Our corporate structure and governance.
Who we are, and why we exist.
Health Insurance Fund of Australia Limited ACN 128 302 161 (‘HIF’) is an Australian public company limited by guarantee. Our registered office is located at 100 Stirling Street, Perth, Western Australia 6000, however we provide quality health insurance and friendly personalised service to members who reside throughout Australia. We are registered with the federal regulator, Australian Prudential Regulatory Authority (APRA) as an open access, not-for-profit private health insurer. Our core business purpose is to provide private health insurance to residents of Australia.
Our dominant goal in health insurance business is to help our members (and their dependents) to lead healthy lives. We aim to achieve this goal by providing our members with choices from a range of private hospital and ancillary cover options. We can become involved in a variety of business activities consistent with our dominant goal, for example, the provision of travel and general insurance covers, the management of an investment portfolio and to make profits in other business activities for the purpose of keeping health insurance premiums for HIF members affordable.
We are a not-for-profit, here-for-you fund.
By preserving our status as a registered open access, not for profit member based private health insurer, we qualify for exemption from income tax assessment under the Income Tax Assessment Act 1997 (Cth). HIF is subject to other forms of taxation. As we do not have shareholders, cash dividends are not paid directly to our fund members, however we do return surpluses (if any) to our members in the form of lower premiums, increased rebates and/or new benefits and services. This is just one of the ways we reward our loyal members.
Not all health funds are not-for-profit.
Not all private health insurers are not for profit like HIF. Australia’s largest private health insurer, Medibank Private, operates for profit, as does BUPA, AHM and NIB. NIB is a publicly listed private health insurer that could become the target of a takeover, and in addition to the burden of having to pass income tax charges on to their policy holders in higher premiums, they must also constantly wrestle with the interests of their shareholders who want large profits versus their health insurance policy holders who want reduced or no profits and affordable premiums.
Our origin - where it all began...
HIF commenced in March 1954 as the Western Australian Government Railways Employees’ Hospital and Medical Fund before changing to the Government Employees’ Hospital and Medical Benefits Fund Inc. In February 1978 we became Health Insurance Fund of W.A. (Inc.), an incorporated association under the Associations Incorporations Act 1987 (WA). On 28 June 2010 HIF changed our name to Health Insurance Fund of Australia Limited, to reflect the strong attraction consumers from all over Australia have for our affordable products, friendly and professional service, great benefits and our focus on giving members maximum choice when it comes to selecting their health care provider.
Our legal structure prior to 2010: In 2008, the Federal Government passed the Private Health Insurance Legislation Amendment Act 2008 (Cth) (‘PHILA Act’) to amend the Private Health Insurance Act 2007 (Cth), which is the main body of legislation governing the operation of private health insurers. The PHILA Act required all insurers to be a company within the meaning of the Corporations Act 2001 (Cth) before 1 January 2010 to ensure registration as a private health insurer with APRA continues after that date. In 2009, in collaboration with HIF, the Western Australian Government passed enabling legislation to create a legal mechanism for the transfer of HIF’s incorporation status from an incorporated association under the Associations Incorporations Act 1987 (WA) to an Australian public company limited by guarantee under the Corporations Act 2001 (Cth). On 1 December 2009 HIF became a company.
Our legal structure today: HIF is an Australian public company limited by guarantee and governed by the Corporations Act 2001 (Cth). We are registered with the Australian Securities and Investments Commission (‘ASIC’) in the name of Health Insurance Fund of Australia Limited ACN 128 302 161. The main legislation governing the operation of all private health insurers is the Private Health Insurance Act 2007 (Cth). By virtue of the legislative framework we have chosen to exist under (i.e. open access, not for profit and not subject to income tax), HIF is ideally positioned to provide its contributors with affordable health insurance solutions.
Our corporate governance framework exists to ensure those who are in control are kept accountable and to ensure the interests of members and other stakeholders are protected and preserved. Our constitution, which sets out HIF’s governance framework, functions in harmony with other governance standards or practices established by regulatory authorities, including APRA and ASIC, that HIF is required to comply with.
The Board of HIF, which currently comprises seven directors including a Managing Director, has overall responsibility for corporate governance, including the establishment, review and approval of policies, processes, procedures and practices, as well as assessing its own performance and that of each director individually and management and to regularly monitor and assess financial performance. The Board may establish sub-committees for specific purposes (e.g. Audit and Risk Committee). Under our constitution, the Board must comprise not less than five and not more than nine directors.
The Board must comprise a majority of non-executive directors whilst the majority of directors must ordinarily reside in Australia. Pursuant to our constitution, a director of HIF must be a contributor to the health fund. Other than the role of Managing Director (or other executive director), directors are elected or re-elected at an annual general meeting of company members. The Board has responsibility for nominating directors in conjunction with any nomination committee established by HIF.
Our current Board of Directors comprises of:
- Richard Homsany (Chairman)
- Graeme Gibson (Managing Director)
- Mervyn (Merv) Dudley
- Harold (Harry) Zafer
- Saschelle Blake
We are not a publicly listed company nor do we have shareholders. We do have company members who have given a guarantee to contribute to the assets of HIF for the payment debts and liabilities and adjustment of the rights of contributors amongst themselves in the unlikely event that HIF is wound up. Currently, we have 12 company members although we may have up to 18 company members.
A company member must be a contributor (of premiums) to the health fund(s) operated by HIF. Amongst other roles, company members represent the interests of contributors at HIF’s annual general meeting. A contributor (of premiums) to a health fund(s) operated by HIF is generally referred to as being a health fund member (or fund member) and is to be distinguished from the role of company member.
Health fund rules.
In accordance with the Private Health Insurance Act of 2007 (Cth), HIF is required to operate its health fund activities according to a set of business rules. These rules set out the general principles and rules of fund membership and the way we conduct health insurance business for the benefit of all our fund members. By becoming a member of HIF, you agree to be bound by our fund rules. We also refer to these rules as HIF’s business rules. If you would like to receive a copy of our Fund Rules, please don't hesitate to get in touch.
Association Code of Conduct.
We are a member of Private Healthcare Australia, an association of private health funds established to advance the interests of its members and their contributors at every opportunity in relations with governments, the media, and other organisations involved in the health care field.
We have adopted the Private Healthcare Australia Code of Conduct which was developed following a review by the Federal Government focussing on consumers and the private health insurance environment. The Code was developed to reinforce existing regulatory obligations and to establish minimum standards of business practice and to underscore industry’s commitment to consumers.
The Code covers the following areas:
- Commitment to the Code
- Legislation applicable to private health insurers
- Dispute resolution
- Training employees
- Agents and brokers
- Documentation of policies (e.g. changes to fund rules)