2027 Health Care Reform: What's Changing for Employers and Employees

The health care reform enacted by the legislature (as part of the Statutory Health Insurance Premium Rate Stabilization Act and the reform packages for 2027 and 2028) calls for extensive cost-cutting measures, cuts to benefits, and structural adjustments to close looming billion-euro deficits in the statutory health insurance system (GKV) and to keep premiums stable. (Source: Publication in the Federal Law Gazette of July 29, 2026; in effect since July 30, 2026).

Background: The average supplementary contribution currently stands at 2.9 percent and has more than doubled since 2022. Based on an example gross monthly wage of 3 , 500 euros, that amounts to 340 euros per year. Without the reform, the supplementary contribution would rise to 3.8 percent in 2027, to 4.1 percent in 2028, and to 4.8 percent by 2030. The projected deficit: 19 billion euros for 2027, 25 billion in 2028, and 44 billion in 2030.

What specific changes are being made to the benefits?

The health care reform that has been passed can be viewed as a comprehensive cost-cutting package for statutory health insurance plans. For those insured under statutory health insurance and for employers, costs will increase significantly in some cases. Below, we present the new regulations in a clear and organized manner, broken down by the affected target groups. The links in the text provide you with more detailed information on specific changes to benefits without requiring you to leave the page.

What can employers do to help alleviate the additional burden on employees?

Given the significant increase in financial burdens resulting from the Statutory Health Insurance Contribution Rate Stabilization Act, employers can take advantage of valuable tax-free or flat-rate taxed benefits to directly safeguard their employees’ net income and health care coverage.

Supplementary employer-sponsored health insurance (bKV) plays a key role in this regard: it is one of the most direct ways to immediately offset benefit cuts by statutory health insurers. And according to recent surveys, it is one of the most popular employee benefits in Germany—far ahead of bike leases or gym memberships.

Employer-sponsored health insurance (bKV) is an employer-funded component of private supplemental health insurance that provides employees with statutory health insurance coverage access to benefits comparable to those of private patients.

The employer enters into a group policy with a private health insurer and enrolls its employees in the plan. The employer typically pays the entire insurance premium. For those with public health insurance , their membership in their health insurance fund remains unchanged— the private health insurance runs parallel to it and covers benefits that public health insurance does not reimburse or reimburses only to a limited extent.

Through the bKV, employees receive an annual health budget set by their employer (e.g., 600, 900, 1,200, or 1,500 EUR)—with no medical exam or waiting periods. You can freely use this health budget starting on day 1 after signing the contract (e.g., to receive private reimbursement for increased copayments for medications and medical treatments, preventive checkups, expensive dental work, or hospital stays—depending on the agreed-upon plan).

What specific benefits does the supplementary health insurance offer employees?

More than 300 health benefits are available to employees on an individual basis each year, depending on their budget plan. The following benefits are in particularly high demand among employees

• Specialist Appointment Service: Waiting times for specialist appointments are likely to increase significantly as a result of the healthcare reform, particularly for those with statutory health insurance (GKV). The bottom line is that this will result in longer absences from work and higher costs. The supplementary health insurance (bKV) offers a specialist appointment service that is not only highly valued but has also been proven to reduce absences due to illness.
• Preventive Care: Regular preventive care is essential for preventing serious illnesses or detecting and treating them at an early stage. Preventive care services are among the core benefits covered by supplemental health insurance (bKV).
• Medications and medical supplies: Copayments for prescriptions may be covered by the bKV.
• Medical Treatments and Assistive Devices: Medical treatments include, among other things, physical therapy, occupational therapy, and speech therapy. Massages, in particular, are very popular with bKV members. Assistive devices, on the other hand, include blood pressure monitors, bandages, and much more.
• Services Provided by Alternative Practitioners: Whether osteopathy, acupuncture, or homeopathy—subsidies are available for treatment by an alternative practitioner. Alternative therapies are generally not covered by statutory health insurance (GKV).
• Dental Care: One to two professional dental cleanings per year are recommended. The bKV provides subsidies for dental cleanings and treatments, as well as for dental prosthetics.

Companies that have implemented a supplementary health insurance plan confirm that investing in workplace health significantly improves the motivation, loyalty, and satisfaction of all employees.

What are the benefits of a supplementary health insurance plan for employers?

The following selected benefits illustrate the potential of investing in the health of all employees:

• Care and appreciation in challenging times: The supplementary health insurance plan serves as a psychological message: “Your health is important to us! We’re investing in your health and planning the future of our company together with you.” There’s hardly a better way to express responsibility and appreciation.
• Greater Loyalty & Motivation: Through supplementary health insurance, employers express their appreciation for their employees—an appreciation that has been shown to be effective and to foster loyalty. It strengthens employees’ commitment to the company while also enhancing the employer’s appeal in the competition for skilled workers and young talent.
• Reducing Absenteeism Due to Illness: Through preventive care budgets and faster access to (private) medical care, employees get sick less often (prevention) and recover more quickly when they do get sick (thanks to better medical care). This permanently reduces costly absenteeism due to illness and sustainably increases the productivity of the entire company!
• High Return on Investment (ROI): Supplementary health insurance (bKV) is classified as a non-cash benefit and is exempt from taxes and social security contributions up to 50 EUR per month. Practical experience shows that a well-planned supplementary health insurance plan offers multiple economic benefits. For example, it provides a far greater net benefit than a salary increase. And if employee absenteeism is reduced by just one day per employee per year, the supplementary health insurance plan pays for itself entirely. From an economic perspective, there is hardly any other investment in the context of employee compensation that offers such a high return!

Conclusion

Use the healthcare reform as a health and motivation booster for your company! Supplementary health insurance is not a social benefit or just another cost factor. It is an indispensable investment in the long-term health and satisfaction of your employees—and thus a key driver of your company’s future success! We would be happy to support you on this journey.

Sources and Legal Basis, as of September 2026.

• Act on the Stabilization of Contribution Rates in Statutory Health Insurance, published in the Federal Law Gazette on July 29, 2026, effective as of July 30, 2026. https://www.bundesgesundheitsministerium.de/service/gesetze-und-verordnungen/detail/gkv-beitragssatzstabilisierungsgesetz
• Federal Ministry of Health, FAQs on the Statutory Health Insurance Contribution Rate Stabilization Act, as of July 10, 2026
• A representative survey conducted by the Civey Institute on the popularity of fringe benefits in Germany in 2023, commissioned by the PKV-Verband e.V.
• PKV - Association of Private Health Insurance (e.V.): https://www.pkv.de/positionen/betriebliche-krankenversicherung
• Section 8, paragraph 2, sentence 11 of the Income Tax Act (EStG)

Note:

FAKTOR MENSCH We have prepared the content of this guide with the utmost care and reviewed it against the text of the law. We will update this guide whenever there is a change in the law and include an update date. Please understand that we cannot guarantee the accuracy, completeness, or timeliness of the information provided.

About FAKTOR MENSCH , LLC:

As a full-service provider specializing in workplace health management and supplemental health insurance, FAKTOR MENSCH supports companies from the initial consultation through to the successful implementation of a customized supplemental health insurance plan. Please feel free to contact us if you need more detailed information about health care reform and ways to ease the burden on your employees—we’d be happy to discuss this with you in a personal, no-obligation consultation.

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