As some policyholders in Germany have experienced in recent months, it can happen that the tax office offsets a private health insurance (PHI) premium refund against insurance costs. This can affect the self-employed and freelancers in particular, who often pay higher premiums for private health insurance than those with statutory insurance.
The offsetting of PKV repayments against insurance costs is not new, but it has increased sharply recently. The affected policyholders complain about an additional financial burden, which usually comes unexpectedly and can sometimes amount to several thousand euros.
The reasons for offsetting PKV repayments against insurance costs are varied and not always transparent. The tax offices often argue that the premium refunds are considered taxable income and may therefore be offset against the insurance premiums. However, there are exceptions and limitations to this that many individuals are unaware of or do not consider.
To avoid financial difficulties caused by offsetting private health insurance repayments against insurance costs, it is therefore advisable to find out about the tax regulations and possible pitfalls at an early stage. Professional advice from a tax advisor or insurance expert can help avoid serious financial consequences in this regard.
Background information
If you are a private patient and receive a premium refund from your health insurance company, the tax office can offset the refund against your insurance costs. The background to this is the so-called Special Expenses Deduction Act, which regulates the tax deductibility of health insurance premiums.
However, there are a few things to keep in mind. Offset is only available if the premium was paid for the year in which the insurance premiums were also paid. In addition, only premiums for basic insurance may be offset; a repayment of supplementary insurance remains disregarded for tax purposes. The maximum amount of the special expense deduction for health insurance premiums is also limited and is adjusted annually.
In principle, offsetting repayments against insurance costs can therefore be advantageous for private patients from a tax point of view. However, one should inform oneself in advance about the requirements and limits and, if in doubt, consult a tax advisor.
Offsetting of private health insurance premium refunds
More and more insured persons receive premium refunds from their private health insurer (PKV). These are repayments of insurance premiums paid in excess of the amount due. These premium refunds may be tax deductible. But what happens when the tax office offsets the premium refunds against the insurance costs??
In principle, the offsetting of private health insurance premium refunds against insurance costs is possible. The repayment then reduces the amount that the insured person must spend on his health insurance in the year. This has the effect of reducing the tax deductible amount for insurance premiums. This can lead to a higher tax burden.
To avoid offsetting, insured persons should declare the premium refunds and the insurance premiums separately in their tax return. In this way, they can ensure that the premium refunds are taken into account for tax purposes and do not lead to offsetting against insurance costs.
- Conclusion: Caution is advised in the case of premium refunds from the PKV, as the tax office can offset these against the insurance costs. An incorrect tax return can lead to a higher tax burden. Insured persons should therefore declare the premium repayments and the insurance premiums separately in order to avoid a set-off.
Effects of offsetting private health insurance premium refunds against insurance costs
The offsetting of private health insurance premium refunds against insurance costs has an impact on the amount of the insurance costs. This can lead to a reduction in insurance costs, especially for people who have received premium refunds. This is because the offsetting reduces the premiums already paid, which can also reduce the insurance costs.
However, insured persons should make sure that the premium refund is not completely offset against the insurance costs. Because if the offset is disproportionate, this can lead to a shortfall in insurance coverage. In this case, insured persons must pay the difference out of their own pocket.
Another possible effect of offsetting private health insurance premium refunds against insurance costs is a change in the tariff. This can occur in particular if the premium refund has a lasting impact on the premium amount. In this case, it may make sense to change tariffs in order to get the best insurance possible.
- In summary, offsetting private health insurance premium refunds against insurance costs can have both positive and negative effects.
- Insured persons should therefore carefully consider whether they wish to offset the premium refund in full against the insurance costs or whether they would prefer to leave part of their insurance amount unchanged and only deduct the surplus.
Legal basis
The offsetting of private health insurance premium repayments against insurance costs by the tax office raises legal questions. In principle, income from insurance must be taxed. But which costs may be deducted from the income? There are clear legal bases for this.
For example, only insurance premiums that guarantee insurance cover in the event of illness or the need for long-term care may be claimed as special expenses. Contributions to a classic endowment insurance do not fall into this category and can therefore not be deducted as special expenses.
The tax office must also adhere to these legal principles when offsetting private health insurance premium refunds against insurance costs. Only those costs that are actually related to insurance coverage in the event of illness or need for long-term care may be taken into account. Otherwise, there is an incorrect offset, which can be challenged in an objection procedure.
- Conclusion: The offsetting of private health insurance premium refunds against insurance costs by the tax office must adhere to the legal principles. Only those insurance costs may be taken into account that are actually related to insurance coverage in the event of illness or need for care.
Tips for dealing with the tax office
If the tax office has offset a PKV premium refund against insurance costs, those affected should first remain calm and get an overview of the situation. It is advisable to examine the notice carefully in order to identify possible errors. All relevant documents such as account statements, insurance contracts and tax assessment notices should be taken into account.
If an error is discovered, you should immediately file an objection. This can be done in writing or online via the ELSTER portal. In doing so, you should specify exactly why you are objecting and which documents are enclosed. It is advisable to make a copy of the objection and retain it.
If the objection is rejected, the person concerned is free to go to the fiscal court. However, it should be borne in mind that this step is associated with costs and time expenditure. It may be advisable to seek advice from a tax advisor or lawyer beforehand.
- Keep a cool head and get an overview of the situation.
- Check the notice from the tax office carefully and collect all documents.
- File an appeal and include all relevant documentation.
- When in doubt, consult a tax advisor or lawyer.
In summary, if you are having problems with the financial office, it is important to check carefully and not make rash decisions. It is worth investing time in clarifying the situation and seeking professional help if necessary.