Section 125A Levy on authorised insurers

Summary

This section provides for the collection of a levy on health insurance companies based on the number of persons covered by policies underwritten by them.

The levy is set at €290 in respect of each adult with non-advanced cover, €350 in respect of each adult with advanced cover, €100 in respect of each child (under 18 years of age) with non-advanced cover and €120 in respect of each child (under 18 years of age) with advanced cover, for contracts entered into or renewed on or after 1 January 2014 and on or before 28 February 2014.

For contracts entered into or renewed after 28 February 2014 the levy is set at €290 in respect of each adult with non-advanced cover, €399 in respect of each adult with advanced cover, €100 in respect of each child (under 18 years of age) with nonadvanced cover, and €135 in respect of each child (under 18 years of age) with advanced cover.

The levy is not imposed on Restricted Membership Undertakings, on outpatient/GP products, on cash plans, on certain international contracts or on contracts relating solely to the charge for public hospital in-patient services. The levy is to be paid to the Revenue Commissioners every three months on 21 February, 21 May, 21 August and 21 November.

Details

(1) The section contains definitions of “accounting period”, “advanced cover” and “non-advanced cover”, “authorised insurer”, “due date”, “excluded contract of insurance”, “in-patient indemnity payment” “insured person”, “relevant contract”, “restricted membership undertaking”, “specified rate” and which are self-explanatory.

(2) An authorised insurer must deliver to the Commissioners a statement not later than the 21^st day of the second next month following the end of the accounting period in question.

The statement must include the number of insured persons aged less than 18 years and aged 18 years and over, on the first day of the relevant accounting period, in respect of whom a relevant contract, which provides for either advanced cover or non-advanced cover, is renewed or entered into during the accounting period.

(3) Stamp duty is chargeable at the “specified rate” on a statement delivered under subsection (2).

The specified rate in relation to a statement delivered under subsection (2) in respect of contracts renewed or entered into during the period commencing on 1 January 2014 and ending on 28 February 2014 is:

• €100 in respect of an insured person aged less than 18 years insured under a contract which provides for non-advanced cover,
• €120 in respect of an insured person aged less than 18 years insured under a contract which provides for advanced cover,
• €290 in respect of an insured person aged 18 years or over insured under a contract which provides for non-advanced cover, and
• €350 in respect of an insured person aged 18 years or over insured under a contract which provides for advanced cover.

The specified rate in relation to a statement delivered under subsection (2) in respect of contracts renewed or entered into after 28 February 2014 is:

• €100 in respect of an insured person aged less than 18 years insured under a contract which provides for non-advanced cover,
• €135 in respect of an insured person aged less than 18 years insured under a contract which provides for advanced cover,
• €290 in respect of an insured person aged 18 years or over insured under a contract which provides for non-advanced cover, and
• €399 in respect of an insured person aged 18 years or over insured under a contract which provides for advanced cover.

(4) The stamp duty charged on a statement is payable on delivery of the statement.

(5) The Revenue Commissioners may obtain whatever information they require to ensure that the correct amount of duty is paid.

(6) In the case of failure to deliver a statement by the due date, interest is chargeable on the unpaid stamp duty in accordance with section 159D from the due date to the date the duty is paid. A penalty of €380 for each day the duty remains unpaid is also payable.

(7) Where during any accounting period but before a due date, an authorised insurer ceases to carry on a business and another person acquires the whole, or substantially the whole, of the business, the authorised insurer will not be obliged to make the statement to the Revenue Commissioners on the due date. Instead, the statement is required to be made by the successor. If the successor is already obliged to make a statement, it must include details of the business acquired in its return. Otherwise, the successor is obliged to make a statement in lieu of the authorised insurer.

(8) This subsection enables the Revenue Commissioners to enforce delivery of the statement.

(9) An authorised insurer may not claim the duty or any interest or penalty paid as a deduction in the computation of any other tax or duty which is payable by the authorised insurer.

(10) Where a person during an accounting period switches from one authorised insurer to another and the first authorised insurer is required to include insured persons on that insurers’ statement for that accounting period, the second authorised insurer may exclude those insured persons who are required to be included on the first insurer’s statement from the statement required to be delivered by the second authorised insurer for the same accounting period. The Revenue Commissioners have issued guidelines to ensure that only one levy is paid in any 12-month period for each insured person regardless of the number of health insurance contracts that person has entered into in the 12-month period.

(11) This subsection makes similar provision to that made in subsection (10) where an insured person is deleted from one contract of insurance and takes out a contract of insurance in his or her own right during the same accounting period.

(12) This subsection prevents a contract being taken out for more than one year to avoid payment of the levy. Such contract is deemed to be a yearly contract for each year covered by the contract.

Relevant Date: Finance Act 2014