Private health insurance comparison for employees: how to compare plans properly

Employees share the eligible premium for private health insurance with their employer within the statutory limits. Under § 257 (2) SGB V, the employer pays towards the premium if the statutory requirements are met. A plan with a higher gross premium can therefore make more economic sense for an employee than a cheaper offer.

This is why we do not compare a plan in isolation by price or benefits. What matters is what you actually get for your own share and how the contract is set up over many years.

The core of our comparison: We do not compare the cheapest plan. We compare the combination of the benefits you want, the actual net cost, long-term premium development and provision for old age.

In our consultations, five insurers end up on the shortlist especially often for employees who want to switch. The order is not a ranking by quality and does not say which insurer is better in general.

The table shows which solutions often remain for employees after our advice. It does not replace an individual plan comparison. Your wishes on benefits, the health questions, your own share and premium planning can mean that a different plan fits better.

Online comparisons usually show the premium of the plan first. For employees, this figure is only the starting point. Under § 257 (2) SGB V, the employer pays towards the eligible insurance premium within the statutory limits.

Tax relief comes on top. Under § 10 (1) no. 3 EStG, the shares of the premium for basic cover can be claimed as special expenses. The actual tax effect depends on your personal situation and does not belong in a flat online comparison.

We therefore calculate plans through to the actual cost for the employee. Only then can you judge whether a higher gross premium is really more expensive, or whether the employer contribution and the tax effect clearly reduce the gap.

A high deductible can make a plan look cheaper in a comparison, even though your own annual cost turns out higher. The employer pays towards the insurance premium, not towards the costs you carry yourself within an agreed deductible.

For employees, we therefore do not only compare the monthly premium. We also set the possible deductible against the premium. A higher premium with a lower deductible can be more attractive economically if the employer carries part of the additional insurance premium.

A plan comparison must first define which benefits matter to you. Buzzwords such as chief physician or single room are not enough for this. Differences are often found in the conditions for medical treatment, medical aids, therapeutic remedies, psychotherapy, inpatient care or dentures.

We therefore first define the areas in which you want added value compared with your current statutory cover. After that, we only compare the plans that meet these requirements cleanly by contract.

In our experience, many employees now deliberately choose a plan without the maximum scope of benefits in every area. More often, people ask for a strong mid-range plan with targeted improvements where the client sees real added value.

With employees, we often see a clear wish. They want more benefits than in statutory health insurance, an attractive own share during their working life and at the same time strong protection against high private premiums in old age. For this, not every area of benefits has to be at the highest level available.

Part of the available budget can instead go into a premium relief plan. The insured person pays an additional premium today and later receives a reduction of the health insurance premium agreed in the contract. The Association of Private Health Insurers confirms that premiums for premium relief plans can be taken into account for the employer contribution within the statutory limits.

For employees, this is a relevant advantage. The employer can help to finance part of the provision for the later private premium. This is why premium relief belongs in the original private health insurance comparison for us, and not only in the planning shortly before retirement.

A low starting premium is not a sign of quality. For our assessment, we look at the average premium development of a plan over a longer period, not only at single adjustment years.

We consider an average premium increase of about 2 to 2.5 percent per year to be stable. This range is not a guarantee for future premiums and not a binding limit for the whole industry. We use it to classify the long-term development of a plan.

Rising premiums alone are no sign of a poor calculation. The Association of Private Health Insurers names rising spending on medical benefits and medical and technical progress as the main drivers of cost development. In our view, a plan that reflects this development over many years with moderate adjustments can be calculated soundly.

We look more critically at plans that start out conspicuously cheap and later stand out with sharp premium jumps. This is why we compare the development at plan level where possible, not only the average of an insurer.

Our benchmark for premium stability: In the long-term course of a plan, we consider an average premium increase of about 2 to 2.5 percent per year to be stable. What counts is the development over many years, not a single adjustment.

Within the same insurer, plans and plan generations can develop differently. A stable company average therefore says little about the specific contract you want to take out.

Where possible, we check the premium development of the specific plan over a longer period. A single increase can be well above the long-term average and does not change our assessment automatically. The development over several adjustment periods is more meaningful.

A plan can first do very well on benefits and premium and still drop out after the health questions. Insurers assess pre-existing conditions differently. A risk surcharge can also change the economic order of several plans.

If there is relevant health information, we therefore check the chances of acceptance with an anonymous risk enquiry before a formal application is made. This way the comparison can focus on the plans that you can actually get with the benefits you want.

Our experience from a large number of applications with health questions that we have supported shows that identical health information can be assessed differently by different insurers.

An employee usually takes out private health insurance for many years. Income, professional situation and the scope of benefits you want can change during this time.

Under § 204 (1) VVG, you have the right to switch to other plans with similar cover with your existing insurer. Acquired rights and ageing reserves are credited under the statutory rules. For additional benefits, the insurer can require a risk assessment.

This is why we also look at the range of plans of the insurer in the comparison. A good starting plan can offer more room later if the cover or the premium is to be weighted differently within the company.

An online calculator can quickly show premiums and some benefit features of different plans. This is helpful as a first orientation. For the final decision, however, the personal weighting of the policy conditions, the net view for employees, the plan history and the actual risk assessment are often missing.

For employees in particular, a pure price comparison can point in the wrong direction. A cheaper gross premium does not automatically mean a lower own share, and it certainly does not mean better cover.

We start with the cover you want. After that, we set suitable plans side by side, check premium development and the deductible and calculate your actual own share as an employee. Premium relief is part of the plan from the start.

If there are health issues, we then clarify your insurability anonymously. Only then are the plans fixed that are truly comparable in benefits, economics and health.

1. Define the benefits you want
2. Compare suitable plans and policy conditions
3. Classify the net cost including the employer contribution
4. Check premium stability, deductible and premium relief
5. Clarify insurability with an anonymous risk enquiry

A good private health insurance comparison for employees answers three questions at the same time. Which medical benefits do you get, which amount do you actually carry yourself and how is the contract set up for the long term? The cheapest gross premium does not fully answer any of these questions.

For many employees, we prefer a combination of good to very good benefits in the areas you want, a comprehensible premium development and high premium relief for old age. This gives more benefits than before in statutory health insurance and splits the available budget more deliberately between care today and premium planning for later.

Which plan solution fits is then clarified through the policy conditions, your own share and the health questions. The five insurers that are often chosen are an orientation from our practice, not a ranking.

In our view, there is no general ranking. In our consultations, Allianz, LKH, SIGNAL IDUNA, Alte Oldenburger and uniVersa are often on the shortlist for employees. Which plan fits depends on benefits, own share, premium development and insurability.

For employees, the cheapest gross premium is not a sufficient measure. Under § 257 (2) SGB V, the employer pays towards the eligible insurance premium. An agreed deductible, however, you carry yourself. You should therefore always look at the whole possible own cost.

We consider a long-term average premium increase of about 2 to 2.5 percent per year to be stable. The figure is used to classify past developments and is not a forecast for future premium adjustments.

For employees, it already belongs in the original comparison for us. According to the Association of Private Health Insurers, premiums for a premium relief plan can be taken into account for the employer contribution within the statutory limits. This means part of the later premium relief can already be built up during your working life with your employer paying a share.

• § 257 SGB V, premium subsidies for employees
• § 10 EStG, tax treatment of health insurance premiums
• § 204 VVG, plan change with the same insurer
• Association of Private Health Insurers, privately insured as an employee
• Association of Private Health Insurers, premium relief plans in private health insurance
• Association of Private Health Insurers, premiums and premium calculation