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Premiums for German private health plans may rise significantly

A number of private health funds in Germany have indicated that they will have to raise premiums by as much as 30% to 40% for certain plans in 2012. This could affect employers, since they are required to pay a portion of the premiums for employees who purchase a private medical insurance plan from a German health insurance company that provides a certificate recognized by the German government (Arbeitgeberbescheinigung). Employers are required to pay half the monthly cost of private health insurance up to one half of the average total contribution to the statutory fund, which is currently 15.5% (7.2% for employers and 8.3% for employees). The annual contribution ceiling for statutory medical and sickness coverage is set at EUR 45,900 for both East and West Germany. All employed persons with annual gross earnings below EUR 50,850 are able to opt out of the mandatory health system and sign up for private insurance.

A number of private health funds in Germany have indicated that they will have to raise premiums by as much as 30% to 40% for certain plans in 2012.

Premiums for private health insurance are calculated on the basis of age, health status, and coverage, among other factors. As of 21 December 2012, gender will no longer be a factor for calculating the premiums according to the European Court of Justice (ECJ) ruling from 1 March 2011 in case C-236/09, concerning equal treatment of men and women in access to goods and services. This ruling will not affect insurance plans concluded prior to 21 December 2012.

Based on paragraph 204, section 1 of the Insurance Contracts Act (Versicherungsvertragsgesetz ), an insured individual is entitled to change plans within the same insurance company if the new plan delivers the same level of coverage as the old plan. In most cases, a new health assessment determining the premium is not necessary.

BACKGROUND
The Insurance Contracts Act (Versicherungsvertragsgesetz) requires all private insurers to offer a basic coverage (Basistarif) comparable to that of the statutory system. This coverage must be made available to anyone eligible to be privately insured and at the same cost as the premiums charged by the statutory funds. Eligibility for basic coverage and its benefit provisions cannot be restricted because of the individualÂ’s health status or pre-existing conditions.

A law effective 1 January 2010 grants a full tax exemption for private basic health insurance coverage premiums. Previously, up to EUR 1,500 was deductible for the privately insured who received subsidies, such as employer-provided benefits. The deductible amount for insured who bore the total cost was EUR 2,500.

Date: 12/01/2012
Source: AETNA International Healthcare News (provided by IBIS Advisors)
Link: http://aetnaglobalbenefitsmarketing.com/AGBEmail/ibis_news/ibis_news_0112.html

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