No reduction due to subsidies from a bonus programme
Statutory health insurance funds often offer their customers bonus programmes for health-conscious behaviour under section 65a SGB V and pay cash bonuses for this. The health insurance funds can decide for themselves which services are rewarded, e.g. preventive medical check-ups, vaccinations, healthy eating, sporting activities, etc.
In 2016, the Federal Fiscal Court clarified that the deduction for special expenses for health insurance contributions is not to be reduced by bonus payments for health-conscious behaviour under section 65a SGB V made by health insurance funds as part of a "bonus programme". The bonus payment does not constitute a reimbursement of health insurance contributions paid and therefore does not reduce the deduction for special expenses. In addition, the bonus payment is tax-free (BFH ruling of 01.06.2016, X R 17/15).
The tax authorities do apply the BFH ruling, but interpret it narrowly (BMF letter of 06.12.2016, BStBl 2016 I page 1426). This has led to further questions of doubt. For example, the tax authorities are of the opinion that (flat-rate) bonus payments for visiting fitness studios should continue to reduce the deduction for special expenses.
The Federal Fiscal Court has now issued the following positive ruling: A cash bonus (bonus) granted by a statutory health insurance fund for health-conscious behaviour does not reduce the deduction for special expenses for health insurance contributions, provided that this compensates for a financial expense incurred by the taxpayer in whole or in part. This also applies in cases where the bonus is determined on a flat-rate basis (BFH ruling of 06.05.2020, X R 16/18 and X R 30/18).
The case: The plaintiff, who was legally insured, received bonuses totalling 230 Euro from his health insurance company for "health-conscious behaviour", including a health check-up, a dental check-up, membership of a fitness studio and sports club, and proof of a healthy body weight. The tax office treated the bonuses as a reimbursement of health insurance contributions due to their purely flat-rate payment and reduced the plaintiff's deduction for special expenses. In contrast, the tax court regarded the payments as benefits from the health insurance fund that neither affected the special expenses nor triggered a tax burden as other income.
In its decision, in which it further developed its previous case law on the tax treatment of bonus payments under section 65a of the Fifth Book of the Social Code (see above: judgment of 01.06.2016, X R 17/15, BStBl II 2016, 989), the BFH takes a differentiated view. According to this, bonuses that do not require specific proof of prior expenditure by the taxpayer for a particular health measure, but are only granted on a flat-rate basis, also do not reduce the deduction for special expenses. They are also not considered a tax-relevant benefit from the health insurance fund.
However, it is still a prerequisite that the measure supported in each case incurs costs for the taxpayer and that the flat rate paid, which is realistically designed, is suitable to compensate for the taxpayer's own expenses in whole or in part. If, on the other hand, the taxpayer takes advantage of preventive measures that are covered by basic health insurance (e.g. vaccinations, dental check-ups), there are no own expenses that could be compensated by a bonus. In this case, there is a reimbursement of contributions by the health insurance fund that reduces the deduction for special expenses. The same applies to bonuses paid for proof of behaviour or abstention that is independent of expenditure (e.g. healthy body weight, non-smoking status).
Tip: In cases where payments are not considered as contribution refunds, care should be taken to ensure that the deduction for special expenses is not reduced. Although this should happen automatically due to the corresponding transmissions from the health insurance companies, unfortunately not all data is still correctly transmitted by the health insurance companies to the tax offices. Ultimately, this means that you must check which data is available to the tax office, i.e. whether the bonus payments have been classified as contribution refunds - or not.
Lohnsteuer kompakt
Currently, the Federal Fiscal Court has ruled that bonus payments from private health insurance "to promote cost-conscious behaviour" are to be regarded as a refund of contributions and therefore reduce the deductible special expenses if the bonuses are paid regardless of whether the policyholder has incurred financial health expenses or not (BFH ruling of 16.12.2020, X R 31/19).
The case: A private health insurance company grants a bonus of 30 Euro per insured person for each insured month, up to a maximum of 360 Euro per year. If invoices are submitted for reimbursement, the entire annual bonus of 360 Euro is offset against the reimbursement amount. This agreement is comparable to an "excess". And for a contractually agreed "excess", the BFH has clarified that the expenses incurred as a result are not deductible as "health insurance contributions" within the framework of special expenses (BFH ruling of 06.06.2018, X R 41/17).
According to the BFH, the bonuses in this case do not constitute benefits from the health insurance company that are independent of the insurance contributions. Rather, they continuously reduce the premium payments. The monthly payments of 30 Euro per insured person, referred to as a bonus, are made regardless of whether the insured person has incurred reimbursable health expenses or not.
The bonus payments are not comparable to bonuses that can be paid by statutory health insurance funds in accordance with section 65a SGB V. While the aim there is to create incentives for policyholders to adopt health-conscious behaviour, the bonus scheme in question aims to encourage policyholders to adopt cost-conscious or even cost-avoiding behaviour. This is because the policyholder retains the bonuses to the extent that their generally reimbursable health expenses are less than 360 Euro per year. The agreement thus creates an incentive, comparable to a "classic" refund of contributions, to ensure that the insurance company does not have to provide contractually agreed benefits because the policyholder has either not suffered an insured loss or does not claim the resulting expenses. The policyholder receives the bonus because they do not claim the insurance up to an amount of 360 Euro, i.e. they bear the economic risk for health expenses themselves to this extent.
(2021): No reduction due to subsidies from a bonus programme
Which health and nursing insurance contributions can I claim?
Since 2010, you can enter your full health and nursing insurance contributions for basic cover as special expenses in your tax return. The tax office deducts only four per cent for sickness benefit from the contributions paid to statutory health insurance.
For those privately insured: Costs for health and nursing insurance are only recognised up to the basic contribution of the private health insurance. Optional benefits, such as treatment by the head physician or a two-bed room in hospital, are considered under "other insurance contributions" if there is still room within the deductible maximum amount.
If you have a more comprehensive contract, the private health insurance will determine the exact share of basic cover. If you do not exceed the maximum amount of 1.900 Euro (self-employed 2.800 Euro) with your health insurance contributions, you can still claim contributions for other insurances. Favourable contributions include those for unemployment insurance, additional health or nursing insurance, private disability insurance, accident or liability insurance, or term life insurance. Endowment and pension insurance policies can be considered as special expenses if the policies were taken out before 2005.
Beispiel
A married couple pays a total of 4.600 Euro in contributions for health and nursing insurance in a year, without sickness benefit. This means the contributions exceed the joint maximum amount of 3.800 Euro (twice 1.900 Euro). Nevertheless, they are deductible as special expenses to this extent, but further insurance contributions, such as accident or motor liability insurance, can no longer be deducted.
As the general contribution rate for those with statutory insurance covers sickness benefit, the contributions are reduced by 4% as a lump sum. The reduction only applies if there is an entitlement to sickness benefit in the event of illness. The reduction is made by the tax office. Until 2014, the reduction did not apply to the income-independent additional contribution. Since 2015, the following legal situation applies: The newly designed fund-specific income-dependent additional contribution is now considered an integral part of the health insurance contribution and is therefore included in the assessment basis for determining the four per cent reduction amount. The contribution is no longer differentiated into a basic contribution and the additional contribution.
(2021): Which health and nursing insurance contributions can I claim?
