What happens to your private health insurance if you become unemployed?

Health insurance in Germany is mandatory, and as many expats know, it’s not always cheap! So, what happens to your private health insurance in the unfortunate event that you become unemployed and are left to pay your monthly contributions without an income? With the COVID-19 pandemic fuelling unemployment across the country, this is a question that independent insurance broker KLforExpats is all too familiar with.  

In the unfortunate event that you lose your job in Germany, the key factor that affects your health insurance is whether or not you are eligible to receive unemployment benefits (Arbeitslosengeld I or ALG I) from the Federal Employment Agency (Agentur für Arbeit). 

Health insurance & Unemployment benefits in Germany

If you are privately insured and lose your job, you’ll generally be eligible for unemployment benefits as long as you have been contributing to the German social security system through your employment before it was terminated. Almost all employees in Germany have contributions to unemployment insurance automatically deducted from their salary every month. 

When you start receiving these benefits (if you are eligible), you will automatically (and mandatorily) be enrolled in the statutory health insurance system for the duration of your unemployment. 

Exceptions are made only for: 

• Those over the age of 55, who must stay with their current private insurer, regardless.
• Those who have already been privately insured for five years or more, who are free to keep their private health insurance or elect to transfer to the statutory scheme. 

If you continue with your private health insurance while you’re unemployed, part of your contribution will be subsidised by the Federal Employment Agency. 

If you are given a choice, it’s a good idea to seek the advice of your health insurance company or an independent broker to help you weigh up the pros and cons of your decision. In many cases, a job loss can mean an opportunity to reassess your health insurance options and exit any locked-in agreements that might no longer serve the needs of yourself and your family. 

Mandatory statutory health insurance for unemployed workers

In the event that you’ve not been privately insured in Germany for five years (or are below the age of 55), and therefore aren’t exempt from mandatorily enrolling into the statutory system, you still have an array of options available to you as regards your private health insurance policy: 

1. Cancel your private health insurance

Your first option is to enrol in the statutory health system fully and cancel your private health insurance contract. This is a good idea if the statutory system will serve your needs better in the long run. 

2. Pause your private health insurance

You can also put your private health insurance on pause. As soon as you find a new job, you can resume your private coverage, provided you meet the income threshold. This means you will not have to undergo a new medical assessment or be subject to higher contributions due to your age, or any new health issues that may have arisen since you signed your original agreement. 

3. Enjoy supplementary health insurance

Regardless of whether you want to cancel your private health insurance or pause it, you could still be eligible to keep a part of your private health coverage, on top of being enrolled in the statutory system, in the form of supplementary health insurance benefits. This means you could still enjoy health insurance coverage for things like preventative dental care and prosthetics, coverage for glasses and optometry, and additional quality care like enjoying a private room and treatment by a senior physician for overnight stays in a hospital. 

In any case, you get up to two months after you become unemployed to make your decision, so be sure to use that time wisely to make an informed choice! 

Blocking period in case of resignation

Another key point to note is that if you become unemployed on your own terms - in other words, if you decide to leave your employer and tender your resignation - you may be subject to a period of time (known as a blocking period or Sperrfrist) during which you will not be eligible to receive unemployment benefits. 

During this period, you will not be enrolled in the statutory system and you will not receive any health insurance subsidies from your employer or the Employment Agency. As a result, you would have to pay 100 percent of your private health insurance contributions out of your own pocket. 

The same is true if for whatever reason you are not eligible to receive unemployment benefits (ALG I).

In this situation, it’s a good idea to contact an insurance broker to discuss the options available to you with regards to switching to a more affordable health insurance plan for a short period of time. 

Would you like to know more about your health insurance options in the event of unemployment? Or are you simply looking for free advice on obtaining health insurance in Germany? Get in touch with the independent, English-speaking health insurance brokers at KLforExpats. They can offer friendly, bespoke advice for every individual. Best of all, their service is completely free. Get in touch and see how KLforExpats can help!