Best private health insurance for employees: criteria for choosing a plan

A plan comparison for employees should assess benefits, net premium, premium stability and premium relief together. These four points influence each other. A cheap main plan can create room for stronger relief in old age, while a higher premium can make sense if the benefits you want are clearly better secured for it.

Our guiding idea for employees: More benefits than in statutory health insurance, a comprehensible net premium and relief in old age planned early. For many employees this gives a more coherent overall package than a plan that expands every area of benefits to the maximum.

Five insurers are currently on the shortlist especially often for our employee clients. The order is not a ranking by quality. It does not show a test winner either. It is based on what we currently observe in our advice and in the contracts our clients take out.

This selection does not replace a plan review. In our advice we see that the right solution differs depending on the benefits you want, your health history and your premium planning. We therefore use the overview as an orientation from our current practice, not as a general recommendation for one insurer.

Our advice shows a clear change in what many employees want. More often, they ask for a strong mid-range plan that offers targeted improvements over statutory health insurance. The available budget then does not go entirely into maximum benefits. A larger part goes into premium relief for old age.

For this, the plan is chosen stronger in the areas of benefits that really matter to the client. Other areas stay at a good medium level. This way the client can improve medical cover compared with statutory health insurance and at the same time avoid paying a high ongoing premium for benefits that mean little for their priorities.

The premium room left over can then be used in a targeted way for later premium relief. For many employees, this creates a combination of better cover during their working life and much more clearly planned premium relief in retirement. Whether today's net cost is below the previous statutory contribution, we calculate for the specific client. We do not claim a general saving.

The private premium shown is only the starting point for employees. Privately insured employees receive an employer contribution under the conditions of § 257 (2) SGB V. It is limited to the statutory maximum and to at most half of the health insurance premium actually payable.

The tax treatment also belongs in the calculation. Under § 10 (1) no. 3 EStG, the shares of the premium for private health insurance that relate to benefits at a basic cover level comparable to social assistance can be claimed as special expenses.

A comparison portal that only sets gross premiums side by side therefore does not show the actual economic cost for an employee. We only compare plans in a meaningful way once the employer contribution, tax relief and the scope of benefits you want are all on the table.

Premium relief plans are interesting for employees because their premium is eligible for the employer contribution. The Association of Private Health Insurers expressly confirms that the additional premium for a premium relief plan can be included in the employer contribution.

This creates room to design the contract. If the maximum employer contribution is not yet used up by the main plan, part of the available contribution can go into later premium relief. During their working life, the client thus helps to finance a component that reduces the private premium at an agreed later point.

The offers differ between insurers. This is why we look at the amount of the relief premium, the start of the relief and the later guaranteed premium reduction together with the main plan.

For premium stability, we do not look at a single adjustment date. We look at the average development of a plan over a longer period. In our plan assessment, an average premium increase of about 2 to 2.5 percent per year counts as stable.

Against the background of rising spending on medical benefits, we see this range as a sign of a comprehensible calculation. The Association of Private Health Insurers names rising spending on medical benefits, among other things, as a cause of premium adjustments in private health insurance.

A single premium increase can be well above this long-term average, because premium adjustments in private health insurance are tied to statutory trigger thresholds. This is why the longer-term development of the plan counts for our assessment. A low increase in a few selected years is not enough for our statement on premium stability.

The PKV-Welt benchmark: We consider an average long-term premium increase of about 2 to 2.5 percent per year to be stable. This is our advice benchmark and not a statutory limit or a limit binding for the whole industry.

A plan with a great many top benefits is not automatically the best choice for an employee. We first define which medical benefits should be improved in a targeted way compared with statutory health insurance. After that, we check which plans reflect these priorities cleanly by contract.

In our plan comparisons, we regularly see clear differences in benefits between offers with a similar premium. This is why we do not only assess a total score. We read the policy conditions and check where limits, deductibles or plan requirements affect the benefit in a specific area.

This approach fits the development we observe among employees. Many clients want a good level of benefits with deliberately set priorities. They prefer to use the financial room for premium relief rather than for benefit components that they themselves give little weight.

The choice of plan should also take into account that income and wishes on benefits can change during your working life. § 204 (1) VVG allows a switch to other plans with similar cover with the same insurer, crediting acquired rights and the ageing reserves.

For higher or wider benefits, the insurer can assess the extra benefits for health reasons and require a risk surcharge, a benefit exclusion or a waiting period for them. A good starting plan can therefore offer more room later to weight benefits differently with the same insurer.

For us, this is an argument for not looking only at the lowest possible starting premium for employees. A plan should fit today and stay manageable with the chosen insurer in the long term.

For our advice, tests, ratings and comparison portals are only a first sorting, because their results are based on standardized assessment profiles. These profiles do not fully reflect your personal weighting of benefits or your actual net cost after the employer contribution and tax relief.

This is why our top 5 is not a ranking of the best insurer either. It shows which providers and plans are often on the shortlist or chosen by our employee clients. The specific recommendation only comes from the benefits you want, your health, the net premium, premium development and the planning of premium relief.

For employees, we see a clear trend towards a more deliberate plan structure. Many clients want more medical benefits than in statutory health insurance, but do without the maximum level of benefits in every detail. The budget left over is used more for premium relief in old age.

We find this combination convincing if the chosen plan secures the benefits you want cleanly, the net premium stays affordable and the premium development fits our stability benchmark in the long term. Premium relief is planned from the start and not only looked at shortly before retirement.

If you want to switch to private health insurance, you should therefore first define the level of benefits you want. After that, we compare the suitable plans, calculate the actual net cost and check which share of the available budget can sensibly go into premium relief.

• § 257 SGB V, premium subsidies for employees
• § 10 EStG, special expenses for health insurance premiums
• § 204 VVG, plan change
• Association of Private Health Insurers, premium relief plans in private health insurance
• Association of Private Health Insurers, why premiums rise