Public Health Insurance for employed expats in Germany

"Give the worker the right to work as long as he is healthy, provide him with care when he is sick, provide him with care when he is old". (Otto Von Bismarck)

It was over a century ago that Bismarck used these very words to announce the beginning of a new era of social security in Germany. Statutory health insurance, or what is commonly referred to as public health insurance, has been an integral part of the nation’s social security ever since and is an important cornerstone of the welfare state in Germany.

Three ways to gain membership

In the public health insurance system, there are three ways to gain membership:

#1 Mandatorily: all employees are automatically enrolled in the public health scheme unless they earn above the income threshold of €62,550 (gross) in a calendar year, in which case, they may instead elect to obtain private health insurance if they wish

#2 Voluntarily: these are employees who earn above the income salary threshold but wish to remain publicly insured

#3 Family insurance: applies if an individual is a dependent with no income or an income below €450 per month. In this instance, these individuals are not obliged to pay monthly contributions but are covered by their spouse or parent’s public health insurance plan

Nonetheless, approximately 90% of all German citizens are insured by the statutory health insurance system.

How are statutory health insurance contributions made

The premiums for both private and public health insurance are raised through contributions and in the public health insurance system, these contributions are determined by an individual’s income. For those who are employed, there is a general contribution rate of 14.6% of the individual’s gross income.

Certain public health insurance funds may also have an additional contribution rate depending on the fund’s own unique terms. In 2020, the additional contribution rate will be an average of 1.1% meaning that the total contribution rate (general contribution plus additional contribution) to statutory health insurance will be an average of 15.7% per year. This does not include long-term nurse care insurance which we address in more detail here [link]. According to German law, an employer pays half of this contribution whilst the employee pays the other half.

Statutory health insurance entitlements

Alongside the ‘principle of solidarity’ which supports the notion that all publicly insured individuals will receive equal benefits surrounding entitlements, it is mandated that public health insurance benefits must operate in a way that is sufficient, appropriate and economical. This is referred to as the "Efficiency Requirement".

The basis for statutory health insurance is outlined within The Fifth Book of the Social Code, SGB V. According to German law, insured persons can claim the following benefits under statutory health insurance:

  • Services for the promotion of health: including prevention and early detection of diseases
  • General medical treatment: this includes both medical and dental treatment, the supply of medicines, bandages, remedies and aids, domestic nursing care and home help, hospital treatment, medical and complementary services for rehabilitation, sickness benefit in the event that an individual is incapacitated and unable to work
  • Pregnancy: maternity medical care, midwifery assistance, in-patient childbirth, home care, farm relief and maternity allowance,
  • Family planning: Assistance and benefits in the event of illness-related sterilization and in the case of legally or medically indicated abortion.

Statutory health insurance providers (Krankenkasssen)

The 110 strong network of statutory health insurance carriers in Germany are public corporations that are self-governed. Some of them operate on a regional and whereas others operate on a national level.

Whether mandatorily or voluntarily enrolled in the statutory health system, individuals are free to choose the public health fund they wish to be insured by. No medical assessments are required in the public health system and by law, no fund can reject an individuals’s application unless the conditions for voluntary or compulsory insurance are not met.

Once insured by one of these providers, individuals are bound to that health insurance provider for at least 18 months. Termination of the agreement can only take place after this time and once a new fund has been selected. Publicly insured persons also have a special right to exit an agreement at an earlier stage if the aforementioned additional contribution is increased or when they opt for private health insurance.

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