Employees Do Not Pay the Full Premium
A common misconception about private health insurance (private Krankenversicherung, PKV) is that employees shoulder the whole premium alone. In fact, just as in statutory insurance (GKV), your employer contributes — through the Arbeitgeberzuschuss (employer subsidy). For employed PKV policyholders, this typically covers around half of the premium, up to a legally defined maximum.
The principle: your employer pays 50% of your PKV premium for health and long-term care cover, but only up to the amount they would have paid had you been in GKV at the contribution ceiling. Above that cap, the extra is yours.
How the Subsidy Is Calculated
The employer pays half of your PKV premium, but the subsidy is capped at half of the maximum GKV contribution (calculated from the contribution ceiling, the Beitragsbemessungsgrenze, plus the average supplementary rate). In practice this means:
- If your PKV premium is below twice the GKV maximum employer share, your employer pays a full 50%
- If your PKV premium is above that level, the employer pays the capped maximum and you cover the remainder
- The subsidy applies to both your health insurance and your long-term care insurance (Pflegeversicherung) premiums, each with its own cap
Why It Shapes Tariff Choice
The subsidy cap has a practical consequence: if you choose a very lean, low-premium tariff, you might not use the full employer subsidy available to you, whereas a richer tariff up to the cap is partly "free" because the employer pays half. This is why employees should think about the subsidy when selecting their benefit level — there is room to add valuable cover at an effective 50% discount until the cap is reached.
| Premium level | Employer pays | You pay |
|---|---|---|
| Below the cap | 50% of premium | 50% of premium |
| At the cap | Maximum subsidy | 50% (still capped) |
| Above the cap | Capped amount | 50% + the excess |
Claiming and Documentation
The subsidy is normally handled through payroll: you submit proof of your PKV premium to your employer, and the subsidy is added to your salary (and the full premium paid to the insurer, often by you). Keep your insurer's annual premium certificate, which also matters for your tax return, where PKV contributions for basic cover are deductible.
What If You Are Self-Employed?
The Arbeitgeberzuschuss applies only to employees. The self-employed receive no employer subsidy and pay the full premium themselves — one reason the PKV-versus-GKV maths works differently for freelancers, who benefit instead from premiums based on age and health rather than income.
Frequently Asked Questions
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