Is supplemental health insurance worth it for small businesses?

A supplementary health insurance plan is not just a tool for large corporations. On the contrary: small and medium-sized businesses, in particular, benefit disproportionately because such a plan gives them a competitive edge that allows them to stand out from larger employers.

Starting at what company size

Many providers offer group health insurance plans starting with as few as three employees, and some even with just one employee. The selection of plans is widest for companies with 10 to 50 employees, as many insurers focus their offerings on small and medium-sized businesses in this range. For companies with 100 or more employees, it makes sense to establish differentiated rate groups.

Three arguments that carry particular weight for SMEs

  • Recruiting differentiation: While large corporations often offer comprehensive benefits packages, many small and medium-sized businesses have little to offer beyond salary. A supplementary health insurance plan changes that with minimal effort.
  • Tax efficiency: When budgets are tight, the leverage provided by tax savings is particularly valuable. For just 30 to 50 euros net per employee per month, you can deliver a tangible benefit that feels like it’s worth twice as much.
  • Low administrative burden: Once implemented, well-structured supplementary health insurance policies can be managed in less than an hour each month—perfect for companies without a dedicated HR department.

A typical scenario for SMEs

A successful SME setup typically consists of: a monthly budget of 30 to 50 euros per employee, fully funded by the employer, with a family option allowing family members to enroll as self-paying participants, and a unilateral benefit plan serving as the legal framework. This keeps costs below the non-cash benefit exemption threshold and requires about 30 minutes of effort per month.

What SMEs Shouldn't Overlook

The biggest pitfall for SMEs is a lack of engagement. A one-time announcement at launch is not enough—companies that fail to actively promote their supplementary health insurance will see usage rates below 20 percent, thereby undermining the effort they’ve invested. SMEs should plan for at least two active communication campaigns per year from the very beginning.

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Related terms

What is a company health insurance plan (bKV)?
Employer-sponsored health insurance (bKV) is a supplementary insurance plan funded by the employer for employees covered by statutory health insurance. It covers services that statutory health insurance (GKV) does not reimburse, or only reimburses to a limited extent—such as dental prosthetics, eyeglasses, alternative practitioners, or advanced preventive care. Up to 50 euros per month, it is exempt from taxes and social security contributions.
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How much does supplemental health insurance cost per employee?
Supplementary health insurance plans typically cost between 10 and 50 euros per month per employee. Plans costing less than 50 euros are tax-free (non-cash benefit limit); higher-cost plans are subject to a flat-rate tax of 30 percent. Premium plans with additional coverage options cost between 60 and 100 euros per month.
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How quickly can a supplementary health insurance plan be implemented?
It typically takes 2 to 4 weeks from the decision to the start of active insurance coverage. Employees can often access benefits as early as the first day of coverage—without a medical exam or waiting period. More complex situations (multiple rate groups, works council approval) can extend the process to 6 to 8 weeks.
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