A widespread misunderstanding
Many employees assume that switching to private health insurance means paying the entire premium themselves.
This assumption is incorrect.
German law requires employers to contribute to private health insurance premiums.
The legal framework
Employers must pay 50% of the private health insurance premium for employees.
However, the subsidy is capped at the amount the employer would pay if the employee remained in statutory insurance.
This cap is linked to the maximum GKV contribution.
What this means in practice
Because private health insurance premiums for young professionals are often below the statutory maximum contribution, the employer subsidy frequently covers a substantial portion of the premium.
This means the employee often pays significantly less than the headline premium.
An additional advantage
Premium refunds (Beitragsrückerstattung) belong entirely to the policyholder.
The employer does not receive any part of the refund — even though they contribute to the premium. The full refund amount is paid directly to the insured person.
This creates an additional financial incentive for claim-free years.
Why the subsidy is often overlooked
Many HR departments explain private health insurance only superficially.
Employees therefore often believe they would lose their employer contribution when leaving the statutory system.
In reality, the subsidy remains a legally mandated part of private insurance for employees.