Changes to HIF's Corporate Structure
HIF is in the final stages of preparation to transfer its incorporation status from an incorporated association (under the Associations Incorporation Act 1987 (WA)) to a company limited by guarantee (under the Corporations Act 2001 (Cth)). We are doing this to comply with Federal Government legislation.
HIF cannot continue as an incorporated association
The Private Health Insurance Legislation Amendment Act 2008 (Cth) (“PHILA Act”) was introduced in 2008 to amend the Private Health Insurance Act 2007 (Cth). The PHILA Act requires HIF to be a company on or before 1 January 2010 to ensure its registration as a private health insurer with the regulator, the Private Health Insurance Administration Council (“PHIAC”), continues. HIF cannot offer private health insurance unless it is registered with PHIAC.
Transfer of incorporation
The Transfer of Incorporation (HBF and HIF) Act 2009 (WA) was enacted by the Western Australian Government to create a legislative mechanism for the transfer of HIF’s incorporation to under the Corporations Act 2001 (Cth).
By following the strict requirements of this legislation, including lodging a notice at the Australian Securities and Investments Commission (“ASIC”) together with a company limited by guarantee constitution, the Minister for Commerce (WA) should issue an order published in the Gazette deeming HIF as a public company limited by guarantee registered under the Corporations Act 2001 (Cth) on a certain date.
The Board of HIF intends to raise the matter at the next HIF members’ meeting in September 2009.
Appreciation
HIF extends its appreciation to the Western Australian Government, the Minister for Commerce, the Honourable Troy Buswell and staff of the Department of Commerce for enacting legislation that will enable HIF’s smooth transition.
Communication with stakeholders
HIF has kept its members informed through its newsletter magazine, SmartHealth. In addition, HIF has been liaising with industry/government stakeholders, including PHIAC, the Department of Health and Ageing and the Department of Commerce (WA) to:
(a) ensure HIF remains compliant with the law throughout (and after) the transition phase;
(b) access their feedback and comment; and
(c) ensure the new governance structure will function in harmony with working towards achieving best practice in corporate governance.
The proposed constitution will remain a draft document until such time as all stakeholders have had an opportunity to provide feedback to HIF.
The Minister for Commerce (WA) must approve HIF’s constitution after it has been lodged with ASIC, and before the Minister finally issues an order pursuant to the Transfer of Incorporation (HBF and HIF) Act 2009 (WA).
Key features of the change
HIF as Health Insurance Fund of W.A. (Inc.) will become the Health Insurance Fund of W.A. Ltd with the following key features:
- HIF will be a company limited by guarantee
- A new constitution will be adopted for the governance of the company
- HIF will remain an open access not for profit registered private health insurer
- The majority of existing (i.e. pre-company) members will become contributors and policy holders (persons under 18 years of age will not be contributors)
- A limited number of contributors will become company members (i.e. not less than 12 and not more than 18 in number)
- Contributors will have the right to elect fellow contributors to company membership at an annual meeting of contributors
- Company members will have a right to vote on matters to be decided at members’ meetings (i.e. the interests of contributors will be represented through the voting rights of company members)
- Company members must give a personal financial guarantee for the payment of HIF’s debts and liabilities
- All policy holders have a right to attend members’ meetings and be heard without voting rights
Key features - Detail Summary
Benefits of the new constitution
HIF’s proposed constitution has been designed to reflect modern business processes and best practice for HIF's governance as a company limited by guarantee. We believe the proposed constitution is a thorough document that not only reflects an appropriate balance between the rights and obligations of policy holders, contributors and members, but also maintains sufficient flexibility to allow the Board to govern the Fund for the benefit of all policy holders fairly and equitably without introducing new layers of administrative cost.
Other health funds
Like HIF, other health funds have had to or are going to comply with the same legislation as HIF, and become a company on or before 1 January 2010. Other health funds have similar governance models to the model proposed by HIF.
HIF’s insurance products and services will not be affected
Our focus remains unchanged. We will continue to strive for excellence in every aspect of our operations. Our health and wellness products and services will not be affected, except for changes we will initiate as part of our ongoing work towards delivering better customer service, a greater range of offerings, improved rebates and affordability.
HIF’s business rules define HIF’s relationship with policy holders, contributors and company members. The business rules relate to payment of premiums, transfers to and from another fund, waiting periods, product coverage and benefits (including rebates). Our business rules will remain substantially the same, if not the same in most areas.
Some changes will be made to ensure the business rules operate in harmony with HIF’s new constitution. In a number of instances, the term Member or Membership will be replaced by Contributor or Contributorship or Policy Holder or Policy Holders.
Time of HIF becoming a company limited by guarantee
Our intention is for HIF to be a company on or before 1 December 2009.
Members’ rights and obligations
As indicated in the key features section, HIF will be a company limited by guarantee with a new constitution. Whilst the constitution has been purpose-built to suit HIF’s particular requirements and circumstances, it will have features similar to the constitutions of many other Australian health funds.
Under the new company structure, a person covered under a private health insurance policy of HIF will be referred to as a:
(a) Policy holder – This term is not defined in the new constitution, however the term is will be used to refer to any person covered under a health insurance policy issued by the Fund (i.e. HIF) and which is paid up to date; or
(b) Contributor – The constitution defines a contributor as a contributor to the Fund whose contributions are paid up to date in respect of his or her health insurance policy issued by the Fund and who has attained, or is over the age of eighteen years, and whose name is entered in the Register of Contributors; or
(c) Member – The constitution defines a member as a person whose name is entered in the Register as a member of the Company.
Meeting of contributors – The HIF Board must arrange to hold a meeting of contributors not less than 35 days and not more than 49 days before the Annual General Meeting. A meeting of contributors can be called by the Board at any time. At least twenty contributors acting together may also request a meeting of contributors.
The main purpose of the annual meeting of contributors is to elect or re-elect members, however any other business requiring consideration can be dealt with by that meeting.
Meeting of members – Company members and contributors are entitled to attend a meeting of members. A members’ meeting is a General Meeting. An Annual General Meeting (“AGM”) of members is required to be held in accordance with the Corporations Act 2001 (Cth).
Only members can vote in respect of resolutions put to a General Meeting of members that is called by a director or directors, including a General Meeting called pursuant to the Corporations Act 2001 (Cth).
Contributors have the right to receive notices of all General Meetings and attend them and be heard, but a contributor will not be entitled to vote.
Contact HIF about the changes
Write to:
The Secretary
Health Insurance Fund of W.A. (Inc.)
GPO Box X2221
PERTH WA 6000