What is a company health insurance plan (bKV)?

Employer-sponsored health insurance—or bKV for short—is an employer-funded component of private supplemental health insurance. It provides employees with statutory health insurance coverage access to benefits on par with those available to private patients, without affecting their statutory health insurance membership. The two systems operate in parallel: Statutory health insurance remains unchanged, while employer-sponsored health insurance specifically supplements it where standard coverage leaves gaps.

How the contract is structured

The employer enters into a group policy with a private health insurer and enrolls its employees in the plan. The employer is the policyholder, and the employees are the insured individuals. Under modern plans, there are no medical exams or waiting periods—employees can access benefits starting on the first day of coverage.

What services are typically covered

Most plans are structured as budget plans: Employees receive an annual health budget of between 300 and 1,200 euros, which they can use flexibly. Common areas of coverage:

  • Dental treatments, teeth cleaning, dentures
  • Eyeglasses, contact lenses, laser eye surgery
  • Alternative Medicine Services According to the Fee Schedule
  • Osteopathy and Manual Therapy
  • Advanced preventive health screenings not covered by the statutory health insurance plan
  • Travel and IGeL vaccinations
  • Quick Appointment Services for Specialists

Tax Treatment at a Glance

Up to the monthly non-cash benefit exemption limit of 50 euros per employee, the supplementary health insurance plan remains exempt from taxes and social security contributions. If the premium exceeds this amount—for example, with annual budgets of 600 or 900 euros—the employer can pay a flat-rate tax of 30 percent. In both cases, the benefit remains tax-neutral for employees.

Distinction from private health insurance

Supplementary health insurance is not the same as private comprehensive health insurance. Employees remain members of their statutory health insurance plan—the supplementary health insurance serves as an additional layer of coverage. When they leave the company, employees can generally transfer their coverage to an individual policy without having to undergo a new medical examination.

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Related terms

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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Is supplemental health insurance worth it for small businesses?
Yes. Supplementary health insurance is available for companies with as few as three employees and offers a significant recruitment advantage, especially for small businesses. Its tax efficiency (2 to 3 times more effective than a salary increase), minimal administrative burden, and proven ability to retain employees also make it attractive for small and medium-sized enterprises.
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Is the supplementary health insurance tax-free?
Up to the monthly non-cash benefit exemption limit of 50 euros per employee, the supplementary health insurance is exempt from income tax and social security contributions (Section 8(2), Sentence 11 of the German Income Tax Act). For higher premiums, the employer may claim a flat-rate tax deduction of 30 percent (Section 37b of the German Income Tax Act)—the benefit remains net-neutral for the employee nonetheless.
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Are employees required to undergo a medical examination?
No, most modern group health insurance policies do not require a medical examination at all. Even employees with pre-existing conditions are accepted without an examination. The requirements are that the insurer’s minimum enrollment threshold is met and that the employer covers the costs. In a few cases—such as very small groups, late enrollments, or family members enrolling outside the enrollment window—a simplified medical examination may apply.
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