Supply Regulations

The eligibility guidelines are one of the most frequently overlooked yet operationally critical documents when implementing a company health insurance plan. They set out in writing which employee groups are eligible for the plan under what conditions—and, by extension, who is not. While not legally required, the absence of these guidelines opens the door to labor disputes and claims of unequal treatment. For small and medium-sized employers, it is therefore an essential part of a proper company health insurance implementation.

What a pension plan covers

A good supply policy answers the following questions in a clear and definitive manner:

  • Which group of employees is eligible? (All employees, only full-time employees, only those with permanent contracts, only those who have been with the company for a certain length of time)
  • Which pay grade is assigned to which district? (Do all districts receive the same pay grade, or is it tiered based on hierarchy, length of service, or location?)
  • Who covers the costs? (Full employer funding, hybrid models, employee contributions)
  • What are the rules regarding new hires, changes in length of service, parental leave, sabbaticals, and termination?
  • What are the eligibility requirements and grounds for exclusion?
  • How is the supplementary health insurance plan legally structured—as a voluntary benefit, as a company agreement, or as part of the employment contract?

The more precisely these questions are answered, the lower the risk that individual employees will later sue for inclusion or demand higher pay grades.

The principle of equal treatment under labor law

The central legal issue regarding supplementary health insurance is the principle of equal treatment under labor law. Put simply, if an employer offers a benefit, they must extend it to all employees in comparable situations, unless there are objective reasons for making a distinction. Supplementary health insurance provided exclusively to executives without objective justification is a classic case that is regularly rejected by labor courts.

At the same time, there are legitimate reasons for differentiation. Typically, the following are permissible:

  • Differentiation based on hierarchy, where managers have significantly greater responsibility (must be justified)
  • Differentiation based on length of service (the seniority principle is recognized in Germany)
  • Distinction between full-time and part-time (permitted for proportional scaling, but not for complete exclusion)
  • Differentiation by location based on genuine operational differences

Discrimination based on gender, age (except in narrowly defined exceptions), ethnic origin, religion, sexual orientation, or disability is not permitted—this is prohibited by the General Equal Treatment Act (AGG).

Form and Legal Effect

A pension plan can take three legal forms, which differ in terms of their binding effect and the ability to amend them:

As a unilateral declaration by the employer (general commitment): The employer communicates the supplementary health insurance plan to the entire workforce. Legally, this is a voluntary benefit, but repeated provision over several years can lead to what is known as an established company practice—at which point the entitlement can no longer be unilaterally revoked.

As part of the employment contract: Supplementary health insurance is governed on an individual basis for each employment contract. This provides the highest level of legal certainty for both parties, but is time-consuming to amend (in the event of a change in collective bargaining agreements, all contracts would theoretically have to be revised).

As a works agreement: In companies with a works council, the supplementary health insurance plan is governed by a works agreement. This has the highest binding effect and is democratically legitimate, but requires the existence of a works council.

Typical content in sample templates

A practical care plan is typically 3 to 8 pages long and includes the following sections:

  1. Preamble: Objectives and Motivation
  2. Scope of Application — Who Is Covered, Who Is Excluded
  3. Eligibility Requirements and Start Date of Benefits
  4. Scope of Services — Reference to Rate, Budget, Options
  5. Financing — Who Pays What, Family Option Plan
  6. Policies regarding major life events (parental leave, illness, termination, retirement)
  7. Data and Confidentiality Clauses
  8. Amendment and Cancellation Clauses
  9. Effective Date and Term

FAKTOR MENSCH : We see two extremes in consulting: companies that have no benefit policy at all and run into legal ambiguities the first time an employee makes a request—and companies that draft them in such complex language that no one understands them. Our recommendation: A clear, five-page benefits policy written in plain language, accessible to every employee as an onboarding document. The side effect is doubly positive: legal certainty increases, and the utilization rate rises as well, because employees can actually look up their entitlements. Complex policies are costly policies.

When the pension plan must be amended

Any significant change to the supplementary health insurance plan should be reflected in the benefit regulations. Typical reasons for such changes include:

  • Changing insurance providers or plans
  • Introduction of new pay grades or budget increases
  • Addition of a family plan
  • Changes to the financing structure
  • Changes in the law — particularly regarding limits on non-cash benefits or flat-rate taxation

Where possible, changes should not be implemented unilaterally by the employer, but rather—in the case of company-wide agreements—clearly communicated; in the case of employment contracts, with the employee’s consent; and in the case of works council agreements, in consultation with the works council.

Conclusion

The benefit plan is the unassuming yet stabilizing framework of every company health insurance plan. It takes just a few hours to draft—usually with legal assistance—and subsequently saves years of debate, reduces the risk of litigation, and eliminates operational uncertainty. Employers introducing a company health insurance plan should not treat it as an optional add-on, but rather incorporate it into their planning from the outset as part of the implementation phase.

Related terms

Employer contribution
The employer contribution refers to the employer’s financial contribution toward the supplementary health insurance premium. In most supplementary health insurance plans, the employer covers 100 percent of the premium; hybrid models that include an employee copayment are more complex from both an operational and a tax perspective.
Employer contribution
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Group contract
A group policy covers multiple insured individuals under a single insurance contract with more favorable terms. In supplementary health insurance (bKV), the group policy is the standard structure: the employer is the policyholder, and the employees are the insured individuals.
Group contract
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Family Plan
The Family Option allows family members—usually a spouse and children—to be covered under the employee’s supplementary health insurance plan. Depending on the provider and plan, coverage may be fully funded by the employer, partially funded, or available as a self-pay option.
Family Plan
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Related terms

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