This article gives an introduction to health insurance
. The information is targetted primarily for English-speaking expatriates living in the country. See also: Health insurance
Health insurance has been obligatory for everyone in Germany, including the self-employed, since 2007. Medical treatment can be hugely expensive.
For those employed full-time by a company, the employer pays half of the insurance contributions, the other half comes out of the employee's salary. The employee's half usually totals around 10% of their gross salary. When starting work with a company usually the employee won't have to worry too much about how the system works. The company will automatically sign them up with an insurance company and the contributions automatically deducted from the salary. Sometimes the employee may be asked if they have a preferred insurance company. It is recommended to simply go with one of the big names, like "TK"
(has the most information in English, used to only accept engineers and technical personnel) or "AOK"
(don't speak English, default insurer if you don't choose a different one) or the smaller "SBK"
(evolved from the insurance for Siemens employees, small but caring). They are all pretty similar in their cover, but TK and SBK regularly win the title of "best" public health insurances in the user rankings.
For the self-employed, they pay the full contribution themselves.
There are two types of health insurance in Germany. These are the "public" and "private" systems. This system often causes considerable confusion. Full details are given below.
Public Health insurance
If you are employed in Germany and you are earning less
than the threshold ( Versicherungspflichtgrenze
) of EUR 52,200
.- gross per year (EUR 4,350
gross per month), you are automatically and compulsorily insured in a public health insurance scheme. This is also true for students at a state or state-approved university in Germany and certainly for interns too. This also means that your employer does not have the option of accepting an expat insurance scheme (see below). You are only exempt from mandatory public health insurance as an employee working in Germany if you are seconded ( German: "entsendet") by a company which has its HQ in a member state of the EEA (= European Economic Area; including all of the EU plus Iceland, Liechtenstein and Norway) or in certain contracting states (among them being Canada and Quebec, PR China, Israel, Japan and the USA; for the complete list please check with DVKA.de). "Secondment" exists if the employee goes abroad for work purposes on instructions from his/her employer and the work is time-limited in advance, inter alia because of the particularity of employment or by contract. Unfortunately I found no definition of the maximum acceptable "time-limit". The compulsory membership in German public health insurance while working here is protected by European Regulation No. EEC 1408/71, among others. It is furthermore laid out in the German SGB (=Sozialgesetzbuch), 5th book, § 257
All in all, what this means is: if you are employed by a German company or any other foreign company in Germany and you earn less than EUR 4,350 gross salary per month, you are a mandatory member of the public German health insurance system. You pay half plus 0.9% and your employer pays roughly half of the insurance premium too. As of 2009, the premium has been standardised for all public health insurance companies at 15.5% of gross salary up to the threshold ( Beitragsbemessungsgrenze
) of EUR 47,250 (i.e. EUR 3,937.50 a month). This means that as an employee with a gross salary of more than EUR 3,937.50 a month, you will pay public health insurance capped at EUR 322.88 (8.2% of EUR 3,937.50), and public nursing insurance capped at 50.20€ (1.275% of EUR 3,937.50) if are childless or 40.36€ (1.025% of EUR 3,937.50) if you have a child. Your employer's contribution will be roughly that much again, adding up to 15.5% for public health insurance and 2.3% for public nursing insurance (2.05% if you have a child). Although they more or less offer the same services, it's still worth comparing.
Public health insurance is great, however, if you earn only a small amount (because you get a lot of insurance for a low sum of money) or if you are married and have a spouse and children with you - because they are covered by the public health insurance too (this may change in the near future, though, according to the latest political plans). But beware: since a lot of services from the public health insurance system have been downgraded or cancelled in recent years, you might want to consider getting additional private insurance to cover some services like 1- or 2-bed rooms in hospital, Chefarzt-Betreuung (operation and treatment by the head doctor of the hospital) or full dental services/replacement etc. Even then you might still have to pay some extra if you have a very complicated illness and you try to get the most-respected expert in Germany to treat you, because in these cases treatment is only covered up to a certain limit. If you want to be sure about having enough funds in the event of severe illness to get the best possible treatment, other insurance types (Dread Disease offered by Canada Life or Scandia for instance) are a possibility.
Private Health Insurance
Now if you are earning more
than the threshold of EUR 4,350
gross salary per month, you can elect to leave the public health insurance and get a private health insurance while employed in Germany. Your employer will contribute roughly half of its cost, his share will be up to EUR 287.43 for health insurance and up to EUR 40.26 for nursing insurance, since this is the most he would have had to contribute if you had remained in public health insurance.
Here the comparison between different offers is a bit more complicated and you may want to get the advice of a professional advisor or broker. I have seen some attempts to compare different quotations from different private health insurances, but you cannot just take one quote with the price XYZ and another one with ABC to be paid per month and say that the cheaper one is the better choice - it may vary strongly regarding the insured coverage. The best way to start a comparison is to ask private insurers to send you a quotation "Analog GKV", meaning with the same coverage as the public health insurance. Then you can compare the insurance quotations on an even footing.
You can also lower your premium by using "excess options (Selbstbeteiligung)". This means that you are willing to pay for instance the first 300.- EUR every year out of your own pocket and you will receive reimbursement only for the costs in excess of that 300.- EUR. Since most of the private insurances offer to repay you 1 or 2 monthly premiums after one year of not having using the insurance at all, you should add this repayment amount to the excess-option-amount agreed in your contract and then you know at what medical cost per year it makes economical sense to hand in all invoices to the insurer during any given year. The highest excess option I know of is 2.400.- EUR per year; standard is between 300 and 750 EUR per year.
If you take a very high excess option, you will achieve a similar coverage like with most expat health insurances: you are covered for all serious medical problems, but you will pay for all prescriptions and ordinary consultations of a doctor out of pocket.
So, a Private Health insurance can be much lower in monthly premium than a Public health insurance while providing you with more and better coverage.
Still: if you are married with children and your spouse does not earn any income here in Germany, public insurance covering all family members with your own premium can be the better deal. And if you want to have a better coverage than Public Insurance offers, you can always get an add-on insurance from private insurance companies, where you cover certain medical issues that you deem to be important for you.
Use of Foreign Health Insurance
One of the main questions I have seen on TT is the question Hutcho asked me too: can I use a private insurance from abroad, which is cheaper than German insurance even though it may not cover all that German private insurance offers? For instance Expathealthcare, Bupa etc. The answer I finally got from the official side is, amazingly, YES! Apparently you can... My source for this valuable information is someone at the DVKA, the "Deutsche Verbindungsstelle Krankenkasse - Ausland", a federal institution. But this of course applies only if you are above the magic threshold of monthly income stated above, i.e. would be eligible for Private Health insurance according to German laws and regulations. Hence theoretically you could ask your employer to accept a BUPA or MediCare policy - even as a German employee, if I understand this regulation correctly.
However: a) foreign insurance is most certainly not certified according to § 257, 2a and hence your employer has no obligation to pay a share of the insurance costs, as he is required to do if you select a licensed German private health insurance. He may nonetheless decide to do so. But some tax issues would inevitably arise for the employer if he does. b) According to German law/regulations you will also need an additional "long-term care insurance". For this you will need to pick a German insurance because to my knowledge no foreign insurance is qualified or certified for this insurance. This insurance is required by law; you cannot avoid it.
Now remains one important question: why are foreign health insurances so much less expensive than German health insurances? Of course there are differences in the coverage that cause a different computation of risk for the insurance company to be asked to pay out of the insurance coverage. But what makes a German insurance also so much more expensive is that they build up a capital stock for the insured early on in order to make sure that health costs do not explode in old age. This is something the expat insurances seem not to do if you look at the increase of premiums for people aged 30 to people aged 50. Therefore, if you plan to stay in Germany for a longer period of time, it might be wise to pay the higher premium on the German insurance in order to keep costs stable in later years.
Moreover, you should be aware that expat health insurance schemes have limitations on cover for chronic conditions. Such policies are designed to cover treatment of medical conditions that respond quickly to treatment (acute conditions). Medical insurance is not intended to cover you against the cost of recurrent, continuing or long-term treatment of chronic medical conditions since these treatments become a series of predictable, rather than unexpected, events. See the following link for further information and for examples: AXA PPP - chronic conditions
Health insurance for freelancers
Health insurance is usually arranged through a person's employer, who also contributes to the scheme. The self-employed, on the other hand, are responsible for arranging their own private insurance. Since 2007, even the self-employed are legally obliged to have health insurance cover. They can choose between private health insurance schemes offered by German providers and the expat schemes outlined above. Advice from an independent agent is recommended. Health insurance costs are tax deductible (at least that part of it that corresponds to basic cover as offered by public health insurances); an insurance agent or financial advisor will be able to advise you on this.
It is now up to each individual to check the services offered by foreign insurance companies with regard to his/her needs and security requirements and then decide which is the overall best option. As it is, an employer can not force you to legally use a German private health insurance at all. But the computer system may not be able to handle having no employer-share of health insurance or other such administration problems... And you should make sure to pick an insurance company that has a good track record in actually paying you the money if you need to get expensive treatment or hospitalization. Otherwise even a fortnight in a German hospital with surgery can easily run up a bill of tens of thousands of euros. And finally you need to decide if you plan to stay in Germany only for a short period of time or for several years or maybe the rest of your life: in the later cases, the German insurance will give you a good deal on the long run.
Even though this will of course sound somewhat selfish considering my own profession, if you can opt out of the public insurance system the best advice is to take an independent broker to help you understand your options and to guide you through the legal jungle here in Germany.
Good luck to all of you,
CR&Cie. Insurance and Finance
Advertised insurance agencies
Contact one or more of the following TT-advertised insurance agents. They will be happy to give free quotations and advice on all kinds of insurance for English-speaking expatriates throughout Germany:
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