Which health and nursing care insurance contributions are deductible?
Contributions to health and nursing care insurance can be deducted as special expenses in the tax return – but only for the so-called basic cover.
For those with statutory insurance, the tax office reduces the contribution by 4% as this portion covers sickness benefit. The reduction is applied only if there is an entitlement to sickness benefit.
Privately insured individuals can also only deduct the basic contribution. Optional benefits (e.g. treatment by a head physician, two-bed room) are not included. They are only deductible as other pension expenses if the maximum amount has not been exhausted.
Maximum amounts for other pension expenses:
- 1.900 Euro per year for employees and pensioners
- 2.800 Euro per year for self-employed
As long as these amounts are not exceeded, other insurances can also be claimed – e.g. unemployment, liability, accident or disability insurance.
Example: A married couple pays a total of 4.600 Euro in contributions to health and nursing care insurance. As this is basic cover, the full contributions are deductible – even if they exceed the joint maximum amount of 3.800 Euro (2 × 1.900 Euro). Further insurances can then no longer be considered.
Which health and nursing care insurance contributions are deductible?
How are excesses in health insurance taken into account for tax purposes?
Individuals with private health insurance often pay medical bills up to a certain amount out of their own pocket to preserve the premium refund, which can often amount to up to six months' premiums. Although the premium refund reduces the deductible insurance premiums for the special expenses deduction, resulting in a lower tax saving.
However, many believe this disadvantage can be offset by claiming the self-borne medical expenses as extraordinary expenses according to § 33 EStG, thereby achieving a corresponding tax saving.
Medical expenses borne by the individual due to a tariff-based deductible or the choice of a premium refund are not "contributions" to health insurance and therefore cannot be deducted as special expenses (BMF letter dated 19.8.2013, BStBl. 2013 I p. 1087, para. 69). The BFH has also confirmed that self-borne costs in the event of illness do not constitute insurance contributions and cannot be deducted as special expenses.
These are not "contributions" to health insurance. Rather, they are medical expenses and can only be claimed as extraordinary expenses according to § 33 EStG (BFH ruling of 1.6.2016, X R 43/14).
Medical expenses borne by yourself are medical costs and can therefore only be deducted as extraordinary expenses according to § 33 EStG. However, there is a restriction: they do not have a tax-reducing effect up to the amount of the reasonable burden.
This reasonable burden depends on your income, the number of children, your marital status and amounts to between 1 and 7% of the total income. It is therefore generally higher than the anticipated premium refund from the health insurance and the corresponding self-borne medical expenses.
This means: Medical expenses up to the deductible are neither deductible as special expenses nor as extraordinary expenses.
How are excesses in health insurance taken into account for tax purposes?
Can employer subsidies be fully credited towards the basic contributions?
Contributions to basic health insurance and compulsory nursing care insurance have been fully deductible as special expenses since 2010. However, those who receive tax-free subsidies from their employer as privately insured individuals must have these credited.
According to the tax authorities, the subsidies are always fully allocated to the basic health insurance and only reduce these contributions. This applies even if optional benefits are included (§ 10 para. 2 no. 1 EStG).
Since the employer's contribution also applies to contributions for optional and comfort services, it would be plausible to allocate it according to the composition of the contributions to basic and comfort insurance. This would mean that the self-paid contribution share for basic coverage is higher and consequently the tax saving is greater. The question, therefore, is whether tax-free employer subsidies for private health insurance should be fully or partially credited to basic coverage.
The Federal Fiscal Court has confirmed the practice of the tax offices: The tax office may fully credit the tax-free employer subsidy to the contributions for basic coverage, even if the insurance contract includes optional and comfort services. The subsidy does not have to be proportionally divided between basic and optional services (BFH ruling of 2.9.2014, IX R 43/13).
Can employer subsidies be fully credited towards the basic contributions?
