Health Insurance for Self-Employed in Germany

Since April 2017, health insurance in Germany has been mandatory for everyone, including the self-employed. The 2009 health insurance reform made it compulsory for all individuals to have health coverage.

Options for Self-Employed Individuals

Self-employed persons and freelancers in Germany have the option to either voluntarily join public health insurance or opt for private health insurance. This choice requires careful consideration, as the two systems operate quite differently.

Public Health Insurance for Self-Employed

Public health insurance premiums are based on income, set at a rate of 14.6%, with an additional contribution rate averaging 1.6% for 2023. Under certain conditions, a reduced contribution rate of 14% may apply.

Disadvantages of Public Health Insurance for Self-Employed

While individual situations may vary, self-employed and freelance individuals often face the following challenges with public health insurance:

• Minimum Contribution: Those with low income might struggle with the minimum contribution required.
• High Income Costs: High earners may end up paying significant amounts, potentially hitting the maximum limit due to income-based contributions.
• Sick Pay Coverage: Coverage for sick pay is not immediate and requires additional protection, which incurs extra costs.
• Long Commitment Terms: Public health insurance plans often have extended commitment periods.
• Waiting Times: Long waiting periods for appointments and treatments can result in prolonged income loss.

However, for large families, public health insurance might be more cost-effective as it covers all dependents under one policy. The overall coverage and service, however, may not be as comprehensive as private insurance.

Private Health Insurance for Self-Employed

Private health insurance premiums are determined by factors such as age, health status, occupation, and desired level of coverage. Younger individuals, particularly those with higher incomes, often receive better coverage and service at more competitive prices compared to public health insurance.

Benefits of Private Health Insurance for Self-Employed

Private health insurance is favored by many self-employed individuals and freelancers due to the following advantages:

• Income Independence: Premiums are not based on income.
• Flexible Coverage: Insurance plans can be tailored to individual needs, adjusting premiums accordingly.
• Shorter Waiting Times: Faster access to appointments and treatments.
• Premium Refunds: Refunds and bonus programs are available when no claims are made.
• Adjustable Contributions: Contributions can be modified based on the chosen services or by increasing the deductible.

Tax Deductibility of Private Health Insurance

The cost of basic coverage equivalent to public health insurance is tax-deductible up to at least 80%. These expenses are considered special expenses and can be included in your tax return. The health insurance company will provide an annual tax certificate detailing the deductible amount.

Transitioning from Private to Public Health Insurance

Once a self-employed individual opts for private health insurance, this decision is generally irreversible. To re-enter public health insurance, one must become an employee or face unemployment.

We Can Assist You

As independent insurance brokers, we not only provide advice on the best options for you but also give you access to top insurance providers. You receive free advice, ensuring you get the best price and coverage for your needs.