Health Insurance When Starting a Business: What You Need to Know as a Self-Employed Person

Category: Start-up & Finance | Author: Daniel Schäfer | Reading time: 6 min.

You want to become self-employed – but what happens to your health insurance? Who pays the contributions? Do you have to switch to private insurance? And what many do not know: In the first months after starting your business, you can secure a valuable subsidy – if you make the right decisions at the right time.

Contents

1. The 4 phases of health insurance for founders
2. Phase 1 – Today: Statutory or private insurance
3. Phase 2 – Unemployment: Who pays your contributions?
4. Phase 3 – Starting a business from unemployment: Secure a €300 grant
5. Phase 4 – Self-employment: Statutory or private – which is worthwhile?
6. The decision between private and statutory insurance: What you need to consider in the long term
7. Conclusion and next steps

The 4 phases of health insurance for founders

Health insurance is often a blind spot for many when starting a business – yet making the right decision at the right time can save you hundreds of euros per month. The easiest way to get an overview is to break the topic down into four phases: where you are today, what happens during unemployment, what is possible when starting your business, and what comes next.

Phase 1 – Today: Statutory or private insurance

Your starting point determines your options. Are you currently statutorily insured, you have more flexibility when transitioning to self-employment – you can stay or switch. If you are already privately insured, different rules apply – especially when it comes to family members who need to be insured.

Important: In statutory health insurance, spouses and children are often co-insured free of charge. In private insurance, each person must be insured individually – which can quickly increase monthly costs significantly.

Phase 2 – Unemployment: Who pays your contributions?

If you resign from your job, are made redundant, or give up your previous self-employment and go to the job centre, the Employment Agency or Job Centre usually covers your health insurance contributions – regardless of whether you are insured under the statutory or private scheme.

This means: During this transitional phase, you do not need to worry about your health insurance. The costs will continue to be covered until you move on to the next phase.

Phase 3 – Starting a business from unemployment: Secure a €300 grant

This is the phase that many founders simply do not know about – and as a result, they miss out on real financial benefits.

If you apply for your start-up grant (Gründungszuschuss) from unemployment (ALG I) at the Employment Agency, the agency will finance your health insurance contributions for approximately 15 months – up to a maximum of €300 per month. You then use this amount to pay your health and long-term care insurance.

The same applies to the Job Centre (ALG II): Here too, health and long-term care insurance costs are covered directly for the first few months – as long as you remain eligible for support.

 Please note: If you miss or incorrectly plan this phase, you could lose up to €4,500 in grants. Seek advice in good time before submitting your application.

Phase 4 – Self-employment: Statutory or private – which is worthwhile?

Once you have set up your business, you must organise your own health insurance. You generally have three options:

Option 1 – Remain in the statutory scheme In your first year of self-employment, when your turnover is still low, statutory contributions are often surprisingly affordable – as they are based on your actual income. As your income increases, so do your contributions – but proportionally and predictably.

Option 2 – Switch to private insurance For young, healthy founders without a family, private health insurance can initially be cheaper. But caution: What costs €150 today could rise to €800 or even over €1,000 per month in ten years – and it is not easy to switch back.

Option 3 – Statutory insurance plus private supplementary insurance A frequently underestimated middle ground: You remain in the statutory scheme and add private supplementary insurance for dental treatment, alternative practitioners or other services. Additional costs of €20 to €70 per month – with significantly expanded benefits.

The decision between private and statutory insurance: What you need to consider in the long term

The decision between statutory and private health insurance is one of the most significant you will make as a founder. Here are the key points you need to know:

The 55-year rule: You can only switch from private back to statutory health insurance up to the age of 55. After that, you remain in the private scheme – regardless of how your financial situation develops.

The income threshold: Switching to private insurance is only possible once your annual gross income is approximately €60,000 to €70,000. This threshold changes annually.

Contribution development: Private contributions can increase by 10 to 30% per year over time. If you pay 200 euros today, in ten years you could be paying 600, 800 or even more than 1,000 euros – with no option to reduce your contribution.

Family situation: With children and a spouse, statutory family health insurance can be significantly more affordable than four separate private policies.

Clear recommendation: Have the figures calculated in black and white by an independent insurance advisor – for your specific situation, not in general. The wrong decision can cost you dearly for decades.

Conclusion: Plan your health insurance before starting your business – not afterwards

Health insurance is not something you can sort out after starting your business. The crucial decisions are made beforehand – especially if you are entitled to the start-up grant (Gründungszuschuss) and do not want to miss out on the 300 euro monthly subsidy.

The key points summarised: The Employment Agency and Job Centre continue to cover your contributions during the transition phase, with the start-up grant (Gründungszuschuss) you can receive a subsidy of 300 euros per month for up to 15 months, the decision between statutory and private insurance should be made individually and with a long-term perspective, and anyone who is stuck in private insurance after the age of 55 has no option to return.

If you need support with any of these questions – not just health insurance, but also preparing a bank-ready business plan and the right financing strategy – then a free initial consultation with X-Group is the right first step.

👉 Book a free initial consultation now

About X-Group

Belief in your potential and a focus on the things that truly move you forward are top priorities at X-Group GmbH in Berlin. For over 20 years, we have supported founders at every stage – from health insurance questions to the completed loan application. Certified nationwide for advisory funding programmes: 50 to 100% subsidy on consulting costs is possible.