Your basic options as an employee
As an employee you can belong to one of the three groups below. Belonging to any of the groups is determined mainly by your gross salary, because the German authorities have decreed that people with a certain gross salary are to be compulsorily insured with the public health insurance, others with a different salary have an option to remain either a voluntary member of the public health insurance or switch to private health insurance. If such a switch is recommendable will then depend on other parameters we will discuss
Group I - Employees with salary below threshold for private health insurance, i.e. with compulsory public health insurance
Definition: Newly or long-time employed in Germany with a gross salary of lower than €48,500 per year.
If you belong to this group, you have no choice between public and private insurance and will be compulsorily insured in a public insurance. However, read the part about PUBLIC HEALTH INSURANCE to see that you DO have a choice among the public insurance carriers and that you can save a lot of costs when choosing those with low costs. You have to be pro-active about this, because if you don't tell the HRM managers a specific choice of yours you will get signed up with the deault choice AOK most likely - and you can then switch only after 18 month duration with this first choice. Furthermore, read the part about the PRIVATE ADD-ON INSURANCE if you are unhappy with what you read about the coverage of the public insurance and you want better coverage in certain areas. And finally: public insurance does not cover you when traveling outside of the European Union at all (and only with some limits within the European Union), therefore definetly read the section about TRAVEL INSURANCE if you do intend to travel outside the EU every now and then (for visits home, for example).
Group II New arriving employees with a gross yearly salary of >48.500.- EUR and a choice between public and private health insurance
Definition: Newly employed in Germany with a gross salary in excess of the threshold of €48,500 per year.
If you belong to this group, you might have the option of opting out of the public insurance and get yourself insured either in a private German health insurance. Legally you would even have a choice to use an international health insurance as employee, but most salary accounting programm in Germany are not made to work with any other insurance then German insurances and thus employers usually don't accept foreign insurance simply for administrative reasons.
What determines if you actually have the choice? a) You must be sure that your total gross salary from German and foreign sources for the current year when you start your employment in Germany exceed this threshold for the full year. Lets say for sake of argument that you worked in Australia from January until April of the current year and earned a gross salary of €4,000 (equivalent) per month. Because you need some time to sell you house, pack your things and establish a new household in Germany , you did not work or rather did not receive a gross salary for the months of May and June. In July you start your employment in Germany , again with a gross salary of €4,000. Your total for the year would then only be €40,000 and you would lose your eligibility to opt out from public insurance for this year and for at least the next three years where your gross salary must consecutively remain over the threshold. b)Even if your gross salary for the current year exceeds the threshold, you must also provide proof that your gross salary for the last three years ( 2005,2006 and 2007) has been consecutively in excess of the threshold.
The threshold for those years were:
year | annual threshold | monthly equivalent
2005 | 46,800.00€ | 3,900.00€
2006 | 47,250.00€ | 3,937.00€
2007 | 47,700.00€ | 3,975.00€
Only if your gross salary in all three years has been in excess the threshold are you eligible for an immediate opt-out from public health insurance. If you were under the threshold in 2005, for example, you will have to get yourself insured publicly for one more year before you can opt out. If you have been over the threshold in 2005 and 2006 but not in 2007 you have broken the chain of three consecutive years and you will start in 2008 with public insurance and continue to remain compulsorily in the public insurance for the years 2008, 2009,2010 and probably 2011. If you do not fulfill the provision under either a) or b), please focus your reading on the PUBLIC HEALTH INSURANCE section. If you feel that your employer is somewhat flexible when it comes to legal rules and provisions, you might also want to read the part on private insurance where it is explained how the proof under b) has to be demonstrated and to whom and what legal consequences arise out of this process.
Should you fulfill the provisions above, please read the information about private insurances for employees below and also the guideline there on when to opt out of public insurance and when better to remain in the public insurance (Public vs. Private Health Insurance). It might still be a better solution in the long run for you to remain in the public insurance, sacrificing short term profits for long term gains.
Group III Expat employees already living and working in Germany for some time with salary in excess of the threshold and a possible option for private health insurance
Definition: Already employed in Germany for some time with a gross salary in excess of the threshold €48,500 for 2008.
We have seen it happening time and again that Expats who were perfectly eligible to opt out from public insurance from day one have not been informed by their employers or responsible HRM people and discover only later that they missed out on considerable savings. Until February 2007, it was actually quite simple to get these people out of the public health insurance, but ever since the new health insurance law became effective the same rules apply as explained above for Group II and thus make it more complicated.
Scenario 1: You have had a gross salary in excess of the threshold from the very beginning of your employment in Germany . In that case you have to check for how long backwards you can determine and prove that your gross salary inside and/or outside Germany was over the relative thresholds (check table above for reference numbers) for the last three years or more. If your salary was over the threshold consecutively for three years or more, you can opt out immediately. If this makes sense should be determined for you by us, but you can start to read about the pros and cons here. On the other hand, if your gross salary was for instance over the threshold only for two years, then you have to remain publicly insured until three consecutive years with gross salary over the threshold are fulfilled.
Scenario 2: Your German gross salary has been raised over the threshold only this year or some time last year. In this case you first have to have one full calendar year of being over the threshold. If your pay rise happens mid-year, chances are that the total for the year will not yet be in excess of the threshold amount. Than you will have to add another three years of being consecutively over the the threshold, i.e. you can opt out after 2011 at the earliest.In this case read more about your choices among public health insurance, your options to improve the coverage through private add-on insurances and the need to cover you when going abroad with a travel insurance.
