Common questions
- What is the Scheme?
- Who is Bupa Australia?
- Will the Scheme affect my policy?
- Am I eligible to receive a cash allocation?
- How do I get my cash payment?
- I don't understand how my Estimated Entitlement/Unit allocation was calculated?
- Why is the entitlement I have received different from my Estimated Entitlement?
- Did I need to complete the Payment Authority Form to receive my Entitlement?
- I have been a member for more than 30 years, why am I only getting 30 years tenure?
- What are the next steps?
- Will I be taxed on the cash payment I receive?
- When will I receive my cash payment?
- I voted no/I did not vote, will I still get an allocation?
What is the Scheme?
MBF has received an offer from Bupa Australia to combine the businesses of the MBF Group with the Bupa Australia group for $2.41 billion (the Scheme).
After considering a number of options, the MBF Board has recommended the Scheme. The Scheme was fully described in the Information Memorandum sent to eligible MBF contributors.
Now the Scheme has been approved and implemented Entitlements will be distributed to eligible MBF contributors. Entitlements will be posted to eligible MBF contributors on 30 June 2008.
Together, the two businesses will create a health insurance group with a national footprint – something MBF has long aspired to achieve – providing an ideal platform for future growth.
Who is Bupa Australia?
Bupa Australia is part of an international health and care group. Bupa Australia Health is strong in Victoria and South Australia through its brands HBA and Mutual Community and its brands have been associated with providing health insurance to Australians for more than 70 years.
The ultimate holding company of the Bupa Group has no shareholders and it is therefore able to reinvest its profits back into its businesses for the benefit of customers.
Will the Scheme affect my policy?
You continue to hold your current MBF policy. MBF believes that Bupa Australia has no intention of reducing any hospital or extras benefits under existing MBF private health insurance policies. See section 3 of the Information Memorandum for more information.
Am I eligible to receive a cash payment?
In order to be eligible to receive a cash allocation under the Scheme you must have held an MBF health insurance policy on 8 November 2007 and that policy must not have been in arrears.
MBF is not permitted by law to offer a financial benefit under the Scheme to anyone other than holders of MBF private health insurance policies. Therefore customers of the MBF Group who do not hold a private health insurance policy issued by MBF including customers of MBF Alliances will not be eligible to receive a cash allocation under the Scheme.
How do I get my cash payment?
Payments will be made by cheque unless the eligible MBF contributor has completed and returned by 2 June 2008 the Payment Authority Form with details of their Australian Financial Institution account, in which case the cash allocation will be paid directly into that account. If the Payment Authority Form was received after 2 June 2008 or was not completed correctly the payment will be made by cheque.
Payments will be posted to eligible contributors on 30 June. You should receive it by 7 July 2008, if you do not receive your Entitlement statement by 7 July 2008 please contact the Scheme Hotline on 133 505.
If you are not sure if you completed a Payment Authority Form in time you can check your payment details online at www.mbf.com.au, just follow the Demutualisation link and click on "view or update your details" button.
If you have not received an Information Memorandum pack and you believe you are an eligible MBF contributor please call the Scheme Hotline on 133 505.
I don't understand how my Estimated Entitlement/Unit allocation was calculated?
Schedule 3 of the Information Memorandum contains the detailed Allocation Rules and section 5 of the Information Memorandum explains how your Estimate Entitlement/Unit allocation has been calculated. You should read these carefully.
The number of units that have been allocated to you is set out on your Allocation Form. It comprises of two components:
(a) a base allocation which is based on the scale and type of policy you held on 8 November 2007; and
(b) a tenure allocation which takes into account any changes in scale over your tenure.
Why is the Entitlement I have received different from my Estimated Entitlement?
The Estimated Entitlement provided on your Allocation Form was based on an estimated Unit Value of $1.40.
The estimated Unit Value was calculated based on an estimate of the total Units which will be allocated to all Participating Contributors on the Implementation Date.
An estimate of the total number of Units that will be allocated on the Implementation Date has been used to allow for any additional Units that may be needed to be allocated as a result of decisions of the Review Committee prior to the Implementation Date.
This means that when calculating the estimated Unit Value of $1.40 we already included an estimate of the additional number of Units that the Review Committee may determine, however this is an estimate only and more or less additional Units may be allocated by the Review Committee.
The statement you will receive with your entitlement will clearly set out the final Unit value that was used to calculate your Entitlement.
Did I need to complete the Payment Authority Form to receive my Entitlement?
You only needed to complete the Payment Authority Form if you wished to have your Entitlement paid directly into your Australian Financial Institution account. If you do not complete and return the Payment Authority Form by 2 June 2008 your Entitlement will be paid to you by cheque in your name.
I have been a member for more than 30 years, why am I only getting 30 years tenure?
MBF's first computer system was only installed in October 1976. Data prior to 1976 is only available in hard copy and is not available for all contributors. In order to be fair to all eligible MBF contributors as a whole, the maximum Years of Membership for each Participating Contributor is set at 30 years.
If you want to read more about how your allocation was calculated, please refer to Section 5 of the Information Memorandum and Schedule 3 of the Information Memorandum.
The Allocation Rules which are set out in Schedule 3 and have been developed by MBF to result in an allocation that is fair and reasonable for all Participating Contributors. The development of the allocations involved striking a balance between potentially diverse interests of different groups of Participating Contributors.
Both the Appointed Actuary and the Consulting Actuary have reviewed the Allocation Rules. A summary of their conclusions can be found in Section 1.3 of the Information Memorandum and you can read their entire reports in Schedules 7 and 8 of the Information Memorandum.
The Consulting Actuary is of the opinion that the allocation basis underlying the proposed Allocations Rules is fair and reasonable for Participating Contributors as a whole and should not result in the financial benefit arising from the Scheme, namely the payment of Entitlements, being distributed inequitably between Participating Contributors.
When voting to approve the Scheme, Participating Contributors were approving the Allocation Rules as they are set out in Schedule 3 of the Information Memorandum. As a Participating Contributor you can vote on the Scheme. The ways you can vote are set out in Section 1.12 of the Information Memorandum.
MBF has set out a Review Committee to consider requests for review of allocations, however this process does not review the Allocation Rules themselves. In particular, the Review Committee has no ability to change the 30 year maximum tenure allocation.
What are the next steps?
As the Scheme has now been implemented the next step is the payment of the cash allocations to eligible MBF contributors. Entitlements will be posted to eligible MBF contributors on 30 June 2008 and should be received by 7 July 2008.
Will I be taxed on the cash payment I receive?
Taxation consequences vary for every individual.
The Information Memorandum provides general information on the taxation consequences of the BUPA Australia proposal.
You should read carefully the Tax Advice letter set out in Schedule 9 of the Information Memorandum and section 7.2 of the Information Memorandum.
If you are an Australia resident MBF has been working with the ATO in relation to providing you with information about the correct tax treatment for your Entitlement.
If you are not an Australian resident you will need to seek your own tax advice or contact the Tax office directly and the information provided below does not apply to you.
The ATO has provided information on its website and you can access this information by clicking here.
The Tax Advice letter and information in the Information Memorandum refers to a press release from the Assistant Treasurer dated 26 February 2008, which is annexed to the Tax Advice letter. The amendments referred to in that press release were introduced into Parliament on 26 June 2008.
The draft Bill provides that the receipt of the Entitlement by Participating Contributors will not attract capital gains tax.
However it is important to note that the Bill has only just been introduced and will still need to be debated and passed by both houses of Parliament and receive assent. Therefore until passed in its final form the tax position remains uncertain.
Given the uncertainty of what amount (if any) should be included in your tax return, the ATO has agreed to allow you to lodge your 2007/2008 tax return without including your Entitlement.
The ATO and MBF will let you know what amount (if any) to include in your tax return and how to do this at a later time. You should not wait for this information to complete your 2007/2008 tax return.
The ATO has also stated that no penalty will be imposed on your amended assessment (if you end up needing to do one) and any interest payable up to the due date of your amended assessment will also be reduced to nil.
You will receive a letter together with your Entitlement by no later than 7 July 2008 which will set out the above tax update. Please note that the letter was printed prior to the introduction of the draft Bill, this is the only difference between the information in the letter you receive and the information above.
The ATO will publish updates on this information on its website at www.ato.gov.au/individuals as will MBF on its website www.mbf.com.au.
When will I receive my cash payment?
If you are a Participating Contributor, MBF will dispatch your entitlement on 30 June 2008. You should receive it by 7 July 2008. If you do not receive it by that date please contact the Scheme Hotline on 133 505.
I voted no/I did not vote, will I still get an allocation?
If you are a Participating Contributor, then you will receive an Entitlement, even if you voted 'Against' the Scheme or did not vote at all.
