Health Insurance Reform 2026: Company Health Insurance (bKV) and Corporate Health Management (BGM) Move Further into Focus
The financial situation of Germany’s statutory health insurance system (GKV) remains strained. With the Health Insurance Financing Reform adopted in July 2026, the federal government aims to stabilize contribution rates over the long term and reduce the structural deficit within the system. A key element of the reform is to align future expenditure more closely with revenue growth, while benefits and reimbursement structures will be subject to stricter cost-efficiency reviews.
Corporate health insurance (betriebliche Krankenversicherung, bKV) is a voluntary employer-sponsored benefit and is not restricted by the reform. On the contrary, its importance as a tool for employee retention and employer attractiveness is expected to increase (see our article in Servus Newsletter 32).
Corporate Health Management (BGM) is likewise unaffected from a legal perspective. At the same time, its strategic relevance continues to grow:
- Preventive healthcare and health promotion initiatives can help reduce sickness-related absence.
- Investments in employee health support workplace productivity and strengthen employee retention.
- Measures such as flu vaccinations, health screenings, ergonomic workplace design, mental health programs, and resilience training continue to gain importance.
While the reform does not introduce direct changes to either bKV or BGM, both instruments are becoming increasingly important against the backdrop of rising healthcare costs, persistent skills shortages, and growing mental health challenges in the workplace. Through targeted health initiatives, employers can enhance their attractiveness while sustainably promoting workforce wellbeing.
Our recommendation: Companies should use the reform as an opportunity to review their health strategy. Today, a well-designed combination of corporate health insurance and corporate health management is far more than an additional employee benefit. It is a key element of a modern people strategy and can make a significant contribution to employee retention and employer attractiveness.
If you have any questions on this topic, please feel free to contact us.
Vacation During Sick Leave, Sick Leave During Vacation: What Employment Law Provides
The summer vacation season may still be fresh in our minds, while winter holidays are already approaching. This makes it a good time to take a closer look at the employment law implications of the intersection between vacation and sick leave.
1. Can employees go on vacation while on sick leave?
A medical certificate of incapacity for work does not automatically mean that an employee must remain at home. Employees may take a vacation while on sick leave, provided that the trip supports their recovery. However, if the vacation could potentially delay recovery, for example due to the destination or nature of the travel, it should be avoided. Failure to do so may result in employment law consequences, including dismissal without notice in severe cases.
Where incapacity for work lasts longer than six weeks and statutory sick pay is being received, any vacation travel requires the prior approval of the health insurance provider. For trips within the EU/EEA or Switzerland, approval is typically granted. Travel to countries without a valid social security agreement may be denied.
2. What happens if an employee becomes ill during vacation?
Employees who become unable to work during an approved vacation are entitled to have the affected vacation days credited back to them. However, strict notification and documentation requirements apply.
First, the illness must result in actual incapacity for work. Second, such incapacity must be certified by a physician without delay, meaning on the very first day of incapacity. Minor health impairments that do not prevent work, or medical certificates obtained retrospectively, are insufficient.
Employees must not unilaterally extend an approved vacation by the days lost due to illness. Instead, once the relevant requirements are met, those vacation days are reinstated and may be requested again through the usual approval process.
A special case arises where the illness was self-inflicted through negligent conduct, such as engaging in particularly risky sports activities. While this does not affect the crediting of vacation days lost due to certified incapacity for work, it may affect entitlement to continued remuneration. In such cases, employers may not be required to continue salary payments.
We wish you restful vacations free from illness and injury.
Digital Payroll Records: Paper Will No Longer Be an Option from 2027
Effective 1 January 2027, all payroll records relevant to social security audits must be maintained electronically (§ 8 para. 2 BVV). The current exemption option expires permanently on 31 December 2026. This requirement applies in principle to all employers subject to audits by the German Pension Insurance Authority.
Relevant documents include:
- Proof of residence status and work authorization
- Health insurance membership certificates
- Enrollment certificates, for example for working students
- Applications for exemption from compulsory pension insurance contributions (particularly for mini-job employees)
- A1 certificates for international assignments
This change also affects occupational pension arrangements. With reference to the German Act on Proof of Employment Conditions (Nachweisgesetz), salary conversion agreements and references to applicable pension plan rules must in future be available electronically.
While there is no comparable explicit provision for corporate health insurance (bKV) under the Contribution Procedures Ordinance (BVV), a consistent digital filing approach for bKV documentation is recommended from a compliance perspective.
Importantly, digitalization alone is not sufficient. Documents must be centrally stored, clearly assigned, readily accessible at all times, and machine-readable. Employers who fail to meet the deadline risk delays during audits, estimated contribution assessments, additional claims including late payment penalties, and, in severe cases, fines under Section 111 of the German Social Code IV.
Pension Commission Presents 33 Reform Recommendations
The report submitted by the Pension Commission, covering all three pillars of retirement provision (statutory, occupational, and private), proposes the following key reforms:
- Introduction of a statutory funded pension scheme
- Expansion of the insured population
- Adjustments to the retirement age, including the abolition of early retirement without benefit reductions for long-term contributors (“retirement at 63”)
The proposed statutory funded pension scheme would introduce a mandatory funded supplementary pension modelled on the Swedish system. Through an additional contribution rate of 2%, shared equally between employers and employees, individual investment accounts would be managed centrally and invested in capital markets.
This new statutory funded pension would complement the Retirement Savings Account (Altersvorsorgedepot), which is scheduled to launch on 1 January 2027. Unlike the proposed statutory pension component, the Retirement Savings Account remains a voluntary private retirement vehicle that combines capital market returns with government support.
Whereas the statutory funded pension would become a new pillar within the public pension system, the Retirement Savings Account, as the successor to the Riester pension, is based on voluntary contributions supplemented by government incentives and tax advantages, allowing investments particularly in ETFs, mutual funds, and bonds.
Life Expectancy Continues to Increase
According to the Federal Statistical Office’s new 2023/2025 Life Table, average life expectancy in Germany has risen once again. Compared with the previous year, female life expectancy increased by almost two months and male life expectancy by approximately three months.
For children born in 2025, life expectancy is now 83.6 years for women and 79.1 years for men, representing new record highs following the pandemic-related decline of 0.6 years.
Compared with 2022, women have gained approximately nine months of life expectancy, while men have gained nearly 13 months, more than a full year. The life expectancy gap between women and men continues to narrow gradually, as men are currently experiencing faster gains.
Effective Exclusion from the Personal Scope of an Occupational Pension Commitment
In practice, employers frequently ask to what extent pension commitments may exclude specific groups of individuals or make benefits conditional upon certain requirements.
In its judgment of 26 August 2025 (3 AZR 283/24), the Federal Labour Court (BAG) held that the exclusion of specific groups of individuals, in this case apprentices, requires a clear and unambiguous provision. If the definition of the eligible group is too broad, for example simply referring to “employees,” an intended exclusion may be ineffective.
The Court also emphasized the strict distinction between the pension promise itself and the conditions for receiving benefits. Waiting periods, age limits, or minimum service requirements may limit benefit entitlement but do not generally delay the beginning of pension accrual.
This distinction becomes particularly important when, as in the case at hand, an occupational pension commitment is terminated without replacement. The Court clarified that, unless explicit provisions state otherwise, termination generally results only in the freezing of accrued entitlements.
Employers should therefore clearly define both the personal scope of occupational pension commitments and the intended legal consequences of termination to avoid ambiguities and the associated legal risks.
