Health Insurance in the Netherlands for SME Employer: Useful Hints and Tips

Health insurance is mandatory for each person who works in the Netherlands. Health Care Insurance Act adopted in 2006 serves as a legal framework to ensure universal access to medical insurance plans.

You have a 4-months head start to provide basic Dutch health insurance for an employee. Then a warning letter from CAK comes and you get a 3-month period to provide insurance for your employee.

The first fine for such offense is about € 400. Together with that, an employer receives a notice to get a 6-month period to insure his employee in the Netherlands. Failure to do that, leads to much more severe consequences.

Thoughtful health insurance premiums help you to attract highly qualified specialists such as IT professionals, for example. It’s considered a ‘hardcore’ employee benefit that can give a real advantage to a vacancy in a small company.

In another way, you can compensate for a lower-than-market salary with a more expensive healthcare premium. Since salary and health insurance are subjected to different tax rates, there is an opportunity to save money in terms of a limited budget.

Healthcare insurance plans can say a lot about the attitude of the employer. You can show employees that you care about them, and show the public that insurance premiums match your business environment and values.

In 2006, Netherlands introduced the Health Care Insurance Act that requires universal health care insurance for all residents of the Netherlands. The act makes it compulsory for all residents to take out a health care cost insurance with a designated Dutch private insurer.

Employees, entrepreneurs, and retirees pay an income-dependent contribution to the health care insurance act to the Dutch tax office. For employees, this contribution is withheld from their salary.

So, for you as an employer, this means that companies are obliged to issue the basic insurance plan to all employees irrespective of starter state of health, age, and gender.

Basically, there are two main types of insurance:

• Basic health insurance — Compulsory basic insurance (Basisverzekering)
• Optional additional insurance (Aanvullende verzekering)

The basic package in the Netherlands provides the same basic health coverage across all insurers. It costs from €110 to €134 a month and covers the most important health issues: GP, medicaments, ambulance, and hospital stay. Maternity, handicapped, and elderly care is also included.

Compulsory basic insurance (Basisverzekering) and optional additional insurance (Aanvullende verzekering) are two general types.
The basic health service divides into 4 policies depending on the outreach of clinics and the depth of reimbursement.

The better the health insurance plan, the larger is the choice of healthcare providers and fewer the surcharge from the insured person’s pocket.

By the Act, Dutch health insurance companies are obliged to accept for the basic plan every person irrespective of gender, age, and current state of health. In contrast, they can refuse a client who applied for supplementary health insurance.

Supplementary premiums cover a great variety of extra treatments that can be combined in many ways. By some estimates, there are more than 900 options of health insurance plans available here. To make it simple, imagine a person choosing toppings for his taco or waffle. It should match his health needs and be within the daily/ monthly budget.

There are about 8 Dutch health insurance companies and 5 international insurance companies working in the Netherlands like Cigna Global. You can use aggregator websites Independer (nl) or Zorgwijzer (en) to narrow things down a bit before applying.

Costs of healthcare insurance are divided between an employer and an employee, still the burden mostly falls on the employee. Employers pay an income-related contribution to the Healthcare Insurance Act (ZVW) to the Dutch tax office. In 2022, the low rate is 5,5% and the high rate is 6,75%.

Employees bear two types of costs — the monthly premium (Premie) and the ‘own risk’ (Eigen Risico). Premie is the nominal insurance deducted from a salary in favor of an insurance company. Basic health insurance costs € 110-134 a month, while adding an extra € 2-150 for supplementary coverages.

Eigen Risiko is a mandatory deductible that everyone, except children, has to pay for healthcare before the insurance kicks in. In 2022, the Eigen Risico is up to €385 euros, but this cost is variable. If an employee does not get sick during the year, they pay no eigen risico.

• Provide your employee with at least compulsory basic insurance.
• Inform your employee that s/he must register with a general practitioner. Warn your employee that there might be long waiting lists for different examinations, medical treatments, and so on.
• Keep in mind that it’s possible to change your healthcare provider once a year. It’s worth revising the health insurance plan once a year even if your employee is satisfied because the government and insurance companies also make annual changes.
• If you have several employees, agree to better terms of healthcare insurance with an insurance company and ‘re-sell’ it to employees.
• If your employee has too little income to be able to pay the full contribution to healthcare insurance, you can apply for a financial allowance from the Dutch Tax Authorities.

For 2022, the scale of low-incomers is under € 22.000-31.500 while the lowest earners get € 111 of allowance and the higher ones - € 7.

Managing healthcare insurance is an important stage of hiring employees in the Netherlands. Apart from monthly contributions to ZVW, employers usually take care of employees’ health insurance packages.

It’s not that complicated to calculate the healthcare contributions - you can use Salary and Social Tax Calculator on Enty. And still, choosing healthcare premiums and other perks for an employee requires your time and attention.

Enty will help you manage other steps of hiring in and streamline your paperwork. Hire an employee for your company in the Netherlands in several clicks and delegate payroll and other tax issues to your personal accountant!