bKV ROI Calculator

Key Points at a Glance

• The ROI is calculated by subtracting the employer's costs for the supplemental health insurance from the estimated savings, then dividing the result by those costs.
• The savings consist of two parts: the reduction in employee turnover costs and the reduction in absenteeism costs.
• Both reductions are assumptions you make yourself—they are not guaranteed benefits under the supplementary health insurance.
• The break-even period in months is calculated by dividing the annual bKV costs by one-twelfth of the estimated annual savings.

The calculator compares the cost of a supplementary health insurance plan with the savings that would result from lower employee turnover and fewer sick days—based on assumptions you set yourself.

What this calculator calculates

The question isn't: Does supplemental health insurance work? It's: If it works to the extent you consider plausible—is it worth the cost? The calculator doesn't take your assumption at face value; it shows you the consequences of that assumption.

The two assumptions

The default assumptions are a one-percentage-point decrease in the employee turnover rate and a decrease of half a day in sick leave per employee per year. Both figures have been deliberately chosen conservatively and are labeled as assumptions throughout. They are target values, not expected outcomes.

How Costs and Benefits Are Calculated

On the cost side is the bKV premium, plus the employer’s tax burden, depending on the tax treatment model. On the benefit side are two factors: the avoided turnover costs—number of employees multiplied by the reduction in turnover rate multiplied by the cost per departure—and the avoided absenteeism costs—number of employees multiplied by the reduction in days lost multiplied by the cost per day of absence.

Break-even

The break-even point indicates how many months it would take for the assumed savings to offset the annual costs. If there are no savings, there is no break-even point. Since the savings are based on self-defined assumptions, the break-even point is also a model variable and not a forecast.

To be honest

The reported ROI and break-even point are based entirely on your assumptions. Whether and to what extent an employer-sponsored health insurance plan affects employee turnover or absenteeism depends on many factors and is not asserted here. The tax information provided is not a substitute for tax advice.

Frequently Asked Questions

How do you calculate the ROI of an employer-sponsored health insurance plan?

The ROI is calculated by subtracting the employer costs of the supplemental health insurance from the estimated savings, then dividing the result by those costs. The savings consist of the reduction in employee turnover costs and the reduction in absenteeism costs. Both of these reductions are assumptions set by the user.

How much does a sick day cost?

A day of absence is typically calculated as the average annual salary plus employer payroll overhead, divided by the number of working days in a year. With an annual salary of 48,000 euros, 20 percent payroll overhead, and 220 working days, this amounts to approximately 262 euros per day of absence.

When does a supplemental health insurance plan reach the break-even point?

The break-even period in months is calculated by dividing the annual bKV costs by one-twelfth of the estimated annual savings. If there are no savings, there is no break-even period.

Sample Calculation

A company with 100 employees pays 25 euros per person per month into a budget-based supplementary health insurance plan—within the non-taxable limit for non-cash benefits, and therefore tax-free.

• Annual bKV costs: 100 × 25 euros × 12 = 30,000 euros
• Assumption regarding employee turnover: one percentage point lower, which means one fewer departure × 36,000 euros = 36,000 euros
• Assumed absences: 0.5 days fewer × 100 employees × 262 euros = 13,100 euros
• Estimated savings: 49,100 euros

ROI: (49,100 − 30,000) ÷ 30,000 = about 64 percent. Break-even: 30,000 ÷ (49,100 ÷ 12) = about 7.3 months.

Both assumptions about the effect are given. If you halve them, you end up with a negative ROI—and that is precisely the point of this calculation.

Sources and Assumptions

• Tax Treatment: Section 8(2), sentence 11, Section 37b, and Section 40 of the Income Tax Act (EStG); the rates used are taken from the approved tax parameters in FM-Admin.
• Decrease in employee turnover and days absent: User assumptions. The default values are one percentage point and half a day absent—conservative estimates that are not intended to be empirically verifiable.
• Costs per day of absence and per termination: calculated based on the entered values for salary, non-wage labor costs, and working days.

This calculator deliberately does not cite any impact studies on supplementary health insurance.