Health insurance for freelancers in Germany

Health insurance for freelancers in Germany is compulsory! Every person who comes to Germany to live and work (also as a freelancer) must have health insurance. It is as simple as that.

The requirements of Health insurance for visas and residence permits

Unfortunately you can’t just take any health insurance that you might have bought as part of your travel insurance package. German law lays down very specific requirements. The insurance company has to be registered with the Federal German banking authorities (BaFin) for the policies to be acceptable. The policies must fulfil the requirements of German law.
This can become an issue when applying for a visa to come and work in Germany. And once you are here, it’s also the case when trying to obtain a residence permit. An APPROVED health insurance policy is one of the documents you must produce. Many of the Foreigners’ departments are now no longer accepting ANY international health insurance policies from outside Germany.

Before I look specifically at the possibilities for freelancers, I want to give an overview of the way health insurance works in Germany. This is important in order to understand where your choices are and to help you make a good decision.

How does health insurance work in Germany?

There are 2 different modes of health insurance: Public health insurance (“Gesetzliche Krankenversicherung”) and Private health insurance (“Private Krankenversicherung”).

Public insurance

Around 85% of the German population has public insurance. It works on the SOLIDARITY Principle. This means that:

• Everyone pays the same percentage of their income for health insurance.
• Employers and employees share the costs of health insurance.
• There is no risk assessment done for new members when joining.
• The state regulates the public insurance companies.
• The scope of the medical services provided is determined by the state. (This means that the services offered by all companies are basically the same).
• Public insurance includes family members of an insured person – spouse and children – for free.
• You can move to a different public health insurance scheme if you wish. There is a termination period of 2 months (after being a member for 18 months).
• The percentage (in 2016: 14.6%) charged is the same for all public insurance companies. (There is one exception here as they may charge an additional surcharge if they wish. This was around 1.1% on average for 2016)
• The public insurance companies pay the doctors directly.

Public insurance is compulsory for certain groups of people:

• Employees (under a threshold income of EURO 4,687 per month in 2016)
• Pensioners
• Recipients of state social welfare benefits
• Artists or journalists registered with the Artists Social Scheme (“Künstlersozialkasse”).

Private Insurance

The remaining 15% of the population has private insurance. It works on the RISK principle. This means that:

• The fees vary for each individual insurance holder based on his individual risk factors. Thus a young person is a better risk than someone older, for example.
• The scope of the services offered will generally be better than what public insurance schemes offer to their members. There is strong competition amongst the private companies.
• Members can decide for themselves what elements of health insurance are important for them and choose their tariff accordingly.
• For employees, the health insurance costs are shared with the employer (up to a limit).
• The waiting times to see a doctor will often be significantly less for privately insured patients. Private patients are more lucrative for the doctors.
• As a private patient, you must pay the doctor yourself first. The insurance company will then reimburse you.

Private insurance is also compulsory for certain groups:

• Employees earning more than the threshold of EURO 4,687 per month in 2016.
• Civil servants
• Self-employed people or freelancers

Public Insurance – on a voluntary basis

In certain situations you may be a member in a public insurance scheme on a voluntary basis. This is the case, for example, if you were already a member and then earned over the threshold limit. Normally you would move to a private insurance company. You can, if you so wish, opt to stay in the Public insurance scheme (with all the benefits that entails). The premium is then capped as a percentage of the threshold limit.

Should you choose Public or Private Insurance?

The first question you must answer is: do I have a choice?

Joining a public insurance scheme

• If you are being employed in Germany for the first time, then you may join a public insurance scheme.
• Likewise, the same applies if you earn under the threshold of EURO 4,687 per month (for 2016). This is the case any time that you are employed and earn under the threshold limit.
• If you have come to Germany from an EU country that has a similar public insurance health scheme (such as the National Health Service in the UK, for example), then you may join the public insurance scheme in Germany. This is dependent upon you producing documentation that this is the case. If you are a freelancer or self-employed, this can also apply to you – provided you apply within 3 months of arriving in Germany.

Joining a private insurance company

• As an employee earning over the threshold of EURO 4,687 per month (for 2016) you may join a private insurance company.
• As a freelancer or self-employed you have no option other than to join a private insurance company. (Except as described above).

Since the tariffs for private health insurance are risk based, young people joining the companies will pay relatively low premiums – in many cases lower than if they were in the public insurance scheme.

It is important to realise 4 things:

1. The costs for private insurance do not change depending on how much – or little – you earn. The insurance companies can increase their charges year for year as the overall cost of medical services increase.
2. As a young single person without a family, it can be an attractive option. However, if you have a family, then every single person must have their own health insurance policy. This can be very costly.
3. It is extremely difficult – in many cases impossible – to leave a private insurance company and join a public health insurance company. The state has made it difficult to switch from one to the other. This ensures that the solidarity principle is maintained. People cannot benefit from lower premiums earlier in life and then take advantage of cheaper premiums and more medical services as they become older and less healthy.
4. There is no doubt that you have better medical options as a private patient. However, the standard of care generally in Germany is high. As a public health insurance patient you will also receive adequate treatment.

How to find a health insurance company

Finding a public insurance company

Around 95% of the medical services provided by the public insurance companies are the same. What they MUST provide is defined by the state. However, there are also some additional services, for example fitness courses, which the individual schemes offer.

There are a number of large public insurance companies. The regional AOK companies have a total of over 18 million members or the Techniker Krankenkasse (TK) has around 10 million. These are good places to start when looking to join a public insurance company.

Finding a private insurance company

Finding the right private insurance company is more difficult. Different factors can play a role in the pricing – age, health risks and the services on offer. It is therefore important to check your options. The best way to do this is by using an independent insurance advisor or broker.

An independent broker will review your position and with the help of analytical software review the different offerings. The insurance companies generally pay the brokers a commission which means there is no cost for you. Insurance Brokers (“Versicherungsmakler”) and Insurance Advisors (“Versicherungsberater”) must be registered with the Chamber of Commerce (“IHK”). You should check for this before using them.

Final Remarks on Health Insurance for freelancers in Germany

I have given you an overview of health insurance for freelancers in Germany and how it applies to you. I am not an Insurance Advisor, however, and it is a complex subject. Your individual situation can be different from that of everybody else. You should therefore check whether your proposed health insurance policy is adequate with the relevant authorities (for example, when applying for a residence permit).

It is not an option to do without health insurance in Germany. If you are planning to stay longer in Germany, then it is important that you understand the consequences of the different types.

Photo credit: flickr photo shared by NIHClinicalCenter under a Creative Commons ( BY ) license