulars. Each quarterly return is audited by the fund’s external auditor at the
end of the financial year;
• PHIAC 2 Returns – This is the main reporting requirement under the solvency and
capital adequacy standards. Quarterly returns are lodged with PHIAC and the
annual return is audited by the fund’s external auditor. The annual return includes an
unaudited certification by directors regarding risk management;
• PHIAC 3 Returns – These quarterly returns contain prostheses reports and are not
required to be audited;
• PHIAC 4 Returns – Specialty gap cover data is required to be provided quarterly to
PHIAC. The totals reported on this quarterly PHIAC 4 medical gap report should be
consistent with data reported in the quarterly PHIAC 1 return. These are not required
to be audited;
• 30 per cent Rebate Returns – Health benefits funds are required to lodge a monthly
application for the rebate with Medicare Australia in order to receive the rebate.
The funds are required to prepare an annual schedule of receipts from the Health
Insurance Commission (HIC) under Subsection 16-5(7) of the Private Health Insurance
Incentives Act 1998. This schedule of receipts and the associated systems used to
derive the monthly application must be audited by the fund’s external auditor;
• Second Tier Benefits Returns – The Department of Health and Ageing issued circular
HBF 721/PH 455 in July 2001, which outlined the amended requirements under
Paragraph (bj) of Schedule 1 to the National Health Act. Under these requirements,
if a health facility is accredited with a Commonwealth provider number and it does not
have Hospital Purchaser Provider Agreements (HPPA) or a similar agreement with a
particular health fund, it may approach the fund for its second tier benefits rates. The
health benefits funds are required to calculate 85 per cent of the average HPPA rates,
effective at 1 August, for procedures that are included in the majority of their HPPAs.
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