Since 1st January 2009, a change in the insurance reform made it compulsory for everyone to take out health insurance in Germany. Previously (since April 2007) compulsory health insurance was only limited to certain groups of people. Since the 2009 reform, health insurance for self-employed and freelancers in Germany is compulsory to take out either private health insurance or become voluntarily insured within the public health insurance system.
Health Insurance options for freelancers and self-employed in Germany
Self-employed and freelancers in Germany can choose between being voluntarily part of public health insurance or take out a private health insurance policy. Since public health insurance and private health insurance in Germany are fundamentally different in how contributions are calculated and their flexibility, among others, it is important to understand the difference before making the choice.
Public Health Insurance in Germany
Self-employed persons and freelancers in Germany can become voluntarily part of the public health insurance system. The insurance contributions are calculated based on your income at a rate of 18.0% to 20.5%, in addition to an average additional contribution rate of 1.3%. A reduced contrition rate of 14% can apply in certain cases.
The minimum contribution assessment ceiling for self-employed and freelancers who are voluntary members of the public health insurance is €1,131.67 per month in 2023.
The maximum contribution assessment ceiling for self-employed and freelancers who are voluntary members of the public health insurance is €4,987.50 per month in 2024.
This means, based on the contribution rate of 14.6%, the minimum contribution payable is €160.11 + additional contribution (average 1.3%) and the maximum contribution payable is €706.28 + additional contribution (average 1.3%).
The main difference between the different public health insurance providers (Krankenkassen) is service and support, alternative treatment grants, and bonus programs. One of the major differences in public health insurance versus private health insurance is that the public health insurance includes family insurance which covers you, family members, without further contributions.
Disadvantages with Public Health Insurance for For Self-employed and Freelancers in Germany
While there are some advantages of being publicly insured such as family insurance, there may be more disadvantages for others depending on your situation. Some things to consider especially for self-employed and freelancers are:
- Due to the minimum health insurance contribution, it may be very disadvantageous for low income self-employed or freelancers.
- Due to the insurance contributions being calculated on income, it may disadvantageous for high-income earners.
- Public health insurance often has long commitment periods of 1 to 3 years.
- Sick-pay coverage in the event of illness is not from day one and requires additional protection with additional costs.
- Long waiting times for appointments lead to a long time away from work and prolonged periods without income.
Private Health Insurance in Germany
Freelancers and self-employed persons can become members of private health without any further requirements. Private health insurance contributions are based on age, state of health, occupation, and insurance coverage, among others, so it provides often much better coverage, service, and lower cost for younger and hearty persons.
Private health insurance offers more flexibility in terms of coverage as well. You can consider your needs and pay accordingly. Additionally, you can expect shorter waiting times, faster appointments, and access to state of the art medical treatment facilities.
The cost of private health insurance varies due to the individual factors involved. It is therefore not possible to provide an accurate guideline. There are on the other hand ways to reduce costs such as increasing your deductible (your own contributions for treatments and medication), change tariffs, and reduce coverage such as additional services not needed.
There are over 40 private health insurance companies in Germany. It is very important to compare several private health insurances in order to get the best coverage, price, and service. Some of the things that should be considered are;
- The contribution amount;
- Services covered and to what extent;
- Terms of the contract; and
- General price vs coverage ratio.
Additionally, it is advised to get expert advice either from independent insurance brokers or test institutions and rating agencies such as:
Benefits With Private Health Insurance For Self-employed and Freelancers in Germany
Private health insurance is popular among self-employed and freelancers, not only because public health insurance is optional, but because of the flexibility it provides. Some benefits and advantages with private health insurance for self-employed and freelancers are:
- Not income dependent, thus it’s a much better option for younger and healthy persons.
- Insurance coverage is flexible and can be tailored according to your needs.
- Fast appointments, short waiting times, and access to top medical institutions lead to quicker recovery times.
- Often premium refunds are offered when no benefits are paid throughout the insurance year.
- Contributions can easily be lower by increasing the deductible.
Additionally, for self-employed and freelancers who travel often, private health insurances often provide coverage worldwide and can even include patient repatriation.
Self-employed and Freelance Artists Health Insurance (The Künstlersozialkasse KSK)
The artists' health insurance is special insurance offered via the Künstlersozialkasse. Both artists and publicists are usually less protected than other self-employed and freelance individuals, so with help from government grants and companies involved with art and journalism, artists only pay 50% of the contributions.
It is important to note that the Künstlersozialkasse is not an insurance prover itself, but coordinates the payment of contributions for its members. The income threshold is 3,900 EUR annually (with some exceptions) and it is often a long process to get approval for this type of insurance.
Changing from Private Health Insurance to Public Health Insurance
If self-employed and freelancers decide to become exempt from public health insurance by taking out private health insurance, the decision is irrevocable. This means a return to public health insurance is only possible if you become an employee and thus the public compulsory health insurance regulation applies. Or else in case of unemployment, public health insurance generally provides health insurance coverage.
For more information about changing private health insurance provider or tariff, read the article private health insurance in Germany.
Self-employed Part-time Regulations
The main occupation is always important when it comes to health insurance in Germany. The full-time insurance regulations apply even if you have a self-employed part-time job. This means health insurance regulations for employees apply.
Part-time self-employment is considered a secondary occupation if the hours do not exceed 18 hours per week or that the income does not exceed the amount of the main occupation. The income also needs to be reported to the public health insurance company as it plays a role in the contribution calculation.
Private Health Insurance is Tax Deductible for Self-employed and Freelancers in Germany
The cost of private health insurance is tax-deductible for self-employed and freelancers. The benefit level equally to public health insurance is tax-privileged and is dependent on the services offered in public health insurance. This includes also insurance for family members and partners registered in a civil partnership.
So the costs of basic protection equivalent to public health insurance are tax-deductible up to at least 80% (depending on the scope of services). These can be noted down as special expenses. The health insurance determines the exact amount and issues a tax certificate each year.
Health Insurance Tax Deduction Example
The example of tax savings for private health insurance for self-employed and freelancers in Germany assumes a total health insurance cost of €7,536, of which the basic coverage (equivalent to public health insurance) is €7,008.
Private health insurance tax deduction example
Emergency Tariff For Self-employed and Freelancers
If a change of income leads to self-employed and freelancers being unable to pay their private health insurance contributions, the insurance provider can choose to suspend the insurance contract. If this happens, the emergency tariff takes over, and you will be covered for only acute pain and illnesses at a reduced rate or around 100 EUR per month.
The emergency tariff can not be chosen freely and a return to the private health insurance contract can be done upon payment of all contributions due.