Company health insurance definition: your comprehensive guide for 2025
16.05.25
12
Minutes
Katrin Straub
Managing Director at nextsure
Are you looking for ways to increase your company’s appeal while also promoting the health of your employees? Company health insurance (bKV) offers an excellent solution for this. This article explains the definition of company health insurance and shows you how to make the best use of this tool.
The topic in brief and concise terms
Company health insurance (bKV) is an additional insurance policy funded by the employer that offers employees better health protection and increases the employer's attractiveness.
Contributions to company health insurance can be tax-free and exempt from social security contributions up to €50 per month per employee as a benefit in kind.
Important benefits for employees include access to private patient benefits, often without a health check or waiting periods.
What exactly is company health insurance?
The company health insurance definition describes additional health insurance organised by the employer. It is taken out as a group policy for employees. This voluntary employee benefit significantly enhances the company’s attractiveness. The employer usually pays the premiums, which can be deducted as business expenses. Employees often enjoy immediate cover without a health check. This makes bKV a valuable component of HR policy.
Maximising benefits: The value for employers
Companies increase their attractiveness by up to 79 per cent with bKV. This is a clear competitive advantage when recruiting skilled workers. Employee retention is strengthened and satisfaction increases. Fewer sick days and higher productivity are often the result. Contributions can be claimed as business expenses for tax purposes. Administrative effort is usually low thanks to digital portals. A company pension scheme can be a useful complement to bKV.
Employers benefit from:
Increase in employer attractiveness by over 50 per cent.
Reduction in staff turnover by up to 50 per cent.
Improvement of the company image as a socially responsible employer.
Ability to deduct contributions as business expenses.
Low administrative effort thanks to digital administration.
These advantages make bKV a strategic investment in human capital.
More health protection: The benefits for employees
Employees gain access through supplementary company health insurance (bKV) to benefits similar to those of a private patient. This closes gaps in statutory health insurance. Health checks and waiting periods are often waived, which enables immediate cover. This is particularly valuable in the case of pre-existing conditions. The employer usually covers the contributions. Family members can often be co-insured on favourable terms.
The most common benefits include:
Covering the costs of dentures and dental treatment.
Subsidies for visual aids such as glasses and contact lenses.
Services for alternative practitioners and alternative medicine.
Better accommodation in hospital, e.g. a two-bed room.
Faster specialist appointments through special services.
These additional benefits significantly improve medical care.
Calculating costs: What do companies invest?
Costs for a bKV vary depending on the scope of benefits and provider. Monthly contributions per employee are often between ten and 50 euros. Budget tariffs offer flexibility; here, an annual budget per employee is available. A budget of 600 euros per year can, for example, cost around 30 euros a month. The expenses are tax-deductible as business expenses. Some providers already offer a bKV for as few as three employees. The supplementary health insurance as a bKV is therefore also of interest to smaller businesses.
Understanding tax aspects: benefits in kind and exemption limits
Contributions to bKV are often treated for tax purposes as a non-cash benefit. Up to an exemption threshold of EUR 50 per month and employee, these are exempt from tax and social security contributions. The requirement is that the employer is the policyholder and pays the contributions directly. If the value, including other non-cash benefits, exceeds this EUR 50 threshold, the entire amount becomes taxable. A detailed review of the individual situation is therefore essential. Alternatively, there are models such as flat-rate taxation under Sections 37b or 40 of the German Income Tax Act (EStG). This provides tax-efficient support for employees' health and care.
There are various taxation models if the non-cash benefit exemption threshold is exceeded:
Net salary taxation: The employer bears all taxes and social security contributions.
Individual taxation: The bKV contribution is added to the gross salary.
Flat-rate taxation under Section 40(1) of the EStG: An average tax rate is applied.
Flat-rate taxation under Section 37b of the EStG: A flat tax rate of 30 per cent is charged.
The choice of model should be agreed with a tax adviser.
Master legal frameworks and contract drafting
The company health insurance (bKV) is based on a group insurance contract between the employer and the insurer. The employer is the policyholder, and the employees are the insured persons. The General Equal Treatment Act (AGG) must be taken into account when structuring it. Excluding certain employee groups (e.g. mini-jobbers) can be legally problematic. The employer's commitment and the insurance contract must match. When an employee leaves, the bKV cover via the employer usually ends. However, many insurers offer continued private cover without a new health declaration. A sickness benefit insurance can also be part of the bKV.
A company uses the bKV to differentiate itself in the labour market and offers different benefit packages. A craft business uses the bKV to reduce downtime. Faster appointments with specialists are an important component here. Even small businesses with as few as five employees can implement bKV. The flexibility of the tariffs, such as budget or modular models, enables tailor-made solutions. The private health insurance can be supplemented with bKV components.
Typical benefit components in practice include:
Dental prosthetics (e.g. 70 to 90 per cent cost reimbursement).
Visual aids (e.g. up to 300 euros per year).
Preventive examinations (e.g. extended cancer screening).
Alternative treatment methods (e.g. osteopathy).
Inpatient additional benefits (e.g. single or two-bed room).
Travel health insurance for trips abroad.
These examples show the many possible uses of bKV.
Expert tips for the optimal design of your company health insurance
Set clear objectives for introducing corporate health insurance. Involve your employees in selecting the benefits to meet their needs. Carefully compare offers from different insurers; the differences can be significant. Pay attention to the conditions for continuing the contract when an employee leaves. Communicate the benefits of bKV actively to your workforce. Make use of digital administration to reduce the workload. A clear corporate health insurance definition helps everyone involved understand the concept.
Our expert tip: Check regularly whether the selected bKV modules still meet the needs of your employees and your company. An annual review can be worthwhile.
Your next step towards company health insurance
Company health insurance is a powerful tool for employee retention and motivation. It offers numerous benefits for employers and employees. With careful planning and the selection of the right provider, you can maximise the positive effects. The definition of company health insurance is the first step towards understanding this valuable benefit. Take the opportunity to position your company as an attractive employer and promote your employees' health in the long term. Also consider combining it with company pension scheme to create a comprehensive retirement package.
Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive specific recommendations for optimisation.
More useful links
Wikipedia provides a comprehensive overview of company health insurance.
The Association of Private Health Insurance (PKV) explains its position on company health insurance.
A press release from the Association of Private Health Insurance (PKV) highlights the success of bKV as a model for better care and prevention.
The Federal Ministry of Health provides information on workplace health promotion.
The National Association of Statutory Health Insurance Funds offers information on prevention and workplace health promotion.
Destatis, the Federal Statistical Office, provides data on health insurance coverage.
Haufe offers an article on company health insurance in the context of employment law.
Haufe's topic page summarises comprehensive information on company health insurance.
FAQ
Who is the policyholder for company health insurance?
In occupational health insurance, the policyholder is usually the employer. The employees are the insured persons.
Can family members be co-insured under the bKV?
Yes, many bKV models allow family members to be co-insured at discounted rates, often with employees making their own contribution.
What happens to the bKV when you change employer?
When you change employers, insurance coverage through your previous employer ends. However, many insurers offer the option of continuing the policy privately, often without a new medical examination.
Is there a health check for company health insurance?
A major advantage of bKV is that, for employees to be included in the group contract, no health assessment or only a greatly simplified one is usually required, and there are often no waiting periods.
From how many employees is company health insurance possible?
Some providers already make it possible to take out company health insurance for small businesses with as few as three or five employees.
What benefits can a company health insurance scheme include?
Typical benefits include subsidies for dental prostheses, visual aids, preventive check-ups, alternative therapies, enhanced hospital accommodation or even sickness benefit.
