Additional burdens for the employer with PKV-insured employees
Do employees with private health insurance have a right under employment law to a contribution subsidy for private health insurance from their employer? And if so, under what conditions? And there’s also the question of how the employer contribution is taxable.
By decision of the Federal Social Court (BSG) of 20.03.2013 (case no. B 12 KR 4/11 R) it was clarified that only family members of dependent employees insured in the private health insurance (PKV) have a claim under labour law for a contribution subsidy by the employer pursuant to § 257 SGB V. The employer is entitled to a contribution subsidy pursuant to § 257 SGB V. On the other hand, the BSG clarified that there is no entitlement to a subsidy if the family member is insured in the statutory health insurance (GKV).
In addition, it is assumed that the family member would be covered by the family insurance free of charge if the employee were insured in the statutory health insurance (GKV). For full-time self-employed family members or family members entitled to benefits, there is therefore no entitlement to the employer’s allowance, even if they are insured in the private health insurance scheme. The BSG left open the question of whether it must also be assumed that the family member is also insured with the employee in the same PKV contract – as some courts have demanded.
Tax liability of the employer due to voluntary contribution allowance
Only in this case, i.e. in the case of family members insured under private health insurance, is the allowance tax-exempt in accordance with § 3 No. 62. Income tax. Voluntary contributions to the GKV by the employer are in any case taxable wages.
Since payroll offices usually do not pay attention to these subtleties, it happens that employers later find themselves accused of tax evasion.
Consequences for PKV-insured employees, and those who want to become one
For privately insured men it is often only apparently cheaper to insure the (possibly not already compulsorily insured) wife or also the children (if they have no claim to non-contributory family insurance with the mother), instead of also privately rather voluntarily in the GKV. In the case of the children (as well as the wife), this can also be due to the fact that the private insurer demands risk surcharges or only offers the basic tariff at the maximum premium. Many intermediaries only pay attention to the contributions when making their recommendation because they have assumed up to now that the privately insured person will also receive this for contributions of family members to the GKV up to the maximum contribution subsidy. This is now proving to be false.
Liability of intermediaries and insurers
The consequence of this misjudgement is the possible liability of the intermediary or also – due to his duty to advise and liability according to the German law – the liability of the broker. § Section 6 of the German Insurance Contract Act (VVG) – of the insurer recognising a need for advice for additional expenditure due to the lack of an employer’s contribution. Liability can also arise for the additional expense contrary to the initially advertised premium savings by switching only the husband to private health insurance – with voluntary continued insurance of the wife or children in the GKV – compared to a complete retention of all in the GKV. Damage can also only arise in the future due to the different premium development in private health insurance and statutory health insurance, which will regularly require an actuarial expert opinion to substantiate the claim.
Employer’s liability: Subsequent duties of disclosure, also to mitigate damages
There is a need for clarification and action (for insurers, intermediaries, employees and employers) not only in the case of new switches to private health insurance, but also in ongoing cases. Employers can – at most for up to three years retrospectively – claim back the excess employee allowance paid if there was no entitlement to it under employment law.
Wage tax and social insurance are nevertheless owed for the past, whereby the employer may only withhold the employee’s share of social insurance for the three months in the past – the employer is solely liable for the period further back. If the social security audit comes to the conclusion that the non-payment of social security was (conditionally) intentional, the back payment can be demanded retroactively for up to 30 years, plus 6% interest p.a. If there is only negligence, the current year plus the four preceding years are affected, also plus 6% interest annually.
For payroll taxes, conditional intent results in liability for up to 10 years, while negligence would only result in liability for up to 5 years, and that too plus up to more than 6% interest annually. Criminal proceedings may also follow; in the case of negligence, there is a threat of a fine of up to EUR 50 thousand simply because of the unpaid or undeclared income taxes.
Calculation of the wage tax for “net” paid wages:
In this case, the wage tax to be borne by the employer on the employer’s allowance paid only voluntarily as well as the social insurance to be borne on it also represent a fictitious gross wage component which is to be taken into account in the assessment of the wage tax and social insurance to be paid subsequently by the employer, if necessary years retroactively and with late payment penalties.
By the way: The GKV often notices only after years that the children are no longer insured with the mother free of charge in the family insurance due to the change of the father to the PKV in the meantime – the contributions for the voluntary insurance of the children are then raised subsequently, quite also up to more than 10,000 EUR altogether. The chance to insure them more favourably in private health insurance with an employer’s allowance is then lost for the past, and in the case of pre-existing conditions in the meantime also questionable for the future.
This also presents a liability problem for intermediaries and insurers. The health insurance company can also be liable in the case of corresponding consulting opportunities, because many health insurance companies have now obtained a broker’s license for brokering private supplementary insurance policies for their members. It is true that only the broker, but not the agent, is obliged to give advice, but if the agent actually advises, for example, to remain in the GKV or even calculates something in this respect, this must also be correct. This is because incorrect advice is not admissible even if there was no duty to advise in the first place.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.experten.de (published Jan 12, 2015 on expert-platform)
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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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