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Premiums for Private Group Health Insurance
Contributions to the statutory health insurance are generally deductible as income‑related expenses. Recently the Federal Fiscal Court (BFG) dealt with the question of whether premiums for a private group health insurance taken out by a retired doctor are also tax‑deductible as income‑related expenses.
The starting point was a retired doctor who received pension income from the Medical Chamber as well as from the Social Insurance for the Self‑Employed. In addition, during his active career he made use of an “Opting-out” and joined the group health insurance of a private insurer. In the course of the employee assessment for the calendar year 2022 the doctor did not include the premiums for the “group basic insurance cover” but claimed them in a complaint.
The complaint was dismissed by the tax office as unfounded. Since there are neither compulsory contributions to pension or support schemes of the Medical Chamber nor contributions to a domestic statutory health insurance and also no contributions arising from a domestic or foreign statutory insurance obligation, the insurance premiums are not deductible as income‑related expenses.
The retired doctor, however, argued that there is a choice to take out a group health insurance instead of the statutory health insurance. In this case the premium payments into the group health insurance would replace the compulsory insurance.
Legal view of the Federal Fiscal Court (BFG)
The BFG followed the tax office’s argument. Premiums for a group health insurance constitute only income‑related expenses to the extent that they are compulsory contributions and correspond in amount to those of the statutory social insurance. Compulsory contributions to pension and support schemes of the chambers are deductible as such only if the taxpayer is obliged to make the payment. Therefore an obligatory element for the payment of the group‑insurance premiums is required. It is sufficient that the contributions are mandatorily imposed by a decision of the chamber body (in this case the Medical Chamber).
In the present case the taxpayer could not provide such a decision or any other evidence. No proof was supplied that the contributions to the group health insurance of doctors who opted out of the GSVG health insurance were mandatorily imposed by the statutes or a chamber decision of the Medical Chamber. Consequently, the premiums for the private group health insurance were not compulsory contributions and were therefore not deductible as income‑related expenses.
Tip:
If a so‑called “Opting-out” is possible for your professional group, we recommend that you obtain a tax and social‑security law review before exercising this option.
The complaint was dismissed by the tax office as unfounded. Since there are neither compulsory contributions to pension or support schemes of the Medical Chamber nor contributions to a domestic statutory health insurance and also no contributions arising from a domestic or foreign statutory insurance obligation, the insurance premiums are not deductible as income‑related expenses.
The retired doctor, however, argued that there is a choice to take out a group health insurance instead of the statutory health insurance. In this case the premium payments into the group health insurance would replace the compulsory insurance.
Legal view of the Federal Fiscal Court (BFG)
The BFG followed the tax office’s argument. Premiums for a group health insurance constitute only income‑related expenses to the extent that they are compulsory contributions and correspond in amount to those of the statutory social insurance. Compulsory contributions to pension and support schemes of the chambers are deductible as such only if the taxpayer is obliged to make the payment. Therefore an obligatory element for the payment of the group‑insurance premiums is required. It is sufficient that the contributions are mandatorily imposed by a decision of the chamber body (in this case the Medical Chamber).
In the present case the taxpayer could not provide such a decision or any other evidence. No proof was supplied that the contributions to the group health insurance of doctors who opted out of the GSVG health insurance were mandatorily imposed by the statutes or a chamber decision of the Medical Chamber. Consequently, the premiums for the private group health insurance were not compulsory contributions and were therefore not deductible as income‑related expenses.
Tip:
If a so‑called “Opting-out” is possible for your professional group, we recommend that you obtain a tax and social‑security law review before exercising this option.