The legal basis
German law mandates that employers contribute to private health insurance premiums for their employees (§257 SGB V).
The key rule:
- Employers must pay 50% of the PKV premium
- The subsidy is capped at the amount the employer would pay for statutory insurance
- This applies to health insurance and nursing care insurance
2026 employer subsidy cap
The maximum employer contribution for 2026 is approximately:
Health insurance ~€509 + long-term care ~€105
The cap equals half the maximum GKV employer share — calculated from the assessment ceiling (BBG) times the total contribution rate (general rate + average additional rate), plus the employer's share of long-term care insurance.
If your PKV premium is below this cap, your employer pays exactly half. If above, the employer pays up to the cap.
Why this makes PKV so attractive for employees
For a young, healthy professional, a comprehensive ARAG tariff might cost €400–€600 before the subsidy.
After the employer pays 50%, the effective employee cost is often €200–€300 per month — for premium medical coverage that far exceeds what GKV provides.
Premium refunds stay with you
When you receive a premium refund (Beitragsrückerstattung) for a claim-free year, this money goes 100% to you.
The employer does not share in the refund. This creates a powerful financial incentive: your employer subsidizes premium insurance, and you receive cashback for staying healthy.
Common misconceptions
- "I lose my employer contribution if I leave GKV" — Incorrect. The subsidy is legally required for PKV too.
- "The employer subsidy is lower for PKV" — Incorrect. The calculation method differs but the maximum amount is equivalent.
- "I need HR approval to switch" — No. You inform HR after switching; they must process the subsidy by law.