Tuesday, 1 June 2021
Department of Finance
The Health Insurance Levy is a stamp duty paid by health insurance companies to support the Risk Equalisation Fund (REF).
It is charged as a fixed amount on each health insurance policy, with the amount paid dependent on the nature of the policy. The fixed amount can vary from year to year. The Levy operates in accordance with section 125A of the Stamp Duties Consolidation Act 1999, and has been paid into the REF since 2013. The REF received €752 million from Revenue in respect of the duty in 2019 and €771million in 2020.
Ireland supports its community rated system by providing age related health credits to insurers in respect of older people and less healthy people, to help meet the expected higher cost of health insurance for this group. As a result, all people pay the same premiums net of these tax credits for their health insurance, so helping to prevent insurers cherry-picking younger customers who are less likely to get sick. These tax credits are funded by the health insurance levy which is collected by insurers as part of the annual premium of policy holders. They then pay it to Revenue, and it is then transferred to the REF.
Risk equalisation credits are paid out of the REF to the insurers by the Authority. Any surpluses or deficits in the REF are carried forward and allowed for in setting future levy amounts.
The annual Health Insurance (Amendment) Act sets out the risk equalisation credits and Stamp Duty levy applicable for the following 12 month (1 April to 31 March) period. The level of Stamp Duty to be applied to advanced and non-advanced products for adults and children is then calculated on that basis by the Health Insurance Authority (HIA), and is also provided for in that Act.
For example, in November 2020 the Minister for Health accepted the HIA's recommendation to leave the levy unchanged for the coming 12 month period, i.e. 1 April 2021 to 31 March 2022). The rates currently in effect are shown in the table below.
HIA contracts effective 1 April 2021
|From 1 April 2021||Non-advanced health insurance contracts||Advanced health insurance contracts|
|17 and under||€52||€150|
|18 and over||€157||€449|
I therefore have no plans to revisit the charging of the levy, and as my reply notes, the rate at which it is charged is determined by the Minister for Health each year, on foot of advice from the HIA, and not by the Minister for Finance.