Costs of private health insurance for employees

Many online comparisons first put the full private premium in the foreground. For an employee, this figure alone says little.

Under § 257 (2) SGB V, the employer contributes to private health insurance and pays at most half of the actual premium, up to the statutory maximum employer contribution.

For a cost comparison, we therefore distinguish three levels:

If you only compare a gross private premium with your own share of the statutory contribution, you compare two different figures.

It would be just as incomplete to include the tax treatment on only one side of the comparison. Contributions to statutory and to private health insurance can both be taken into account for tax. The rules differ in the details, however.

For our example calculation, we use an employee born in 1992, without children and living outside Saxony. There are no relevant pre-existing conditions. The private plan has no deductible and includes Krankentagegeld and the private Pflegepflichtversicherung (i).

The total private premium in 2026 is €692.53 per month (PKV-Welt example calculation 2026). Because the premium is below the relevant maximum employer contributions, an own share of around €346.27 per month remains before tax in this example.

As the statutory comparison, we use Techniker Krankenkasse. Its health insurance contribution in 2026 is 17.29% in total, made up of the general contribution rate of 14.6% and a Zusatzbeitrag of 2.69%, according to Techniker Krankenkasse for 2026.

In 2026, the Beitragsbemessungsgrenze is €5,812.50 per month, according to the 2026 ordinance on social insurance values of the Federal Ministry of Labor and Social Affairs. For employees without children outside Saxony, their own share of long-term care insurance in 2026 is 2.4%, as Techniker Krankenkasse states for 2026.

This gives the following burden:

In this example, the own private premium before the tax effect is therefore around €295.72 per month below the TK contribution (PKV-Welt comparison calculation 2026).

This difference is not a general saving of private health insurance. Age, health, plan and scope of benefits change the private premium.

The own share after the employer contribution is not yet the final figure. Health insurance contributions are also taken into account for tax.

Under § 10 (1) No. 3 EStG, premiums for private health insurance can be claimed as special expenses to the extent that they relate to the tax-deductible basic cover. Premiums for the private Pflegepflichtversicherung (i) also count as deductible provision expenses.

The whole private premium is not automatically treated the same way. The tax authorities distinguish between the share of the premium for basic cover and for additional benefits. Krankentagegeld (i) is not part of the basic cover for tax purposes either. The tax-free employer contribution also reduces the amount that counts for the special expenses deduction, as the Federal Ministry of Finance explains.

The insurer reports or certifies the tax-relevant parts of the premium. Since 2026, this data has been taken into account electronically for wage tax deduction, as the Federal Ministry of Finance describes in its wage tax notes for 2026.

This is why, for a specific client, we do not simply present the gross premium as a supposed saving. We look at the employer contribution and the tax-relevant parts of the premium. The exact tax effect depends on your personal tax situation and is not a flat figure.

Tip: do not be misled by a low gross private premium in an online comparison. What matters is what you pay yourself after the employer contribution and how both systems compare under similar tax assumptions.

Your income does not set the private premium. Under § 146 VAG, substitutive private health insurance is calculated on actuarial principles. Among other things, the entry age and the insured risk play a role.

For employees, four factors matter most:

An income of €90,000 or €150,000 therefore does not change an existing private plan. In statutory health insurance, by contrast, the contribution rises with income subject to contributions up to the Beitragsbemessungsgrenze (i)BBG · BeitragsbemessungsgrenzeThe contribution ceiling of statutory health and long-term care insurance. Income above this amount is not used to calculate contributions.More about BBG → under § 223 SGB V.

Your state of health should be checked before any specific cost comparison. An example premium is of little help if the insurer offers different terms because of your medical history.

With the private premium, our aim is not to push the monthly premium as low as possible. Employees in particular can use an available employer contribution to help finance stronger cover.

As long as the maximum employer contribution is not yet used up, the employer generally pays up to half of a higher eligible health insurance premium under § 257 (2) SGB V. Extensions of benefits within private comprehensive health insurance can also be taken into account for the employer contribution, as the wage tax notes of the Federal Ministry of Finance for 2026 expressly state.

This creates room later. Under § 204 VVG, privately insured people can change to another plan with similar cover within their insurer and have their acquired rights and ageing reserves credited. Only for additional benefits of the new plan may the insurer ask for health conditions again.

One example is a later move into self-employment. If the employer contribution ends and the monthly premium is to be reduced, an internal change to a cheaper plan can be an option. If you start with very lean cover, you have less room when you reduce benefits later.

Ageing reserves also belong in this view. In a plan change within the insurer, the share of the ageing reserve assigned in the calculation is generally credited to reduce the premium under § 13 KVAV. A higher plan premium can go along with higher absolute reserves, but the exact amount cannot be derived from the monthly premium alone. It depends on the plan calculation.

Our order is therefore: first set the benefits you want, then look at the employer contribution and long-term flexibility, and only then compare your own premium.

The maximum employer contribution to private health insurance is €508.59 per month in 2026, as the Federal Ministry of Health states for 2026.

For 2027, the Beitragsbemessungsgrenze (i) will be raised once by an extra €300 per month on top of the regular update, under § 223 (4) SGB V, in force since 2026, and the explanations of the Federal Ministry of Health.

The federal cabinet adopted the ceiling for 2027 on October 7, 2026. The Federal Council still has to approve it. This gives the following development:

• PKV-Welt model calculation 2027 with the adopted ceiling of €6,375 per month and assuming an unchanged average Zusatzbeitrag (i)ZusatzbeitragThe additional contribution each statutory health insurance fund charges on top of the general rate. Its level differs from fund to fund.More about Zusatzbeitrag → of 2.9%. The Federal Ministry of Health sets the Zusatzbeitrag for 2027 in November.

For an employee with a private premium well below the maximum employer contribution, this increase matters less at first. It becomes interesting for plans with stronger benefits and higher premiums, because in future the employer can carry a larger part of the premium.

For an employee, private health insurance costs are more than the price in a list of plans. We look at the whole premium, deduct the employer contribution and then take the tax-relevant parts of the premium into account.

After that, we check what cover the client receives for this cost. A plan without a deductible for €692.53 can make more economic sense than a much cheaper plan if the low price is bought with limited benefits or a high deductible.

Long-term flexibility also belongs in the calculation. A plan with strong benefits may have a higher premium today, but it later offers more ways to reduce benefits within the insurer in a targeted way.

For employees, the lowest gross premium is therefore not what counts. What matters is your own cost for cover that suits your life planning today and later.

• Federal Ministry of Labor and Social Affairs, ordinance on social insurance calculation values 2026.
• Federal Ministry of Health, contributions to statutory health insurance 2026.
• Federal Ministry of Health, act to stabilize statutory health insurance contribution rates and Beitragsbemessungsgrenze (i) 2027.
• Federal Ministry of Finance, wage tax notes and income tax treatment of health insurance contributions 2026.
• Techniker Krankenkasse, contribution rates 2026.
• § 257 SGB V, contribution subsidies for employees.
• § 10 EStG, provision expenses.
• § 204 VVG, plan change.
• § 13 KVAV, crediting of the ageing reserve in a plan change.
• PKV-Welt example calculation 2026: employee, born in 1992, without children, outside Saxony, no relevant pre-existing conditions, plan without a deductible including Pflegepflichtversicherung (i) and Krankentagegeld (i).