How long does a supplementary health insurance policy last, and can it be canceled?

Group health insurance policies follow standard insurance practices with annual terms—but they are generally more flexible than individual health insurance policies, particularly when it comes to rate changes during the term.

Minimum term and renewal

Standard terms: The contract has a minimum term of 12 months and is automatically renewed for additional 12-month periods unless canceled in a timely manner. Some insurers offer multi-year contracts (3 or 5 years) with premium discounts ranging from 5 to 15 percent.

Notice periods

  • Standard contract: 3 months' notice period prior to the end of the contract
  • Multi-year contract: End of the contract term plus a 3-month notice period
  • Special notice of termination in the event of a premium adjustment: 1 month from the date of notification of the premium change
  • Special termination in the event of an insurer's default: Varies depending on the specific situation

Termination by the employer

The employer may terminate the group contract at any time upon its expiration. Three points must be considered when terminating the contract:

  • Employee Communication: At least 6 months before the contract expires, so that employees can plan their transition to individual contracts
  • Transition rights: All employees are entitled to transition to individual contracts without a new medical examination; the transition period is typically 2 to 6 months after the contract ends
  • Amend the benefit plan: If the supplementary health insurance plan is terminated without replacement, the benefit plan must be amended accordingly

Resignation by the employee

Individual employees cannot cancel the group policy—they are merely insured individuals, not policyholders. When they leave the company, their coverage automatically ends, with the option to switch to an individual policy.

Changes to the contract during its term

Unlike many other types of insurance policies, supplementary health insurance policies can often be adjusted during the term of the policy:

  • Plan upgrade for all employees — typically available at any time
  • Rate downgrade — depending on the insurer, often only at renewal
  • Add the Family Option — available at any time
  • Whether the number of employees increases or decreases—it is adjusted on an ongoing basis, but this can affect bonus calculations

Premium adjustments

Insurers may adjust premiums upon renewal, provided they justify the increase to the employer. In the event of significant increases (typically over 10 percent), a special right of termination applies. In practice, premium adjustments are less common for group supplementary health insurance plans than for individual policies, because group pools are calculated on a more stable basis.

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Related terms

Do I need a pension plan?
A pension plan is not required by law, but it is strongly recommended. It provides legal certainty, prevents disputes over the inclusion or exclusion of individual employees, and protects against discrimination claims under the AGG. For small and medium-sized enterprises (SMEs), 3 to 8 pages are usually sufficient, often in the form of a single-page general commitment from the employer.
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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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What happens to your supplemental health insurance when you change jobs?
When employees leave the company, they can generally transfer their supplementary health insurance to an individual policy with the same insurer without undergoing a new medical examination. Their coverage remains in effect, and the employee is then responsible for paying the premium. The deadline for this transfer is typically 2 to 6 months after the contract ends.
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