Budget Rate

The budget plan is the most common type of supplemental health insurance on the market. Instead of combining individual coverage areas, each employee receives a fixed annual budget that they can use for various health services. Typical budget levels range from 300 to 1,500 euros.

Why Budget Tariffs Have Become the Norm

The reason is freedom of choice. A modular plan specifies how the money is to be used—if you don’t need glasses, a vision care module is of no use to you. With a budget plan, the employee decides for themselves whether the money goes toward dental prosthetics, vision care, preventive care, or alternative medicine services.

This has a direct impact on the usage rate: A benefit that fits a person’s individual circumstances is taken advantage of. One that doesn’t fit goes unused—and an unused benefit does not foster loyalty.

For the employer, this structure is easy to budget for: The premium is based on the budget tier, not on individual usage. And communication is simpler—a single amount can be explained in one sentence, whereas a list of benefits with sublimits cannot.

What to Look for When Comparing Options

• Do dental and vision care put a strain on your budget, or are they covered as additional benefits? This is the biggest difference between otherwise similar plans and significantly affects the effective value.
• Are there sublimits for individual categories that apply regardless of the overall budget?
• Is it possible to carry over funds to the next year? This can be crucial for major procedures such as dental prosthetics.
• Which services —telemedicine, specialist appointment scheduling, second opinions—can be used without impacting the budget? They drive perceived value without using up the budget.
• Does a tiered pricing structure apply during the first few years of the contract?
• Is an upfront payment required under statutory health insurance, or does the plan reimburse without requiring an upfront payment—possibly with a flat-rate deduction?

The Relationship to Taxation

The budget amount and the contribution amount are not the same—a point that regularly leads to poor decisions.

An annual budget of 300 euros does not mean a 300-euro premium. The premium is generally significantly lower because no group fully utilizes its budget, and the insurer calculates premiums accordingly. For the 50-euro exemption limit, only the monthly premium is taken into account, not the budget.

In practice, this means that even generous budget levels often remain tax-free. Anyone who assesses the threshold based on the budget amount is ruling out rates that would pose no tax issues.

Which budget level is right for you?

A higher tier isn’t automatically the better choice. What matters most is the balance between your budget, your actual needs, and your ability to communicate: A well-explained and actively utilized 600-euro budget consistently has a greater impact than an unknown 1,200-euro budget.

The premium for the higher tier is particularly worthwhile when major treatments are foreseeable—for example, in the case of a workforce with a higher average age and corresponding dental needs.

Conclusion

The budget-based rate plan combines flexibility for employees with predictability for the employer. The real work lies in comparing the details: Two rate plans with identical budget levels can differ significantly in their actual scope of services—depending on what is charged against the budget and what additional limits apply.