How much does supplemental health insurance cost per employee?

The premium for a supplementary health insurance plan depends on three factors: the selected plan, the benefit budget, and the demographics of the workforce. It is not possible to make a blanket statement such as “supplementary health insurance costs X euros,” but there are clear premium ranges within which most plans on the market fall.

Overview of Premium Categories

  • Basic plans (€10–25/month): Annual budget of €300–500, with a focus on preventive dental care and vision aids. These plans remain below the non-taxable benefit threshold and are therefore tax-free.
  • Mid-range plans (25–50 euros/month): Annual budget of 500–900 euros, including alternative practitioners, osteopathy, and expanded preventive care. Also eligible for tax-free coverage.
  • Premium plans (50–100 euros/month): Annual budget of 900–1,500 euros, often including hospital coverage options (single or double room, treatment by the chief physician) or international coverage. Require lump-sum taxation.

What specifically affects the premium

Demographics play a smaller role than is often assumed—group plans spread risk across the entire workforce. Factors that have a greater impact include: minimum number of participants (larger pools lower premiums), mandatory versus voluntary coverage (mandatory plans are cheaper), and the scope of benefits.

Economic Classification

A €50 plan costs the employer €600 gross per employee per year—which amounts to about €400 net after tax savings. By comparison: A salary increase with the same net effect for the employee would entail employer costs of approximately 1,200 to 1,400 euros. The supplementary health insurance plan is thus about two to three times more cost-effective than a traditional salary increase.

What isn't listed in the premium schedule

The premiums listed are list prices. When negotiating with insurers, discounts of between 5 and 20 percent are realistic depending on the circumstances—especially for larger workforces, multi-year contracts, or clearly defined mandatory rates. A professional rate analysis is therefore almost always worthwhile.

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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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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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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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