Academic journal article Social Security Bulletin

Germany Offers Sickness Plan Choice

Academic journal article Social Security Bulletin

Germany Offers Sickness Plan Choice

Article excerpt

Beginning January 1, 1996, the 50 million members in the approximately 1,600 statutory sickness plans will be allowed to choose which plan they wish to join. These independent plans were set up over the years according to industry, trade, by local government jurisdiction, or by some large employers directly. Such plans are the cornerstones of Germany's system of health care and sickness insurance. Until now, membership has been determined by type or place of employment or by the member's residence.

The first to be allowed to choose were persons voluntarily insured by a statutory scheme, most of whom were exempt from compulsory coverage due to earnings above the contribution maximum (DM 5,850 per month in the west and DM 4,800 in the former East Germany--about US$3,975 and US$3,460, respectively). These persons were required to make their choice 2 months before the change became effective on October 31, 1995, to get the first possible effective date. Afterwards, these persons may change plans at anytime with a 2-month advance notice. Compulsorily insured workers have less flexibility--they must give a 3-month notice and then must remain with the new plan for a minimum of 1 year. There are numerous exceptions, for example, white-collar workers may make the choice with a 2-month notice until January 1, 1996. Also, regardless of the plan chosen, the contribution rates for students and pensioners will not be affected.

Although some 90 percent of the benefits are statutorily mandated, there are special benefits that are not mandated by law and are unique to each plan. …

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