Key takeaways
- Employees are eligible for employer subsidy if their private health insurance fulfills the requirements per §257 para. 2a SGB V.
- The employer contributes 8.15% of your gross monthly salary to private health insurance. However, as of 2024, the employer subsidy is capped at 422 €.
- The employer also contributes to long-term nursing care insurance. The amount is 1.7% of your gross monthly salary, and it is capped at 88 €.
- The employer subsidy depends on your gross income. The subsidy doesn’t depend on your private health insurance cost. So if you earn 4000 € monthly gross, the employee contribution to health insurance is 326 € (8.15% of 4000)
- The employer subsidy is tax-free.
This is how you do it
- Get the employer certificate (Arbeitgebersbescheinigung) from your private health insurer. You must submit this certificate to the employer to get the employer subsidy. The certificate is the proof that you have valid private health insurance.
- Taking high deductibles to reduce insurance costs is not beneficial for employees. It’s because the employer doesn’t contribute to the deductible.
- You can use our “Health Insurance Finder” tool to check which health insurance (Public or Private) makes sense and when.
- Consult a fee-based advisor or an insurance broker before choosing between private or public health insurance.
- In our comparison and test, we found Haellesche and Signal Iduna’s private health insurance plans to be the best.
Table of contents
Who is entitled to the employer subsidy on private health insurance premiums?
Every employee in Germany is eligible for employer subsidy as long as their private health insurance fulfills the requirements per §257 para. 2a SGB V.
In other words, you must have a fully-fledged private health insurance policy to get a subsidy from the employer. Employers don’t contribute to your supplementary health insurance policies.
How much does the employer pay for your private health insurance in Germany?
The employer’s contributions to the private health insurance premium depend on two factors.
- Your salary
- Contribution assessment limit in public health insurance set by the German government
The employer pays half of the public health insurance contribution of their employees. The same applies to privately insured employees.
But like in statutory insurance, the employer contribution to private insurance is capped to the maximum contribution assessment limit. Hence, the employer’s maximum contribution is the same for private and statutory health insurance.
The contribution assessment limit is 5,175 € per month as of 2024. And it refers to your gross monthly salary.
Here is how much the employer pays in your private health insurance plan.
- Half of the basic contribution, i.e., 7.3% (14.6% / 2).
- Half of the average additional contribution, i.e., 0.85% (1.7% / 2) as of 2024
- Half of the nursing-care insurance contribution, i.e., 1.7% (3.4% / 2)
So, the total employer contribution to the German health insurance system is 7.3 + 0.85 + 1.7 = 9.85%. And the maximum employer contribution is 422 € (8.15% of 5175 €) plus 88€ (1.7% of 5175) as of 2024.
NOTE: The employer contribution is 9.85% of your gross monthly salary or contribution assessment limit, whichever is lower.
The table below shows sample calculations of your and your employer’s contributions to the private health insurance premium.
| Monthly gross salary | 6,000 € | 4,000 € |
|---|---|---|
| Monthly insurance premium | 900 € | 900 € |
| Employer contribution for private health insurance (14.6% + 1.7%) / 2 | 421.7 € (8,15 % of 5,175 €) | 326 € (8,15 % of 4000 €) |
| Employer subsidy for nursing care insurance (3.4% / 2) | 88 € (1,70 % of 5,175 €) | 68 (1,70 % of 4000 €) |
| Total employer share (9.85% of your gross monthly salary or contribution assessment limit, whichever is lower) | 9,85 % of 5,175 € (As your gross salary is higher than the contribution assessment limit) | 9,85 % of 4000 € (As your gross salary is lower than the contribution assessment limit) |
| Employer share | 509.7 € | 394 € |
| Your share | 390.3 € (900 € – 509.7 €) Your monthly health insurance premium is lower than the statutory one, so you save around 118 € per month. | 506 € (900 € – 394 €) Private health insurance premiums don’t depend on your salary. But the employer contribution does. Hence, you pay more private health insurance premiums than public ones. |
The employer’s contribution to the health insurance premiums is tax-free.
Do German employers pay for employees’ long-term care insurance?
Yes, employers must contribute half of the long-term nursing care insurance cost. The statutory nursing care insurance is 3.4% of your gross monthly salary.
Thus, the employer must contribute 1.7% (3.4% / 2) of your gross monthly salary to long-term care insurance.
NOTE: The employer contribution is capped at the maximum contribution assessment limit, i.e., 5,175 € as of 2024.
This means that the maximum employer contribution to nursing care insurance is 88 € (1.7% of 5175 €). If you earn less than 5175 €, the employer contribution will also be less.
What is the maximum employer contribution to private health insurance in Germany?
The employer contribution to private insurance is capped to the contribution assessment limit. And the contribution assessment limit is 5,175 € per month as of 2024.
Thus, the maximum employee subsidy you can get is:
| Employer contribution 2024 (monthly) | Employer contribution 2023 (monthly) | |
|---|---|---|
| Private health insurance | 421.76 € (8.15 % of 5,175) | 403.99 € (8.15 % of 4,987.50) |
| Long-term nursing care insurance | 87.98 € (1.7 % of 5,175) | 84.79 € (8.15 % of 4,987.50) |
| Total | 509.74 € | 488.78 € |
You can use our “Health Insurance Finder” tool to check which health insurance (Public or Private) makes sense and when. We recommend getting advice from a fee-based advisor or health insurance broker before deciding.
Insurance brokers and advisors are liable for their advice. This means that if the insurance plan they recommended doesn’t fulfill your wishes, they are liable to pay the damages.
Insurance brokers offer free advice. The insurance company pays them upon the successful conclusion of the contract.
An insurance broker can also help you file a claim with the provider. The broker we recommend has been offering services to expats for more than a decade.
Employer contribution to family insurance
Publicly insured people can insure their non-working family members for free in family insurance. But that’s not the case in private health insurance.
You must get a separate health insurance plan (public or private) for each family member.
However, family members of privately insured people receive employer subsidies in the following situation.
- Your family member would have been insured for free in the public health system (Section 257 Paragraph 2a SGB V).
- You haven’t fully used the maximum employer subsidy. For example, you earn less than the contribution assessment limit, you are on parental leave, or your private insurance premium is less.
- Your family member is also part of the private health insurance system.
Example: In the table above, you received 326 € in employer subsidy if you earned a gross of 4000 €. However, the maximum employer subsidy you can get is around 422 €. Thus, in this case, your family member can get a maximum subsidy of 96 € (422 – 326) from your employer.
Employer contribution to private health insurance for low-income individuals
Employer contribution to the private health insurance scheme depends on your monthly gross income. Thus, the employer subsidy decreases if you earn less than the contribution assessment limit.
For example, you earn 4,000 € gross per month. Your contributions to private health insurance is 900 € per month.
In this case, your employer doesn’t pay half the insurance premium (450 €) or the maximum subsidy (422 €). The employer will pay 326 € (8.15% of 4000 €) only.
4 things employees must know to get maximum employer subsidy for private health insurance
You must consider the following to maximize the employer’s subsidy for private health insurance.
Employer certificate (Arbeitgeberbescheinigung) from your health insurance provider
You must provide proof to your employer that you have German private health insurance. As proof, you can show the employer certificate (Arbeitgeberbescheinigung in German) you received from your health insurer.
The employer certificate mentions the following.
- You have a health insurance contract with a private health insurance company.
- You are eligible for the employer subsidy.
- Your monthly and annual contributions to the health insurance fund.
Deductible
Deductible is the amount you pay on your own. And the insurer covers the rest.
Suppose you opt for a deductible when signing a private health insurance policy. Your employer will not contribute to the deductible.
And if your employer contributes to the deductible, the tax office considers it a monetary benefit. Hence, you are liable to pay tax on it.
Thus, having a high deductible to reduce private health insurance costs is not beneficial for employees. There are other ways to reduce private insurance costs in Germany, such as switching to a cheaper health insurance tariff.
Private health insurance premium refunds
Many private health insurance companies offer premium refunds if you don’t claim any health insurance benefits in a certain period. The best part is that a premium refund doesn’t affect your employer’s contributions.
Thus, a high premium refund can help you save even more on a private health insurance policy.
NOTE: You should never skip necessary health checkups for a premium refund.
Times when you don’t receive employer subsidy
There are times when you don’t receive an employer subsidy. For example, you are on parental leave, receive daily sick pay, etc.
During these times, you must pay the full private health insurance premium yourself. However, you should check if your family members are eligible for a subsidy from your employer.
How do you find the best private health insurance in Germany?
Before you get private health insurance, you should do the following.
- Understand the pros and cons of private health insurance.
- Compare private and public health insurance to make an informed decision.
- Consult a fee-based advisor or an insurance broker for personalized advice.
- Know about the essential services private health insurance should cover.
After your research, you discovered private insurance is the best for you. Then, get in touch with an insurance broker or fee based advisor.
You can contact an insurance broker we recommend for free here.
FAQ
When does the employer not pay private health insurance subsidies?
In the following situations, you don’t get employer subsidies for private health insurance.
- You are receiving sick pay.
- You are receiving parental or maternity benefits.
- You are on parental leave.
Is there an employee subsidy for privately insured part-time employees?
Yes, part-time employees with private health insurance also receive the employer subsidy. But the subsidy is capped to the contribution assessment limit, i.e., 5,175 € per month (as of 2024).
The monthly employer contribution to a private health insurance plan is 8.15% (as of 2024) of your monthly gross income.
Is employer contribution to the health insurance companies tax-free?
Yes, the employer’s contribution to the private health insurance is tax-free.
References
- https://www.allianz.de/gesundheit/private-krankenversicherung/arbeitgeberzuschuss/
- https://www.privat-patienten.de/verbraucher/arbeitgeberzuschuss-private-krankenversicherung/
- https://www.handelsblatt.com/vergleich/pkv-arbeitgeberzuschuss/
- https://www.gesetze-im-internet.de/sgb_5/__257.html
- https://www.finanztip.de/pkv/arbeitgeberzuschuss-pkv/
