Health Insurance in Germany

You might also find our other country guides to working abroad as a contractor useful too:

If you would like to discuss contracting working abroad or have questions about tax please call Freephone 0500 152500 / 01442 275789, email: antony.edwards@internationalumbrella.com or visit our website here: International Umbrella.

How to cover your medical expenses in Germany

Your first priority when coming to Germany should be health insurance. Medication, doctors and hospitals are extremely expensive, so you must make sure that you are covered for sickness and emergencies.

In addition, you will usually not get a residency permit without proof of adequate insurance. Health insurance is also mandatory for all employees and students in Germany, so you will not be able to start working or studying without it.

In 2007, there were some 200.000 persons living in Germany without health insurance coverage. With the health insurance reform of 2007, the German government has now implemented a new insurance law which makes insurance mandatory for everybody living in Germany. When living in Germany, this law will also apply to you.

There is an EU agreement which guarantees free medical treatment for EU citizens in Germany. Since the 1st June 2004, European citizens who are travelling within the European Economic Area are given a European Health Insurance Card, which simplifies the procedure when receiving medical assistance during their stay in a Member State. The European Health Insurance Card replaces forms E111 and E111B, E110, E128 and E119. However, if you wish to take up long-term residence in Germany you must exchange the card for a local health insurance scheme.

Health insurance contributions are split 50-50 between employers and employees, independent on whether you opt for a statutory or private insurance scheme. Students are offered special student insurance schemes with favourable rates. Note that health insurance in Germany is part of the social security system.

Statutory and private health insurance in Germany

In Germany, there are two parallel health insurance systems:
(a) State health insurance is run by German government. Most foreigners (and Germans as well) are obliged to take out state health insurance.
(b) Private health insurance can be chosen in some specific cases. It generally offers more extensive cover, but is not automatically an advantage for all cases.

Almost everyone can join the state insurance scheme, but only a few people are allowed to leave this system for private insurance. To work out which insurance scheme fits is best for you, follow these steps:
(a) Find out whether you can choose between private and public insurance. If you're obliged to join the state system, it is irrelevant to compare it with private insurance. To find out whether the state system is mandatory for you, have a look at our information below.
(b) If you are allowed to take private health insurance, you should compare the advantages and disadvantages of both systems before making a final decision.

Although this is complicated, take the time to analyze your situation in order to make the right decision. Our health insurance guide will lead you step by step through this decision process.

When is state health insurance mandatory?

As of 2007, state health insurance was compulsory for the following groups:

  • Employees whose regular income before deductions does exceed €400 per month and remains below a set annual limit. In 2006, the general annual gross income limit for mandatory state insurance was €47.250.
  • Students at state and state-approved universities.
  • People on work experience (internships) or in secondary education.
  • Old-age pensioners who have been in a statutory health insurance scheme or insured as a family member for most of the latter half of their working life.
  • Unemployed people receiving benefits from Federal Employment Services (with some exceptions).

You can within a period of three months join a state health insurance scheme voluntarily if you:

  • Have been a compulsory member, your membership is terminated and you have certain qualifying insurance periods.
  • Are an employee and your income in your first job exceeds the limit, as long as you apply for membership within three months of starting work.
  • Are severely disabled (subject to certain other requirements).
  • Have been insured through a family member for a specific minimum period and this insurance has expired.

Students from countries with which Germany has concluded a social security agreement that includes an insurance clause can continue to be covered by their home insurance company while they are in Germany. For further information, enquire at your institution's International Office. In such cases, you will be required to present proof of insurance cover to the health insurance company in Germany.

The Federal Ministry for Health and Social Security offers detailed information on statutory insurance in different languages at www.bmg.bund.de

Who can opt for private health insurance?

In theory, everybody not in the categories above can choose a private insurance scheme. However, once you've opted out of the state insurance scheme, it can be very difficult to go back. Before you make this decision, you should therefore carefully compare the advantages and disadvantages of the two systems.

If you opt out of statutory health insurance and cannot go back, the private insurance companies will be forced to offer you a basic tariff with the same fees as the statutory insurance from 2009.

What are the advantages/disadvantages of the two systems?

There is no simple answer to this question, as it depends heavily on your personal circumstances. To help, we have listed below some of the advantages and disadvantages:
Contributions: To understand the main differences between the two systems, you should bear in mind that state and private insurance work on completely different contribution models:

  • State health insurance contributions are based on your gross income (around 14% with an income cap). If you have a high income, it might therefore be cheaper to opt for a private insurance policy. Students can use a special insurance scheme that offers favourable rates.
  • Private health insurance contributions are based on your risk profile, not on your income. For example, women and older people generally pay higher contributions than young men. This is due to a calculation of the average cost for medical treatment for different groups. The older you are, the less attractive it thus becomes to opt for a private insurance.

Note that contributions are always equally split between employer and employee, independent of whether you are in a private or public scheme.

Payment of medicines and treatments: If you're insured through the state system, you only pay a nominal fee for treatments and medicines as these are directly paid for by your insurance company. If privately insured, you pay doctor's fees and medicine costs and send receipts to your insurance company for reimbursement. Although this makes no difference in the long run, it might be important if you're short on cash.

Private health insurances: Private health insurance schemes provide more extensive cover, including the option of private/semi-private hospitals, alternative therapies such as acupuncture and herbal treatments, glasses and contact lenses and other treatment that may not be available under the state scheme. In recent years, some statutory insurance companies have also extended their coverage of alternative treatments, but it’s still not as wide as the coverage of private insurances.

At the doctors, you will often be treated preferentially compared to state insured patients, as you are generally more profitable. Some doctors even restrict their practices only to private patients. Another advantage is that private insurances don't expect you to pay any additional co-payments (Zusatzzahlungen) for medicines and treatment as in the state scheme (see below for more information).

However, some private insurance policies offer you the option of a Selbstbehalt, which means that for each case of illness part of the cost is paid by you up to a certain amount per year. On the upside, the insurance company will lower your contributions if you go for this option.

Statutory insurance: Despite the constant complaints of Germans, the state health insurance scheme also offers some advantage compared to private schemes. The biggest one is that it also insures your family at no extra charge! Your spouse or civil partner and, up to a certain age, your children are covered by your insurance, provided among other things that their collective income does not exceed €345 a month and they do not have their own insurance.

However, you should bear in mind that the state insurance system has come under serious pressure during the last decade. As the government tries to cut the cost of health care, co-payment (i.e. the portion of costs the patient has to pay himself) has been increasing for all kinds of medical treatment and medicines and is likely to increase even further in the future. In areas such as dental/orthodontic treatment and glasses, state health insurance only covers a fraction of the cost.

The state health insurance system

Statutory health insurance is provided by a network of non-profit making companies working with the state to administer the national health program (Gesetzliche Krankenkassen). Some of the most popular ones include the TK, AOK and BEK. Since 1996, anyone is free to choose the fund they wish to be insured with. Even though benefits are similar across all companies, it is often worth comparing contributions since these can vary significantly.

Your insurance company will issue you a health insurance card, which you have to take with you whenever you visit a doctor, dentist or specialist.

Note that benefits of statutory health insurance change often. Some of the treatments covered are (as of 2007):

  • Medical and dental treatment, with free choice of doctors and dentists.
  • Hospital treatment.
  • Drugs, dressings, complementary treatment and aids such as hearing aids and wheelchairs.
  • Sickness benefit (Krankengeld): Normally, your employer will continue to pay your wage or salary for six weeks if you are unable to work. After that your health insurance would pay 70 percent of your regular wage or salary before deductions for a maximum of 78 weeks.
  • Measures for the prevention and early detection of certain diseases.
  • Preventive dentistry and in particular individual and group prophylactic measures.
  • Preventive inoculations, excluding inoculations for non-work-related foreign travel.
  • Orthodontic treatment, normally only up to the age of 18.
  • Medically necessary dentures and crowns.

If you have children, you can claim a range of additional benefits. The Federal Ministry for Health and Social Security offers detailed and up-to-date information on benefits at www.bmg.bund.de.

In the following cases, you will have to an additional contribution to treatments and medicines (as of 2007):

  • The cost of dentures (50% of medically required treatment).
  • A share in the cost of in-patient preventive treatment and rehabilitation, out-patient rehabilitation, and in-patient hospital care (€10/day for a maximum of 28 days).
  • 10% of the cost of prescription drugs and dressings, minimum €5 and maximum €10.

If your income is below a certain level, you can be exempted from these additional payments.

If you have any questions about Contracting or would like any further advice please call our International team on Freephone 0500 152500 / 01442 275789 or email Antony Edwards: antony.edwards@internationalumbrella.com.

About International Umbrella

International Umbrella, previously know as SJD International, has the skills and experience to support contractors working abroad ensuring they operate in a compliant and tax efficient way.

Contracting abroad can bring many rewards but it also carries extra responsibilities and challenges with regards to tax and in-country compliance. Few companies offer support to British and non-British contractors working overseas. However, International Umbrella has the skills and experience to support contractors working abroad ensuring they operate in a compliant and tax efficient way.

If you would like to discuss contracting abroad or have questions about tax please call Freephone 0500 152500 / 01442 275789 or email: antony.edwards@internationalumbrella.com.

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We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy has more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATT, AAT, CTA, ACCA, CA, ACA and FCCA.

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