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Difference Between Compulsory (Pflichtversicherung) and Voluntary Statutory Health Insurance (Freiwillig Krankenversicherung)

Compulsory (Pflichtversicherung) vs. voluntary (Freiwillig Krankenversicherung) statutory health insurance

Although it is required for all persons living in Germany to have a Health Insurance, the choice between compulsory (Pflichtversicherung) and voluntary (Freiwillig Krankenversicherung) statutory health insurance, is determined by ones income limits.

Earnings for workers in Germany are separated into two cadres, the lower income limit constitutes those earning up to a figure of 54,900 euros per year. Those in the high income cadre earn 54,901 and above annually. As of 2015, it is mandatory for those in the low-income cadre to be compulsorily insured under the Statutory Health Insurance Fund. While those who get a high annual income can voluntary choose between the statutory and private insurance. Every year, the Federal Ministry of Labour redefines the income limits – the Jahresarbeitsengeltgrenze to specify the relevant insurance policy.

In addition to high income earners, civil servants and self-employed persons are exempted from the compulsory statutory insurance, regardless of their income levels. Although legally, one is free to decide on the nature of insurance, the voluntary statutory policy holders get a government subsidy of up to 80 percent on medical expenses.

 Compulsory Statutory Health Insurance (Pflichtversicherung) Voluntary Statutory Health Insurance (Freiwillig Krankenversicherung)
For whom:Everyone in GermanyOpen to high income earners, civil servants and self-employed
Income Limits:less than 54,900 euros per yearMore than 54,901 euros per year

Whether one is on a voluntary or compulsory health insurance, the contributions add up to 14.6 percent of the annual gross salary. As of 1st January 2015, private and public health insurance bodies decide on additional contributions.

This year alone, starting from the 1st of January, insurance holders are obliged to pay an additional cost of 1.1 percent from a previous average of 0.2 percent. This translates to something between a minimum of 639.38 to a maximum of 4125 euros per month, depending on an individual earnings. Employers are required to cater for at least 7.3 percent of their employees insurance premiums, the rest is payable by the insurance holder. The costs are calculated from personal annual incomes and additional levies.

Holders of a statutory health insurance can insure their family members for free, provided that the dependants do not have an income that fetches more than 450 euros per month, as in the case of those working on minijobs. The statutory or public insurance also covers children below the school going age, those in school, and unemployed spouses. Students can apply for the policy under their parents until 25 years of age or until they earn more than 450 euros per month.

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