German social insurance is a statutory insurance system, which plays a predominant role in Germany's overall social security. Based on the solidarity of the community of the insured, it provides effective financial protection against the major life risks and their consequences, including illness, unemployment, old age, industrial accidents and the need for long-term care. Social insurance guarantees a stable standard of living for every individual. Coverage encompasses the following branches, referred to as insurance funds or funds:

• [Health Insurance]
  
• [Accident Insurance]
  
• [Long-term Care Insurance]
  
• [Retirement Pension Insurance]
  
• [Unemployment Insurance]
  

Health Insurance

In the Federal Republic of Germany around 90 percent of the population is covered under statutory health insurance.

Who is insured?

In principle, all workers are compulsorily insured under statutory health insurance if their gross pay does not exceed a defined upper limit. Insured persons are free to choose the health insurance fund they wish to be insured with.
Compulsorily insured are:

• workers, including those undertaking vocational training,
• recipients of unemployment benefit or unemployment assistance,
• farmers and their family members,
• artists and those in the publishing professions, in accordance with the Artists Social Welfare Act,
• persons in youth assistance facilities,
• recipients of occupational re-integration assistance,
• disabled persons employed at sheltered workshops and at institutions, homes or similar establishments,
• university students,
• trainees, apprentices without remuneration and apprentices in second-chance education,
• old-age pensioners/pension applicants who have been insured for a specified length of time,
• persons, who don't have any other health insurance and who, on the basis of their status, are entitled to statutory health insurance or who were in the past insured by the statutory health system.

In addition, many people carry voluntary health insurance (for example, the self-employed) or are insured as family members. The option to obtain voluntary insurance is in principle open only to those who were previously compulsorily insured or insured as a family member. Provided certain conditions are met, spouses or partners of the insured, as well as children, are covered as family members, with no need to pay contributions.

Benefits

To maintain, restore or improve the health of the insured persons these are the central tasks of statutory health insurance. As a community based on solidarity, health insurance usually provides benefits covering the necessary medical assistance during illness with the exception of occupational accidents or illnesses and also pays sickness benefit if the employer does not continue to pay a wage or salary while an employee is unable to work.

Statutory health insurance provides a wide spectrum of benefits. Insured persons have free choice of any registered doctor or dentist. But they also share responsibility for maintaining their own health: through a healthy lifestyle, participation in early detection measures and active co-operation in their own treatment and rehabilitation. The health insurance funds actively support their members in these efforts by providing health-care education and advice.
Benefits-in-kind - services - cash benefits

Benefits-in-kind to which insured persons are legally entitled include, for example, medications and hospital treatment. Among the many services provided, the major ones are medical and dental treatment. Cash benefits include sickness benefit for those unable to work, and maternity benefit. We provide for you here a rough overview of the broad spectrum of benefits provided by statutory health insurance. More detailed benefits profiles can be obtained directly from the statutory health insurance funds.
Promoting good health and preventing illness

"An ounce of prevention is worth a pound of cure" might be the motto espoused by all statutory health insurance funds. The basic idea behind health promotion is to offer insured persons effective assistance in staying healthy. This assistance includes vaccinations, prenatal care, early detection measures for cancer, and a series of regular check-ups for children. Preventive dentistry designed to protect against dental disease also falls under this benefit category.
Early detection

The statutory health insurance funds generally cover the costs of, or pay subsidies for, necessary early detection measures. For example, adults over 35 are entitled to a basic check-up every two years, especially for early detection of so-called diseases of civilization, such as cardiovascular disease and diabetes. Early detection of cancer and check-ups for children also belong in this category.
Medical treatment

Benefits available in the event of illness include:

• medical and dental treatment,
• hospital treatment,
• drugs, dressings, complementary treatment, such as massages, and aids, such as hearing aids and wheelchairs,
• home help if an insured person has a child under 12 living in his/her home and must go into hospital and is thus unable to look after the household,
• home nursing care if this helps avoid or shorten a stay in hospital,
• orthodontic treatment up to the age of 18, and
• preventive measures and rehabilitation.

A detailed overview of the benefits available can be found in the articles of your statutory health insurance fund.

Sickness benefit

Workers belonging to a health insurance fund who are unable to work due to illness receive sickness benefit from the 7th week of their illness, which replaces the continued payment of their wages or salary. Instead of sickness benefit, farmers receive an upkeep allowance through an agricultural health insurance fund. Seasonal workers also receive sickness benefit through the agricultural health insurance fund if they are unable to work.
Benefits during pregnancy and after childbirth

Insured women entitled to sickness benefit are also entitled to maternity benefit, usually for six weeks before and eight weeks after the birth. During pregnancy and while receiving maternity benefit, a woman remains a member in the health insurance fund.
Benefits while abroad

Even when insured members are away on holiday, they are still entitled to medical care and hospital treatment - provided they have obtained a 'European Health Insurance Card' (or certificate) from their German health insurance fund prior to going abroad. In addition to the 27 EU Member States, insured persons are also entitled to medical care in the following countries:

Bosnia-Herzegovina, Croatia, Iceland, Liechtenstein, Morocco, Macedonia, Montenegro, Norway, Serbia, Switzerland, Turkey and Tunisia.

Financing

Statutory health insurance is financed for the most part through the contributions of its members. The amount of the contribution depends on the financial means available to the member.
Employee contributions

Statutory health insurance is financed through the contribution of employers and the insured. The contribution amount depends both on an employee's assessable income up to a defined contribution assessment limit, which is adjusted each year (2012: 45,900 Euro per year) and on the contribution rate. Like with unemployment or pension insurance, there is an uniform, legally stipulated contribution rate for statutory health insurance. The generally applicable contribution rate for statutory health insurance is 15,5 percent.

Employer (7,3 percent) and employee (8,2 percent) each pay a different share of the contributions. Employees who are voluntarily insured because their income exceeds the upper limit are still entitled to a supplement towards their contributions from their employer.

Trainees, pensioners and students:
Contributions for trainees with a wage or salary up to 325 Euro per month are paid in full by the employer. For pensioners who are compulsorily insured, the pension insurance fund pays a share of the contributions out of the pension, paying the contribution directly to the health insurance fund. Pensioners who are voluntarily insured pay their own contributions to the health insurance fund. They can however apply for a contribution supplement from the pension insurance fund. Students pay the so-called student contribution, which is the same for every health insurance fund.
In the service of solidarity

Behind the basic funding structure of the statutory health insurance system is the solidarity principle. The solidarity principle means that in the statutory health insurance system those who are financially better-off help those with lower incomes, the young help the old and singles help out families. This is expressed by the fact that contribution amounts are based solely on each members financial capabilities, calculated as a percentage of assessable income.

Accident Insurance

Employees below a certain income level are as a rule automatically compulsorily insured. The social insurance funds are generally financed by contributions from insured fund members and their employers. To find out exactly who is insured, see the descriptions of each insurance fund under "Who is insured?".
Who is insured?

Every year some 1,400,000 accidents occur in the Federal Republic of Germany involving employees who are either working or on their way to or from work. These are joined by around 18,000 cases of recognised occupational illnesses and some 1.5 million school accidents. For those affected, the consequences often entail wide-ranging changes in their way of life. Restoring these people's health and, as far as possible, their ability to work is the task of statutory accident insurance.

Every employee and trainee is covered by statutory occupational accident insurance. In industry and agriculture the employers' liability insurance funds (Berufsgenossenschaften) are responsible for accident insurance. Providing coverage in the public sector are the municipal accident insurance associations (Gemeindeunfallversicherungsverbände) and other public-sector accident funds. Coverage is provided for accidents at work or school or on the way to or from work or school - as well as for occupational illnesses.

Who is insured?

Statutory occupational accident insurance protects the following groups:

• workers and salaried employees,
• farmers and their family members,
• children in day-care/nursery school/kindergarten,
• schoolchildren and university students,
• disabled people employed in sheltered workshops,
• people who help at the scene of an accident or disaster,
• civil defence and emergency rescue workers,
• blood and organ donors,
• caregivers and household helpers,
• helpers on non-commercial construction projects,
• persons doing volunteer work for the federal, state or municipal governments or another public institution, including court witnesses/jurors,
• unemployed persons and social assistance recipients, provided they are properly registered,
• prisoners and development workers, and
• voluntarily insured entrepreneurs.

Retirement Pension Insurance

Who doesnt look forward to a well-earned retirement after years and years of hard work? The old-age pension is one way of ensuring that those who are covered and their families can enjoy a certain amount of financial security during their golden years. But who is actually insured and confident of being well-provided-for in their old age, or in the case of reduced earning capacity, or if left behind as widow or widower?

Under the pension insurance scheme all persons are compulsorily insured who are employed by others or are vocational trainees with the exception of civil servants. Pension insurance provides these persons with lifelong protection against the financial risks entailed by reduced earning capacity, old age and death. This also applies to disabled people employed at sheltered workshops, as well as people on military or civilian service. Even some people who are self-employed are compulsorily insured. These include self-employed tradespeople, although they may opt out after 18 years of paying contributions. Self-employed artists and members of the publishing professions may apply for insurance coverage under the Artists Social Welfare Act. The prerequisite for joining this scheme is a certain minimum annual income, although this requirement may be waived for newcomers to a profession.
Compulsorily insured are:

• in general all workers,
• trainees,
• certain groups of self-employed persons, such as master craftsmen, school and kindergarten teachers, midwives, artists, those in the publishing professions, and others,
• people on military or civilian service,
• non-employed carers,
• claimants of so-called income-replacement benefits, such as sickness benefit, unemployment benefit, cash benefits during sickness, transitional allowance and maintenance benefit,
• disabled persons working in sheltered workshops, and
• mothers or fathers during the initial child-raising period (for births on and after 1 January 1992 up to three years, for births up to and including 31 December 1991 up to one year).

Farmers are not compulsorily insured under statutory pension insurance, but rather in the Farmers' Pension Fund (in German).

Civil servants are generally exempt from paying insurance contributions, as are those in marginal employment with monthly earnings of not more than 400 Euro.

Long-Term Care Insurance

In Germany some 2 million people rely on support or care from others because physical, mental or psychological illness renders them unable to independently master the routine tasks of daily life. The long-term care insurance is there to provide them with much-needed assistance.
Who is in need of long-term care?

Insured persons considered in need of care are those who, due to a physical, mental or psychological illness or disability, will require substantial assistance carrying out normal day-to-day activities for at least six months. Care benefits are provided to insured persons who are in need of care, can demonstrate having been insured for a specified qualifying period, have applied for benefits.

Long-term care insurance is compulsory. The principle applies of: "long-term care insurance follows health insurance". This means that whoever is covered by statutory health insurance with

• one of the local health insurance funds (AOK),
• an approved alternative health insurance fund (Ersatzkasse),
• one of the company health insurance funds (Betriebskrankenkasse),
• one of the guild health insurance funds (Innungskrankenkasse),
• one of the agricultural health insurance funds (Landwirtschaftliche Krankenkasse) or
• the Federal Insurance Fund for Miners (Bundesknappschaft)
  

also belongs to that funds long-term care insurance scheme. This also applies to family members of the insured, who are co-insured. People with private health insurance must also obtain private long-term care insurance.

Unemployment Insurance

The duty to contribute to unemployment insurance, exemptions from this duty and the voluntary insurance are regulated in the Third Book of the German Social Code. The provision states that in principle all persons gainfully employed above the insignificance limit are liable to contribute to statutory unemployment insurance. Trainees are also compulsorily insured against unemployment. According to the law, unemployment insurance is compulsory as soon as certain legal prerequisites exist.
Exemption from compulsory insurance for certain groups

Certain groups of people are explicitly exempt from contributing to unemployment insurance, because they are not intended to be covered by this insurance (e.g. civil servants, soldiers or those persons who reached their regular retirement age).

Source: Deutsche Sozialversicherung