Private health insurance: What counts as salary?
 

The basis for these calculations is the gross annual salary you regularly receive, as stated in your employment contract. If you are employed by several businesses, you can total up these salaries. However, mini-jobs do not count. There are two types of mini-job. The first is a job in which you earn less than €520 per month. The second is a job you perform for less than 3 months or a total of 70 days per calendar year.

What else can you add to your gross annual income?

• Regular Christmas bonuses and vacation pay
• Retroactive salary increases (paid in the year in which you became eligible)
• Capital-forming benefits
• Non-cash benefit for a car
• Secure profit sharing
• Additional pay for shift work and on-call hours
• Flat-rate overtime payments
• Performance-related bonuses subject to a guaranteed minimum amount (variable bonuses don’t count!)

Of course, some of these points aren’t set in stone. If you’re now feverishly crunching the numbers and wondering whether you’re over the income threshold for private health insurance, don’t worry – you have a little wiggle room. For example, you might be used to having every hour of overtime paid individually rather than as regular pay. A solution to this might be asking your employer to pay you for your overtime at a flat rate.

Plus, you could take this as an opportunity to ask for a raise. Alternatively, might your employer be willing to offer you vacation pay if you haven’t received any to date?

What doesn’t count as income in the context of private health insurance

• Rental income
• Capital gains, such as stock market profits
• Pensions
• Maintenance payments (i.e. alimony)
• Income from freelance/part-time work alongside your main job
• Family allowance payments
• Income not subject to income tax
• Continued pay
• Maternity allowance or short-time working benefits
• Allowance for direct insurance
• Gifts
• Parental allowance or child benefits

Moms and dads to be might be wondering why parental allowance payments don’t count as income. Does it mean that parents could quickly slip below the income threshold, which is so important for private health insurance? Let’s look at an example.

What would happen if my income slipped below the income threshold for private health insurance?

Today, few people’s careers follow a linear path. Two months of parental leave here, three months of unemployment there – and maybe even a sabbatical along the way, too. If your income temporarily slips below the income threshold, it doesn’t necessarily mean you will have to give up your private health insurance – provided that you know what action to take to keep it!

Income, parental leave, and private health insurance

Let’s say your partner is pregnant and you’d like to take two months’ parental leave. For these two months, you’ll receive a parental allowance – but that doesn’t count as income. If you fall below the private insurance income threshold because you take parental leave, in the strictest interpretation of the rules, you should switch to public health insurance. However, because such a short-term switch wouldn’t make much sense, you can submit an exemption request to a public health insurance provider. You can do this by contacting the public insurance provider with whom you were most recently insured.

Below the income threshold due to unemployment

In most cases, unemployment is only a brief interruption in a person’s career. You can keep your private health insurance while unemployed provided that you’ve already had private insurance for at least five years. Otherwise, you will have to switch to public health insurance. People aged 55 or older are an exception to this rule, as they usually have to stay in the private health insurance system.


 

What if you fall below the income threshold due to a sabbatical?

If you income falls below the current threshold for private insurance because you’ve taken a sabbatical from work, you must take out public health insurance for the duration of your leave. However, you can also pause your private insurance premiums and benefits and take out a small prospective entitlement (called a kleine Anwartschaft). This allows you to return to the private health insurance system as soon as you return to your job – without having to undergo another health examination!

Our Conclusion:

Taking out private health insurance is a major life decision. Once you enter the private system, you will probably remain privately insured for the rest of your life. Short interruptions like parental leave and brief spells of unemployment are unlikely to change that. Plus, well-off employees are unlikely to give too much thought to future increases in the income threshold for private health insurance. This makes it all the more important that you think carefully about private health insurance before making your final decision.