Chubb European Group Plc v The Health Insurance Authority

• Jurisdiction: Ireland
• Judge: Ms Justice Tara Burns
• Judgment Date: 22 October 2018
• Neutral Citation: [2018] IEHC 609
• Court: High Court
• Docket Number: 2017 No. 146 MCA
• Date: 22 October 2018

[2018] IEHC 609

THE HIGH COURT

Burns J.

2017 No. 146 MCA

IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 18C OF THE HEALTH INSURANCE ACT 1994 AS INSERTED BY SECTION 14 OF THE HEALTH INSURANCE (MISCELLANEOUS PROVISIONS) ACT 2009

BETWEEN:

CHUBB EUROPEAN GROUP PLC

Applicant

AND

THE HEALTH INSURANCE AUTHORITY

Respondent

Enforcement Notice – Non-European Economic Area students – Health Insurance Act 1994 – Applicant seeking to have a direction contained in an Enforcement Notice cancelled – Whether the respondent erred in its determination that a non-EEA student is ordinarily resident in the jurisdiction if attending a course of study in excess of one academic year

Facts: The respondent, the Health Insurance Authority, on 20th March 2017, served an Enforcement Notice on the applicant, Chubb European Group plc, notifying it that the respondent was of the opinion that the applicant was contravening s. 16 of the Health Insurance Act 1994 by offering for sale its Medicover Policy to non-European Economic Area students (non-EEA students) attending a course of study in Ireland of more than one academic year's duration. It directed the applicant to restrict the availability of the Medicover Policy to non-EEA students attending a course of study in Ireland of not more than one academic year's duration or to become a registered undertaking. Pursuant to s. 18C of the 1994 Act, the applicant instituted proceedings seeking to have the direction contained in the aforementioned Enforcement Notice cancelled. The challenge to the Enforcement Notice was twofold: the applicant challenged the respondent's interpretation of the phrase "ordinarily resident in the State" within the meaning of s. 2(1)(d)(i) of the 1994 Act and claimed that the respondent failed to comply with the statutory requirements set out in s. 18B of the 1994 Act.

Held by the High Court (Burns J) that the respondent had not erred in its determination that a non-EEA student is ordinarily resident in the jurisdiction if attending a course of study in excess of one academic year and that the respondent had complied with the terms of s. 18B of the 1994 Act with respect to the Enforcement Notice issued.

Burns J held that she would refuse the relief sought by the applicant.

Relief refused.

JUDGMENT of Ms Justice Tara Burns delivered on the 22nd October, 2018

The Health Insurance Act 1994

1 Section 1A of the Health Insurance Act 1994, as amended (hereinafter referred to as 'the Act of 1994') sets out the principal objective of the Act as follows:-

'(1) The principle objective of this Act is to ensure that, in the interest of the common good and across the health insurance market, access to health insurance cover is available to consumers of health services with no differentiation made between them (whether effected by risk equalisation credits or stamp duty measures or other measures, or any combination thereof), in particular as regards the costs of Health Services, based in whole or in part on the health risk status, age or sex of, or frequency of provision of health services to, any such consumers or any class of such consumers, and taken into particular account for the purposes of that objective-

(a) the fact that the health needs of consumers of health services increase as they become less healthy, including as they approach and enter old age,

(b) the desirability of ensuring in the interests of society and intergenerational solidarity, and regardless of the health risk status or age of, or frequency of provision of health services to, any particular generation (or part thereof), that the burden of the cost of health services be shared by insured persons by providing for a cost subsidy between the more healthy and the less healthy, including between the young and the old, and, without prejudice to the generality of that objective, in particular that the less healthy, including the old, have access to health insurance cover by means of risk equalisation credits,

(c) the manner in which the health insurance market operates in respect of health insurance contracts, both in relation to individual registered undertakings and across the market, and

(d) the importance of discouraging registered undertakings from engaging in practices, or offering health insurance contracts, whether by segmentation of the health insurance market (by whatever means) or otherwise, which have as their object or effect the favouring of the coverage by the undertakings of the health insurance risk of the more healthy, including the young, over the coverage of the health insurance risk of the less healthy, including the old.

(2) A registered undertaking shall not engage in a practice, or effect an agreement (including a health insurance contract), which has as its object or effect (whether in whole or in part) the avoidance of the achievement of the principle objective.'

2 Pursuant to s. 2(1) of the Act of 1994:-

'Health benefits undertaking' is defined as meaning 'a person (including a body established under the laws of a place outside the State) carrying on health insurance business'.

'Health insurance business' is defined as meaning 'the business of effecting health insurance contracts'.

'Health insurance contract' is defined as meaning 'a contract of insurance, or any other insurance arrangement, the purpose or one of the purposes of which is to provide for the making of payments by an undertaking, whether or not in conjunction with other payments, specifically for the reimbursement or discharge in whole or in part of fees or charges in respect of the provision of hospital in-patient services or relevant health services but does not include:–

(d) A contract of insurance, or any other insurance arrangement, the purpose of which is to provide for the making of payments specifically for the reimbursement or discharge of fees or charges in respect of the provision of hospital in-patient services or relevant health services to persons or any dependants of any of them and one of the following conditions is satisfied-

(i) neither the said persons nor any such dependents are ordinarily resident in the State, or

(ii) where any of the persons to whom the said contract or arrangement relates are temporarily resident in the State during the subsistence of the said contract or arrangement-

(1) those persons are so resident solely for the purpose of carrying out their duties as employees, and

(2) those persons constitute not more than-

(A) 20% of the total number of persons (other than dependents of them) to whom the said contract or arrangement relates, and

(B) 20 of the total number of persons employed in the State by the one person.'

3. Section 4 of the Act of 1994 imposes criminal liability on any person who contravenes a provision of the Act.

4. Sections 7, 8, 9 and 10 of the Act of 1994 impose various obligations and restrictions on registered undertakings, which in essence amount to the principal requirements of the Act of 1994, namely community rating, open enrolment, lifetime cover and minimum benefit.

5. Section 14 of the Act of 1994 requires a Register of Health Benefits Undertakings to be established and sets out related matters in respect of becoming a registered undertaking pursuant to the Act.

6. Section 16 of the Act of 1994 provides:-

'A person other than a registered undertaking shall not carry on health insurance business'.

7. Section 18B of the Act of 1994 provides inter alia:-

'(1) [W]here the Authority is of the opinion that a person-

(a) is contravening a relevant provision, or

(b) has contravened a relevant provision in circumstances that make it likely that the contravention will continue or be repeated,

then the Authority may serve on the person a notice in writing, accompanied by a copy of this Part-

(i) stating that it is of that opinion,

(ii) specifying the relevant provision as to which it is of that opinion and the reasons why it is of that opinion,

(iii) directing the person to take such steps as are specified in the notice to remedy the contravention or, as the case may be, the matters occasioning it, and

(iv) specifying a period...within which those steps must be taken, being a period reasonable in the circumstances.

(4) The Authority may cancel an enforcement notice by notice in writing served on the person concerned.

(5) Where a person fails to take the steps specified in an enforcement notice served on the person, the Authority may, on notice to that person, apply in a summary manner to the High Court for an order requiring the person to take those steps (or to take such varied or other steps for the like purpose as may be specified in the order), and the court-

(a) may-

(i) make the order sought,

(ii) make the order sought subject to such variations to those steps as may be specified in the order, or

(iii) make the order sought subject to such other steps for the like purpose as may be specified in the order, or

(b) may dismiss the application,

and, whether paragraph (a) or (b) is applicable, may make such order as to costs as it thinks fit in respect of the application.'

8. Section 18C of the Act of 1994 provides:-

'(1) A person on whom an enforcement notice has been served may, on notice to the Authority, not later than 45 days after being so served, apply to the High Court for the cancellation of any direction specified in the notice and, on such an application, the court may-

(a) cancel the direction,

(b) confirm the direction, or

(c) vary the direction,

and, whether paragraph (a), (b) or (c) is applicable, make such order as to costs as it thinks fit in respect of the application.

(2) The decision of the High Court under this section on a direction specified in an enforcement notice shall be final save that, by leave of that court or of the Supreme Court, an appeal by the Authority or the person...