6.a.3. Private health insurance is GST-free. Does this include Overseas Student Health Cover policies?

This issue is a public ruling for the purposes of section 105-60 of Schedule 1 to the Taxation Administration Act 1953.

Section 38-55(1) of the GST Act states that a supply of private health insurance is GST-free.

Private health insurance is defined in section 195-1 of the GST Act as: insurance provided under a contract of insurance that was entered into by a registered organisation (within the meaning of Part VI of the National Health Act 1953) in the course of carrying on health insurance business (within the meaning of subsection 67(4) of that Act).

To satisfy this definition, the contract of insurance must:

• be entered into by a registered organisation under the National Health Act 1953, and
• be in the course of carrying on a health insurance business.

If the organisation is not registered, the supply of private health insurance will not be a GST-free supply under section 38-55.

If the organisation is registered, it must be in the course of carrying on health insurance business.

For the purposes of the definition of ‘health insurance business’ in section 67(4) of the National Health Act 1953, regulation 48(2B) of the National Health Regulations 1954 provides that ‘health insurance business’ does not include the business of undertaking liability by way of insurance if the liability is undertaken by a registered organisation under an overseas student health insurance contract.

Accordingly, even if an organisation is registered, Overseas Student Health Cover does not satisfy the definition of ‘health insurance business’ and is not GST-free private health insurance for the purposes of section 38-55.