Collective Bargaining Agreement

The collective bargaining agreement serves as the contractual basis for every employer-sponsored supplemental health insurance plan. The employer enters into this agreement with the insurer, and employees are insured under it. This structure provides nearly all the advantages that an employer-sponsored supplemental health insurance plan has over a privately purchased supplemental insurance policy—including favorable terms and tax benefits.

What the Collective Bargaining Agreement Allows

• Group Rates: The insurer calculates the risk based on the entire workforce rather than on individual cases. As a result, the premiums are significantly lower than those of comparable individual policies.
• No medical exam or a simplified one: Even employees with pre-existing conditions are insurable — often the most compelling point when communicating with the workforce, because for some individuals, it means the difference between coverage and rejection.
• Waiting times are eliminated or reduced, so that services are available immediately.
• Standardized Calculation: With Uni-Age plans, the employer pays the same premium for everyone, regardless of age. This greatly simplifies budgeting and administration.

Requirements on the Employer's Side

In order for the insurer to grant these terms, it requires a minimum level of participation—either the entire workforce or a clearly defined group that cannot be freely selected. The reason is risk equalization: Without this condition, the majority of those who enroll would be people expected to require benefits.

The minimum number of policyholders varies considerably depending on the provider and is one of the first criteria used to narrow down the selection of potential insurers. Pure copayment models often result in the insurer requiring another medical exam—which would negate the main advantage.

Definition of the Insured Group

If not the entire workforce is insured, the criteria for exclusion must be objectively justified and transparent. Common criteria include length of service, location, or affiliation with a company within a group.

Arbitrary selection leads to labor law issues—employees who are excluded without a clear reason can assert their right to equal treatment. This provision belongs in the benefits policy, not in an informal agreement.

The Tax Implications

In order for the supplementary health insurance (bKV) to be treated as a benefit in kind, the employer must be the policyholder and pay the premium directly to the insurer. This is exactly what the group insurance policy does—it automatically meets this requirement.

Without it, the only option left is the subsidy model, in which the employee is the policyholder. This constitutes cash wages subject to full tax and social security obligations, and the 50-euro exemption limit does not apply.

What to Do When You Leave

When an employee leaves the company, coverage under the group insurance plan generally ends. Many plans offer the option to continue coverage privately—often without a new medical exam, but under individual terms. How this portability is structured varies by insurer and is one of the factors that should be examined when comparing plans.

Conclusion

The collective bargaining agreement is not a mere formality, but rather the prerequisite for both favorable terms and tax benefits. Its terms determine who is covered, under what conditions, and how the benefits are treated for tax purposes—three issues that are difficult to correct retroactively.