Residency is what brings cover

Under the State Health Insurance Law, also known as the National Health Insurance Law, every Israeli resident has health insurance. Residency turns on where a person’s life is centred: their home, their family, where their children go to school and where they mainly work. The National Insurance Institute (Bituach Leumi, or NII) collects health contributions together with national insurance contributions, and residents aged 18 and over must pay them.

Care itself comes from health funds, the kupot holim, which work much like HMOs. Every insured person registers with one and may choose which, and each fund must provide the standard health basket set by law. Your employee picks the fund; the employer does not.

One family rule is worth knowing: a married person who does not work and whose spouse is insured is exempt from paying health contributions.

What the Israeli employer reports, pays and deducts

The employer must report each employee to the NII and pay national insurance and health insurance contributions for them. Reports that arrive late or not at all bring fines.

The health insurance contribution itself belongs to the employee: the employer deducts it from salary and passes it on. For salaried employees, the NII rate was 3.23% on pay up to 60% of the average wage (from 1 January 2025) and 5.17% on pay above that level (from 1 February 2025), up to an income ceiling. The employer’s own payment goes to national insurance rather than health insurance. Confirm current rates with the NII before you budget.

Contributions are owed on the same income on which income tax is owed, and that includes benefits given to the employee. Before adding any health benefit, ask a local adviser or tax professional how it would be treated for tax and NII purposes. Official guidance sets no duty for an employer to buy private health cover for an Israeli-resident employee.

When your hire is not an Israeli resident

The rules change for a foreign resident, such as a US citizen working in Israel on a work visa. That person has no state health insurance. Under section 1D of the Foreign Workers Law, the employer of a foreign worker must provide private medical insurance at its own expense for the whole period of employment, covering a set basket of services.

The employer must also give the worker a summary of the policy in a language they understand, and only a limited part of the cost may be deducted from pay. The work-permit form notes that the duty can be excused where the worker already holds a similar policy. Whether a particular international plan meets that basket is for the insurer to confirm.

Supplementary plans, private insurance and global cover

Above the standard basket sit two voluntary layers. The health funds sell their own supplementary plans, often called shaban, which add services beyond the basket, and insurance companies sell commercial private health insurance separately. A Ministry of Health guide lists extra dental care, elective surgery and access to private specialists and hospitals among the things supplementary plans can cover, and notes that group plans negotiated through large employers exist.

The ministry’s Kol Habriut site compares the basket, each fund’s services and the funds’ supplementary plans.

For a resident employee, national cover comes with residency and is paid through the NII, so an international plan is best planned as a top-up rather than a replacement. For a foreign-resident employee, the open point is whether a plan meets the Foreign Workers Law basket described above.

Who acts as the Israeli employer

When a US company employs someone in Israel, the Israeli employer is either its own entity or an employer of record (EOR). Whoever fills that role reports the employee to the NII and deducts the health contribution, and a resident employee chooses their health fund. For a foreign-resident employee, that employer arranges the required private medical insurance instead.

Staffing in Israel is regulated. Anyone acting as a manpower contractor, meaning a business that supplies workers to another business, must hold a licence under the Employment of Employees by Manpower Contractors Law, and working without one is an offence. An official employment guide also limits agency placements to nine continuous months unless the Labour Ministry approves longer. Official guidance does not say whether those rules reach an EOR arrangement for a foreign company with no Israeli workplace.

For a general comparison of how cover follows each arrangement, see our page on health coverage for EOR and contractors abroad.

New arrivals and returning Israelis

Timing matters for people moving to Israel. New immigrants (olim) register with a health fund at a post office within 90 days of arrival; after that, registration goes through the NII. New immigrants with no income or low income can be exempt from health contributions for their first six months.

Israelis coming home after a long stay abroad may face a waiting period before health fund services resume, which can be redeemed with a special payment to the NII.

Getting an introduction to a benefits partner

Mithril1 does not sell or recommend health plans. If you are weighing international cover for your team in Israel, we can introduce you to a benefits partner that works on international and remote-team health coverage. Eligibility, plans and pricing sit with the partner and the insurer.

Fill in the quote form on this page with the number of people you employ in Israel, whether each is an Israeli resident or a foreign resident, and whether family members would be included, and we will hand it to the partner. You can also read our pages on the United Arab Emirates, Italy and France, the overview of international health insurance for remote employees or the employee benefits hub.

A few useful answers

Common questions

Does an Israeli employee have public health insurance?

Yes, if they are an Israeli resident. Every resident is insured under the State Health Insurance Law and registers with a health fund of their choice, which provides the standard basket.

Who pays the Israeli health insurance contribution?

The employee. The employer deducts it from salary and reports it to the NII; the employer’s own payment goes to national insurance.

What if our hire in Israel is a foreign resident?

A foreign resident has no state health insurance. Under the Foreign Workers Law, the employer must provide private medical insurance at its own expense for the whole period of employment.

Can an international plan replace Israeli national health insurance?

For a resident employee, plan on it as a top-up, because national cover comes with residency and is paid through the NII.

How does Mithril1 help with an Israeli hire?

We can introduce you to a benefits partner for international and remote-team health coverage. Tell us about your Israeli team on the quote form, and the partner and the insurer will work out who is eligible and which plans apply.

International Health Insurance for Remote Employees in Israel