Since January 1st, 2009, Germany made health insurance compulsory for everyone. Previously, public health insurance, together with the private health insurance standard tariff, was compulsory since April 2007. The obligation for certain groups of persons to have private health insurance in Germany came into force on January 1st, 2009.
These dates also serve as the time from when uninsured persons will be charged health insurance contributions for retrospectively. Due to it being compulsory, persons without health insurance coverage, and who can be assigned to private health insurance in Germany, must also except penalties owed for the uninsured period.
More than 40 private health insurance companies insure about 9 million persons privately in Germany. Private health insurance in Germany is comprehensive insurance with a number of advantages compared to public health insurance. Private health insurance can only be taken up by certain groups of people. Some qualifications apply which will determine if you can take up private health insurance or not.
- Overview of Private Health Insurance
- Private Health Insurance Requirements
- Change To Private Health Insurance or a Different Insurance Tariff
- Private health insurance cost
- Understanding The Difference of Basic Tariff
- Contribution relief tariffs in Private Health Insurance
- Exceptions To Remain or Change To Private Health Insurance
- Penalties for Persons Without Health Insurance
- Emergency Tariff in the Private Health Insurance
- Private Health Insurance Termination and Deadlines
- How to Assess if You Can Change to Private Health Insurance In Germany
- Frequently Asked Questions (FAQ) About Private Health Insurance
Overview of Private Health Insurance
The cost of private health insurance in Germany is not based on income, but dependent on age, occupation, state of health and the benefits included in the policy.
Advantages of private health insurance
- Faster appointments;
- Shorter waiting times;
- Access to the best physicians, facilities and treatments;
- Individual tariff and benefits; and
- Contributions are not dependent on income.
Disadvantages of Private Health Insurance
- Cost coverage dependent on tariff and contribution level;
- Families are generally not covered under one policy; and
- You cannot return to public health insurance when over 55 years of age.
Private Health Insurance Requirements
Although there are some exceptions to the requirements, the requirements for those who can join private health insurance in Germany are quite clear.
Self-employed persons and freelancers, students, and civil servants can freely join private health insurance without any further requirements. Employees on the other hand can only take up private health insurance if they meet the annual insurance limit.
The insurance limit is based on the annual gross income. It is a predetermined limit each year and generally increases depending on the market. The limit is also referred to as the “annual earning limit (JAEG)” and should not be confused with the contribution assessment limit.
Occupational Groups and Their Conditions for entering Private Health Insurance
Those who can get private health insurance can be divided into two groups. Those without any requirements and those who need to reach the income threshold (JAEG). Some exceptions apply.
|Compulsory insured employees||Income equal or above the compulsory insurance limit (for at least one year)|
|Voluntarily insurance employees||Income equal or above the compulsory insurance limit (for at least one year)|
|Self-employed and freelancers||No conditions for a change as the compulsory insurance limit does not apply to them|
|Students||No conditions for a change as the compulsory insurance limit does not apply to them|
|Gardeners, farmers artists and publicists||Even if self-employed the compulsory insurance limit needs to be reached|
|Doctors, dentists, pharmacists and veterinarians||If self-employed no conditions apply, if employees the compulsory insurance limit needs to be reached|
|Civil servants||No conditions apply and they are also eligible for state aid.|
Another option apart from public and private health insurance for artists and publicists is The Künstlersozialkasse (KSK). In this case, the government acts as an employer and covers half of the insurance contributions, but it is a longer process.
The Compulsory/Mandatory Insurance Limit
In principle, the compulsory insurance limit regulates public health insurance (GKV). It quantifies the maximum income limit for employees, and if reached, provides the freedom to choose private health insurance. This annual income limit does not apply to other occupational groups as mentioned above. These groups are free to choose either to enroll voluntarily in public health insurance or choose private health insurance.
Self-employed persons, freelancers, and civil servants can in most cases voluntarily be part of private health insurance or be a voluntary part of the public health insurance system. But since the private health insurance in Germany is not based on income, young and healthy persons are often better off with private health insurance both in terms of cost and benefits.
The Current Level Of Compulsory Insurance Limit
The compulsory insurance limit for private health insurance is based on the market, in principle, the main factor is the average wage and salary development. The limit has been increasing steadily each year and we’ve included the previous years as a representation of the annual increase. The monthly limit is the same as the annual threshold, divided by 12.
|Year||Annual Limit||Monthly Limit|
Shortened changeover period for employees
From February 2007, employees were only exempt from public health insurance if their annual income exceeded the compulsory insurance limit for three (3) consecutive years. So even if you reached the annual threshold, one could not take out private health insurance immediately. The regulation changed in January 2011 to a one-year changeover period.
The Difference between Assessment Ceiling and Compulsory Insurance Limit for Employees
The compulsory insurance (JAEG) limit is often interchanged and confused with the income assessment ceiling. These are however very different and it is important to distinguish the two.
Because public health insurance is based on income, the income assessment ceiling is the maximum contribution anyone would pay. Any income above this does not require further contributions.
The compulsory insurance limit, as explained in this section, is the income limit after which entry into private health insurance is possible for employees.
The Compulsory Insurance Limit Does not Apply to everyone
As indicated in the table above, students together with self-employed, freelancers, and civil servants do not conform to the compulsory insurance limit in order to take up private health insurance in Germany. Interns and persons in their secondary education are also exempt from this limit and can enter private health insurance.
Change To Private Health Insurance or a Different Insurance Tariff
If the conditions are met, a change within or a change to private health insurance can bring both advantages and savings. Among others, the benefits can be increased. However, it should be carefully considered. The current health insurance should be compared with the new one and the services you wish from a new health insurance policy such as additional services and contributions must be evaluated.
Some of the things that should be considered are:
- Personal needs;
- State of health including possible health risks;
- Cost savings (especially for self-employed, freelancers (tax-deductible) and civil servants (50% state aid); and
- Cost savings.
Anyone who meets the criteria can apply for private health insurance. It is also important to distinguish those changing tariffs within private health insurance and those that are changing from public to private health insurance.
Change from public health to private health insurance
More and more people change from public to private health insurance. In part because of the advantages of private health insurance in Germany brings compared to public insurance, and because it is less costly for healthy people.
Once you fulfill the criteria to apply for private health insurance, it is important to get quotes from different health insurance providers and consider your coverage needs carefully. Ideally, one should engage with a health insurance broker to get expert advice.
For persons who change from public to private health insurance, it is important not to cancel your existing public health insurance until you have found suitable private health insurance. Due to the obligation of having health insurance, the cancellation will only be legally binding if proof of new valid health insurance can be provided, latest by the last insurance day.
Private health insurance cost
There is no exact cost associated with private health insurance in Germany. Public health insurance is a fixed amount based on income, but private health insurance is based on age, health, and coverage amongst others. It is mainly individual factors that determine the total cost of private health insurance in Germany. The individual requirements and scope of services are customised and play a big part in the final cost.
Calculation of the base contribution
What can be considered as the base contribution, is the individual risk factor. This is important when new people join private health insurance:
- Your age;
- Health status;
- Professional group/occupation
- Additional risk premiums if applicable; and
- The services/coverage you want.
Tariff adjustments and additional services
In order to increase coverage and/or lower the premium, various additional considerations have to be taken in order to conclude the total cost of a private health insurance premium:
- Additional services to increase coverage;
- Increase or lower the deductible;
- Daily sickness allowances or subsidies;
- Special tariffs for certain occupations; and
- The insurers’ administrative costs.
Understanding The Difference of Basic Tariff
Since the health reform in 2009, where private health insurance became obligatory for certain groups of persons, the basic tariff was introduced for self-employed persons with low income. Together with previously non-insured persons, the basic tariff was aimed to provide the same services and coverage as public health insurance.
The basic tariff is a successor of the previously known “standard tariff”, which was offered from 1994 to 2008 – until the health reform and basic tariff was introduced. Although old members of the standard tariff remained, access to the standard tariff is no longer possible since its replacement of the basic tariff.
The basic tariff is open to everyone up to the age of 55 without a prior health examination. This means that providers are obliged to offer basic tariff (coverage). There is however one main difference from the basic tariff within the private health insurance; Doctors usually charge 2.3 times the fee rate for privately insured persons. However, since 1.7 times the rate is due for the basic tariff, the “preferential treatment” of privately insured persons does therefor not apply to persons under the basic tariff.
For various reasons, the basic tariff is often overpriced compared to the basic coverage it provides. Because of this newcomers are often better off with normal private health insurance.
Basic Tariff Contributions and Benefits
The contribution rate to the basic tariff for adults over 21 years of age, is the maximum rate of 682.95 EUR and independent of age and state of health. For children and persons below 21, the rate is limited to about half. The rate can also be reduced if the person is in need of financial help.
Although the basic tariff offers the same level of coverage as public health insurance, the cost is too high compared. When comparing to the public health insurance, the basic tariff contributions due would be equal to the assessment ceiling (maximum payable), of the public insurance, regardless of income.
Another important difference between the basic tariff and normal private health insurance is that private insurers are obliged by law to offer basic tariff. They can also not refuse anyone based on pre-existing health conditions and corresponding surcharged are not allowed.
Persons insured under the basic tariff can also switch to a new basic tariff and switch to other providers while also be able to take their retirement reserves with them.
Since no health checks is required, private health insurance companies increase their risks substantially. In order for it to remain finically viable, the financial burden of offering the basic tariff is shred among the private health insurance companies.
The difference in coverage between basic tariff and full insurance tariff
While the basic tariff offers the same coverage as the public health insurance (at a higher cost), there are substantial benefits by having a full insurance tariff (regular private health insurance). Not only will the price be a lot less (as long as you are healthy and accepted by the insurance company) but also in terms of coverage. They often include the entire risk of illness and generally cover:
- Dental treatment;
- Daily sickness allowance; and
- Hospital daily allowance.
In principle, fully insured under private health insurance, persons will have a free choice of doctors and hospitals and often include other treatments such as psychotherapists and natural treatments.
Contribution relief tariffs in Private Health Insurance
Because private health insurance contributions can rise, and based on age amongst others, contributions relief tariffs are offered by private health insurance companies. Such age-related premium increases can be avoided by a so-called premium relief tariff.
The contribution relief tariff is a premium payable in addition to the regulated health insurance premium. It can be between 10 and 100 euros extra per month depending on your age when entering private health insurance. The regular heart insurance contributions will then be reduced fro the age of 65 (or something 55).
The Constant Contribution Relief
This type of tariff is paid as a fixed amount. However, the consequences of inflation and other cost increases are not taken into account.
The Dynamic Contribution Relief
The monthly contributions are determined by the customer and it increases at fixed annual intervals. This method compensates for the effects of inflation and the costs of premium increases.
Tax Deductions and Loss of Contribution Relief
One must carefully consider if and how much contribution relief should be paid. The contribution relief tariffs can be tax-deductible for self-employed persons of up to 80%. However, the money invested in the age reserve is lost if the insured person becomes compulsory to take out public health insurance.
Exceptions To Remain or Change To Private Health Insurance
Although private health insurance in Germany has requirements, there are certain exceptions which will allow persons to remain privately insured although they don’t qualify anymore. Equally in the case of publicly insured persons, the exceptions allow for a change to private health insurance.
The following situations provide an exemption from public health insurance and offer an opportunity to remain or change to private health insurance:
- If the salary increases above the compulsory insurance limit and qualifies for private health insurance per usual;
- If you er in receipt of unemployment benefits and have at least 5 years of previous private health insurance;
- If you are in receipt of maintenance allowance have had at least 5 years of previous private health insurance;
- If you are in part-time employment and receiving child allowance or parental allowance. The exemption only applies during parental leave;
- If you have a reduction in working hours due to the care of relatives. The exemption only applies during the care period and follow up care phase;
- The transition period when starting a new job;
- The period after parental leave, care of family care leave where the part-time position would not result in compulsory insurance if it were full-time. This applies only if the previous income has been above the compulsory insurance limit for at least 5 years;
- For the application or receipt of a pension;
- Starting studies or internship; and
- If you are working in a facility for disabled persons.
An application for exemption of compulsory public health insurance must be submitted to the health insurance company within 3-months of the start of compulsory insurance. The change is only possible as long as you have not received any benefits from the fund during this 3-month period. If any benefits have been claimed during this time, the exemption takes the effect following month.
Exemptions are irrevocable and can only be granted if another valid health insurance can be provided.
Penalties for Persons Without Health Insurance
The obligation to have health insurance in Germany has been in place since 1st April 2007 for public health insurance, and since 1st January 2009 for private health insurance. Uninsured persons risk facing retroactive claims for the period they were uninsured.
The missing contributions are collated retroactively from the time of the missing insurance. So in this regard, the regulation is therefor milder for private health insurance as it only dates back to 2009.
Penalty Amounts Due
|Uninsured Period||Penalty Due|
|1st February 2009 – 30th April 2009||A monthly fee (maximum 639.38 EUR) for each month without insurance cover|
|From 1st May 2009||One sixth of the monthly fee for each additional month (a maximum of 14 monthly fees apply)|
|If the uninsured period cannot be determined or is very long||A maximum of y years of uninsured time is taken as a basis (maximum of 14 monthly contributions|
Cancellation of Retroactive Debts Via The Contributions Debt Act
Persons without health insurance coverage are often discouraged to regularise their position due to the retroactive claims. This can often amount to large sums and put already vulnerable persons in a worse position.
The Contribution Debt Act was introduced on 1st August 2013 and aimed to relieve the uninsured. The act erases the debt owed if persons got their health insurance between August and December 2013. However, the regular penalties must be paid retrospectively from December 2013 and onwards again.
Emergency Tariff in the Private Health Insurance
Since August 2013 a new tariff was introduced to private health insurance in Germany. This emergency tariff was designed to protect consumers who no longer can pay their private health insurance contributions.
The emergency tariff covers persons only for the treatment of acute pain and illnesses. All necessary treatments and preventative examinations are included. Childbirth and maternity benefits are also covered.
Children in the emergency tariff are covered additional through important orthodontic and dental treatments, recommended vaccinations, remedies for acute pain, and preventative examinations.
A transfer to the emergency tariff can also apply retrospectively from when the private health insurance was suspended and can be resumed again after the contributions due are paid. Retirement provisions are not built up under this tariff.
The cost of emergency tariff is generally 100 EUR.
Private Health Insurance Termination and Deadlines
Private health insurance can be terminated at the end of each calendar year or depending on the start of the insurance, at the end of the insurance year. There is a notice period of three months and it is important to note the minimum insurance period. Usually, this is from one to three years. Furthermore, before terminating one must ensure to have complete health insurance coverage even within gaps of changing insurance.
The following conditions apply when terminating a private health insurance:
- Normal termination in line with the minimum insurance term and notice period;
- Extraordinary upon entering the public health insurance system/compulsory insurance;
- Extraordinary upon entering family insurance within the public health insurance;
- Extraordinary if you are entitled to medical care; and
- Extraordinary in case of a change in benefits or an increase in premium.
Termination due to premium increase
A change in premium or benefits provides the right to cancel your private health insurance. The cancellation must be received within two months before the new premium comes into force or within two months when the tariff changes became known. The termination will only come into effect if proof of new health insurance is provided within the same period.
Alternatively to cancellation is to change tariff or optimise your current tariff with the same private health insurance provider.
Termination in the event of a breach of contract
Private health insurance in Germany can be terminated in the event of a grossly negligent breach of duty was made by the insured person. The main reason for this breach is often the concealment of pre-existing health conditions during the health check.
In this case, the private insurance company can terminate the contract without notice within one month.
Non-payment can not be considered as a breach of contract. Since the introduction of compulsory insurance in 2009 (for private insurance), an emergency tariff comes into force, as described above.
Termination when falling below the compulsory insurance limit
In case privately insured employees who fall below the compulsory insurance limit, it becomes compulsory to take out public health insurance. The termination in this case must be given within a maximum of three months after the start of public health insurance. A further one-month notice (the remainder of the month) applies if this period is missed.
Proof of public health insurance must be provided within two months to the private health insurance provider in order for the termination to take legal effect.
Termination when Entering public family insurance
Extraordinary termination is also possible when private insured persons can be covered under public family health insurance. The normal notice period applies here.
Termination When entitled to medical care
Extraordinary termination may also apply in the case where the insured person is entitled to medical care.
How to Assess if You Can Change to Private Health Insurance In Germany
Although there are a lot of things to consider such as thresholds, exceptions, changeover period, and more, the following steps will help you to check if you can and make the change to private health insurance in the first place and ask the right questions to understand if it will be beneficial to change.
- Check the current compulsory insurance limit
Employees must check if their gross annual salary above the current income limit. The income limit must have been exceeded for at least one (1) year.
- The calculation of the annual income
It is important to note which income benefits are used for the compulsory insurance limit calculation. These are monthly wages and salary payments, recurring one-time payments, benefits in kind, capital accumulation benefits, flat-rate overtime payments, and pay from secondary jobs subject to compulsory insurance.
- Current life situation must be beneficial
Certain things must be considered before understanding if a change to private health insurance is beneficial: The family insurance is regulated differently for private health insurances in Germany – thus additional policies may apply to cover families, unemployed partner may increase the financial burden, civil servants benefit from 50% coverage of their private health insurance premium by the government.
- Your health condition
Private health insurance companies require a health check to be carried out. This risk assessment affects the premium and coverage. For example previous health conditions are not covered or require a surcharge. In worse case private health insurance companies can refuse to insure you in case of serious chronic illnesses.
The actual change to private health insurance is a rather simple and generally quick process. A change should be done with the following steps:
- Consider the level of coverage, compare and find a health insurance provider
- Carry out the health check
- Fill out the necessary application form from the insurance company and submit documentation.
- Receive the receipt of confirmation and admission into the private health insurance
- Terminate the public health insurance within the notice period timeframes.
Frequently Asked Questions (FAQ) About Private Health Insurance
The compulsory health insurance limit is adjusted each year by the federal government. The change is mainly based on the gross wages per average employee from one calendar year to the next.
Generally, it is possible to change to private health insurance up to 55 years of age. Persons over this age are exempt from insurance and thus a change is legally possible. However since age is an important factor in determining the premium cost for private health insurance companies, it is generally expensive to enter at an older age.
In principle, employees can switch to private health insurance once they reach the threshold within the changeover period of one (1) year and based on the termination of your current health insurance.
Especially considering the compulsory insurance limit increases each year, employees may fall below the threshold. In that case, it will become compulsory to enter back into the public health insurance system. It is important to note that there are exceptions that may apply and the limit is based on annual wage increases in general.
Once the insurance has been signed and came into effect, the private health insurance will cover you for illnesses according to your policy coverage. However, if the health assessment was not completely truthfully if its reason enough to terminate the contract or charge risk surcharges.