Employer-Sponsored Long-Term Care Insurance

Employer-sponsored long-term care insurance is the most obvious supplement to private long-term care insurance: it has the same structure—based on a group contract—and the same tax treatment, but covers a different risk. It fills a coverage gap that statutory long-term care insurance deliberately leaves open.

Why the Gap Exists

Statutory long-term care insurance is structured as partial coverage—it covers a portion of the long-term care costs, not the full amount. Any costs beyond that are borne by the individuals affected and their family members.

This affects two groups within the company: the employees themselves, whose retirement coverage remains incomplete, and those who are currently caring for family members and often reduce their working hours as a result.

What Sets the bPV Apart from the Rest

Unlike supplementary health insurance, it doesn't come into play in everyday life, but rather in a situation that no one plans for. This creates a communication problem: The benefit is abstract and lies far in the future.

In practical terms, this means that an occupational pension plan alone rarely has the same impact as an occupational health insurance plan—but it can be easily integrated as a supplement to an occupational health insurance plan that is already in place and being used. Access to the workforce is already established in that case.

The similarities with the bKV

• Collective Bargaining Agreement: The employer is the policyholder; employees are insured through the employer.
• Eligibility: Often no medical exam required, or a simplified one—an advantage over private insurance.
• Tax treatment: Treated as a non-cash benefit, with the same 50-euro exemption limit and the same taxation options for amounts above that limit.
• Joint coverage limit: If the bKV and bPV are in effect at the same time, the premiums are added together—this point should be checked before combining the plans.

This last point is often overlooked. Two reasonable benefits, when combined, can exceed the exemption limit, thereby making both subject to tax.

What to Look Out For

• Which type of benefit —daily long-term care allowance, monthly long-term care allowance, or reimbursement of expenses?
• At what care level do benefits begin?
• Is portability available upon termination, and under what conditions?
• How does the premium for the existing supplemental health insurance plan (bKV) relate to the exemption limit?

Conclusion

Company-sponsored long-term care insurance is conceptually sound but challenging to communicate. It is particularly well-suited as a second step following the implementation of a company-sponsored health insurance plan—and for tax purposes, it should be calculated together with that plan, not separately.