– Liability traps and gaps in coverage in the daily sickness benefit insurance –
In its ruling of July 6, 2016 (Case No. IV ZR 44/15), the Federal Court of Justice decided that regulations in the model terms and conditions (Section 4 IV MB/KT 2009) which regulated a compulsory reduction of the insured daily sickness allowance with private insurers (VR) due to reduced income are intransparent and thus invalid, Section 307 I 1 BGB.
Insurer used net income as the basis for the level of benefits
Even today, BoDs are still based on net income according to tax assessment, plus health and long-term care insurance premiums, minus income tax.
The lower court said: “The clause also allows the insurance benefits to be gradually reduced to zero if net income falls solely due to incapacity for work. The policyholder thereby loses the protection which he had intended to achieve through his premium payment.“.
Lack of transparency in income assessment for the amount of private daily sickness benefit
There are uncertainties for policyholders (UN) with regard to the question of which assessment date or period determines the amount of the daily sickness benefit (KTG), how the comparison should be made with a possibly reduced net income, and how this is composed in the case of the self-employed UN. The term “income” is already found in various laws with different meanings (e.g. SGB, EStG, ZPO).
Even today, many a board of directors ignores the above BGH decision in the case of a claim. Others, on the other hand, not only waive their right to terminate the contract, but also to subsequent reductions. To this day, boards of directors define the concept of income in very different ways, as well as their own obligation to provide benefits (e.g. in the case of maternity leave). Since the “Heil- und Hilfsmittelgesetz” (Law on Therapeutic Products and Medical Devices) came into force in 2017, self-employed women are also entitled to the KTG during the maternity protection periods, § 192 V 2 VVG.
Retrospective loss of benefits for daily sickness allowance
In the case of rehabilitation, KTG must be paid (LG Hildesheim, judgement of 05.07.2005, ref. 3 O 114/05). In the event of occupational disability (BU), the KTG may be discontinued retroactively (BGH, ruling of 20.06.2012, ref. IV ZR 141/11) – in the case decided, however, the private medical opinion of the BoD was incorrect, so that the BoD had to make an additional payment.
In the statutory health insurance (GKV), the amount of sickness benefit is based on current income – without increase through continued (special) depreciation (BSG, judgement of 06.11.2008, ref. B 1 KR 28/07), because the income under tax law is decisive.
Necessity of private commissioning of expert opinions and experts
Most of the UN only becomes aware in the event of a dispute or damage that its own private experts or private medical and actuarial experts must first be paid in advance and remunerated. If the UN only submits a certificate of incapacity to work, in case of doubt he is not (yet) entitled to a KTG, because this is not “full proof” in the sense of § 286 ZPO (OLG Koblenz, Az. 10 U 230/07, judgement of 24.10.2008).
A classic example for experts and employees is the frequent refusal of performance by the employers’ liability insurance associations in the case of occupational diseases. If the causal connection between occupational cause and clinical picture is disputed, private experts are needed to detect “organised misrepresentation”, for example by doctors on call. Certain “leaflets” described occupational illnesses as fateful and not work-related; social policy expert Blüm branded this: “I can only feel disgust at the human baseness of such career care.
Tax exemption of daily sickness benefit
The premiums, as well as the benefits at the KTG, are not tax-relevant, which is why only the net income has to be secured.
Daily sickness benefit even without an uninterrupted employment relationship?
The BGH had already judged the clause which required the uninterrupted existence of an employment relationship for the KTG payment to be invalid (ruling of 27 February 2008, ref. IV ZR 219/06), § 307 II No.2 BGB. However, the insurability and thus the KTG will cease to apply if the UN no longer wishes to take up a new activity or if it can be determined on the basis of objective circumstances that serious efforts to find a job will remain permanently unsuccessful after the end of the AU. In this case, a pension for reduced earning capacity or occupational disability insurance would be a possible replacement. However, mere unemployment does not justify the KTG’s suspension of payments (BGH, ruling of 27.02.2008, ref. IV ZR 219/06).
In the case of mental illness due to mobbing, the board of directors must also pay compensation (LG Köln, Az. 23 O 364/14, judgement of 14.12.2016), even if the incapacity for work could be terminated by a change of job.
Daily sickness benefit for reintegration measures?
The BGH (ruling of 11.03.2015, file no. IV ZR 54/14) decided that in the event of reintegration – even without pay but with sickness benefit from the statutory health insurance scheme – the entitlement to KTG from private health insurance (PKV) no longer applies. The KTG is also not applicable (possibly on a daily basis) if a self-employed person actually works on an hourly basis (e.g. from a sickbed). Exactly the opposite was claimed by some agents, who praised the single room as a guarantee of professional discretion.
Only if the AU is complete is there a claim to KTG (BGH, ruling of 3 April 2013, ref. IV ZR 239/11), but the BoD cannot refer to “residual performance capabilities” if these appear to be exempt in isolation for the exercise of the profession.
Daily sickness benefit from the statutory health insurance scheme for stays abroad?
The Social Court of Karlsruhe (SG, judgement of 20.02.2018, file no. S 4 KR 2398/17) decided that in the case of an AU certified without interruption and the consent of the physician to the stay abroad, the SHI continues to pay the sickness benefit.
Alternatively, the health insurance company can also approve the stay abroad – usually after an assessment by the MDK – so that the legal claim to KTG does not rest in the meantime, § 16 IV SGB V. Insofar as the insured person takes precautions by means of a specialist opinion, the GKV will have to exercise its discretion dutifully, despite the different opinion of the MDK (SG Mainz, judgement of 12.11.2010). If the AU lasts beyond the stay abroad, the discretion of the SHI system is reduced to “zero” (LSG NRW, judgement of 28.07.2015, ref. L 5 KR 292/14).
In the SHI system, backdating of the AU is currently possible for up to two days – the benefit is 90% of the last net income or 70% of the last gross salary; the lower amount counts. However, the sick leave can be “until further notice”, so that it continues to apply even if the employee moves abroad (LSG Rheinland-Pfalz, judgement of 06.07.2017, Ref. L 5 KR 135/16). There is also inevitably a gap for the higher earning SHI insured, which could be closed by a KTG of the private insurance industry.
Daily sickness allowance of the private health insurance for a stay abroad?
The model conditions allow special agreements to be made for foreign countries. Many – but not all – BoDs have generally committed themselves to provide unlimited coverage, for example when the MB/KT state “In deviation from § 1 paras. 6 and 7 MB/KT 2009, the insurance cover applies worldwide without special agreement”.
Insurance tax through transfer of residence
While no insurance tax (on premiums) is levied on German private health insurance, this is often different in other countries (including EU countries). Debtor of the tax (often on payments) is the UN, it is paid by the BoD. Decisive factors are, for example, the place of residence or the question of where the risk is located (ECJ, judgment of 21.02.2013, Case C-243/11). The amount varies depending on the type of contract. Evasion of insurance tax and, due to the extent of the problem, money laundering is more frequent if foreign VR operate a branch in Germany without notifying BaFin – or if foreign VR sell their non-life insurance policies to commercial end customers on a cross-border basis under the freedom to provide services.
Documentation obligations of the intermediary
It is difficult to provide credible evidence of the fulfilment of obligations to provide advice and information by means of forms with gaps and checkboxes.
First of all, the KTG must (also) comply with the obligation to determine needs, which involves determining the gross and net income of the future UN in order to arrive at a daily requirement to be secured. In case of doubt, the intermediary will have to refer to documents on salary or income, and to make a calculation of the KTG amount.
The UN should then be advised to set the KTG at a level appropriate to its needs. At best, the mediator will document any restrictions of the future UN and have them clearly visible, unless the protection of daily sickness benefits is to be comprehensive. The UN could be so wealthy that it is partly “self-insured” or even receive sickness benefits from its statutory health insurance scheme.
In case of recognizable misunderstandings or if misunderstandings are to be expected due to a complex matter, further information and advice must be given to the future UN (OLG Celle, judgement of 07.02.2008, Az. 8 U 189/07). The possible reference to the UN to critically reconsider the amount of the desired KTG itself is insufficient for this purpose. This applies all the more if there is a change from statutory to private health insurance. This is due to the complexity of the undertaking (BGH, Ref. III ZR 544/13) including the possible associated gaps in coverage – where the SHI would have provided more or all of the benefits than the private health insurance.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.experten.de (published in ExpertenReport 03/2019, pages 56-58)
www.experten.de (published on 29.03.2019 under the heading: Liability traps and gaps in coverage in daily sickness benefit insurance)
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PhD, MBA, MM
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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