What is a premium reduction (PR)?
Everybody who lives in Switzerland has to take out basic health insurance with a health insurer. While the premium level depends on the person’s age, canton of residence and health insurer, it has no connection with their level of income. To ensure that premiums are charged in a socially responsible way throughout society, the Swiss Health Insurance Act (KVG), which has been in force since 1996, stipulates that people and families with lower incomes can apply for a premium reduction (PR). This only applies for basic insurance, but not for supplementary insurance policies.
Who is eligible to receive a PR?
This decision is made by your canton of residence and as such, the granting of PRs can vary from canton to canton. The main factor in determining whether someone is eligible for a PR is their most recent definitive tax assessment. Many of the relevant offices (social insurance or health authority) provide an online calculator. You can use these to check whether you are eligible for a PR. ÖKK has no influence on this decision.
I would like to apply for a premium reduction: How do I go about doing so?
- If you have not automatically received the application form by mail, you can order, complete and return it at the relevant office (social insurance or health authority). The office responsible for you can be found on the AHV/IV website. The documents required vary depending on the canton. Usually at least one insurance policy and the last definitive tax assessment is required.
- The responsible office will notify you in writing of your entitlement to a reduction in your premiums.
- If you are entitled to such a reduction, the responsible office will transfer the premium reduction directly to ÖKK. ÖKK then deducts the premium reduction directly from the basic insurance premiums.
It may be the case that not all cantons will have decided upon your entitlement by the time the first premium invoice is dispatched. We recommend that you nevertheless pay the premium invoice in order to avoid any reminders being sent or debt collection proceedings being initiated. If your application for a reduction in premiums is approved during the year, we will credit you the amount to which you are entitled.
How is the PR paid out?
If your application for a PR is accepted, the relevant office from then on transfers the reduction to ÖKK, which then deducts the amount from your premium calculation. The PR is also listed on your premium calculation.
Do children also receive reductions?
Yes, provided their parents earn a low or medium income. Then the cantons have to reduce the premiums for their children by at least 80 percent, while the premiums for young adults in education are reduced by at least 50 percent. Each canton is responsible for defining the exact level of income to be considered a “low or medium income”.
Who finances the PR?
The Federal government and the cantons fund the reductions using tax payers’ money. The Federal government covers a fixed rate of 7.5% of the gross costs of basic insurance, i.e. all money that private individuals have paid in the form of basic insurance premiums and cost-sharing amounts. The Federal government distributes the subsidies across the cantons. Here it takes into account the residential population of the cantons, but not their financial strength. The other costs for the PR are covered by the cantons. This system of financing is set to be changed, with discussions currently taking place at a political level.
