Three ways European countries fund health cover

Much of Europe pays for care out of taxes and opens it to the people who live there. The NHS in the UK, the HSE in Ireland, the national health systems of Spain, Portugal and Italy, and the tax-funded services of Denmark and Sweden all work on residence rather than on a policy someone buys. Ukraine’s Programme of Medical Guarantees is paid from the state budget too.

A second group pays for care through payroll. Statutory insurance in Germany, the Assurance Maladie in France, compulsory insurance through a mutualité in Belgium, the National Health Fund in Poland and the national health insurance fund in Romania are financed by contributions taken from salary, so starting a job brings enrolment with it.

The Netherlands and Switzerland sit apart. Residents in both must hold a basic policy, and each adult buys it individually: from a private health insurer in the Dutch system, from a fund recognised by the Federal Office of Public Health in the Swiss one.

What a local employer has to pay for

A German employer shares statutory contributions with the employee and keeps paying full wages through the first six weeks of an illness. French employers pay health contributions to Urssaf and must also offer a collective complementary plan, the company mutuelle, covering at least half of its cost. In Italy, many national collective agreements set up sector health funds, so the agreement that covers the job decides whether a fund applies.

Elsewhere the employer’s share is narrower. Dutch employers pay an income-related levy on salary while the employee buys the standard policy. Swiss employers arrange cover for work accidents and occupational disease, and the health policy stays the employee’s own. Polish employers fund required occupational medical exams, Swedish employers carry sick pay through the first 14 days, and Romanian employers pay the first five days of sick pay themselves.

In the residence-based countries, cover arrives with the employee’s address rather than their contract, and the employer’s obligations are payroll ones, such as employer PRSI in Ireland or employer National Insurance in the UK, which an overseas employer with no UK presence may not owe.

Why an international plan is usually a top-up here

A global plan seldom replaces local cover in this region. It cannot stand in for statutory insurance for a German employee below the opt-out threshold, for French cover that starts on the first day of work, for Italian enrolment tied to a work permit, or for the contributions Belgium, Poland and Romania collect through payroll. The Dutch government tells newcomers they need a Dutch insurer even when they hold cover from home, and the social insurance bank (SVB) rules on the one exception it names, for people whose employer is based abroad. Switzerland grants exemptions only to listed groups, and the cantonal authority decides.

What a top-up adds varies. In the UK it brings private and faster care beside the NHS. Swiss supplementary cover pays for extras such as a semi-private or private ward and routine dental care, and Belgians commonly add hospitalisation insurance, sometimes through an employer’s group policy. In Ireland, a 2017 parliamentary answer said an international plan is not a health insurance contract under Irish health insurance law, which leaves it outside community rating.

EU passporting and insurers from outside the EU

Insurance law adds a second filter. Within the EU, an insurer authorised in one member state can generally cover risks in another through a branch or under freedom to provide services, once its home supervisor has notified the host country’s supervisor, the route Portugal, Italy, Poland and Romania describe. Insurers based outside the EU face a stricter path. Italy’s Private Insurance Code bars them from selling cross-border and requires an authorised establishment, Poland admits them only through a main branch authorised by its financial supervisor, and Romania requires authorisation for a branch.

UK insurers lost their EU passport for Poland from 1 January 2021, and the UK in turn forbids anyone to carry on insurance business there without authorisation under its Financial Services and Markets Act. Ireland’s Health Insurance Authority keeps the register of insurers allowed to carry on health insurance business in the country, and in Switzerland only funds recognised by the federal health office may provide basic insurance. For Ukraine, law-firm guidance describes non-resident insurers as generally needing a branch authorised by the National Bank of Ukraine.

So whether a particular international plan can be offered to someone living in a given European country is a question for the insurer to confirm before the benefit is promised.

Staffing law and the employer of record

Several countries here treat an employer of record as worker supply and regulate it closely. Law-firm guidance reads German leasing rules as requiring the EOR to hold a Federal Employment Agency permit and limiting one assignment generally to 18 months. Spanish practitioners warn that the usual EOR model can count as unlawful worker supply unless the provider is also a registered temporary work agency. Italy reserves worker supply to agencies authorised by the Ministry of Labour, Romania allows third-party staffing only through a temporary work agency, and Poland limits an agency placement with one user to 18 months in any 36. Belgium bans placing workers at another company’s disposal outside narrow exceptions, and Switzerland’s economic affairs secretariat says staffing into the country from abroad is not permitted.

Other countries leave more room for direct hiring. Sweden lets a company with no Swedish entity register with the tax agency as a foreign employer, France runs a foreign companies service through Urssaf, Ireland lets a non-resident employer register with Revenue, and a US company can operate UK payroll as an overseas employer. Portuguese labour law does not set out the EOR model, and press reports describe a labour court in Porto finding the dismissal of an EOR-employed worker unlawful.

Whichever route you choose, the legal employer handles enrolment in the local scheme. Our guide to health coverage for EOR employees and contractors abroad explains how cover follows each arrangement.

Family cover and how benefits are taxed

German statutory insurance takes in a non-earning spouse and children without an added contribution, while Swiss basic insurance is bought person by person, children included. France leaves extending the mutuelle to dependants up to the employer or a sector agreement, and Belgian hospitalisation insurance can include family members.

Tax treatment is where the region splits most. The UK and Ireland treat employer-paid medical insurance as a benefit in kind, Sweden taxes it at the employer’s cost, and Denmark counts it as taxable income unless the policy is limited to work-related injury or illness. Poland taxes a medical package beyond what the employer must provide by law. Spain exempts premiums up to an annual limit per covered person, Italy excludes contributions to qualifying health funds up to a yearly limit, and Romania gives a limited amount favourable treatment. Portugal excludes cover offered to all employees on equal terms, though its tax authority tends to treat a single covered employee as lacking that general character.

These rules change and turn on how a plan is set up, so check the tax and payroll side with a local adviser or tax professional before you offer a benefit.

Country guides for Europe

Each country guide goes deeper on the public system, employer contributions, private cover and hiring routes for that country:

For Canada and countries outside Europe, start from the international health insurance overview, and see every benefits topic on the employee benefits hub.

Requesting an introduction for a European team

When your team spans more than one European country, the quote form on this page is the place to start. List the countries, how many people work in each, whether they are employed through your own entity, an EOR or a contract, and whether partners or children need cover, and we will pass the details to a benefits partner that handles international and remote-team health coverage. Eligibility, plan choice and pricing rest with the partner and the insurer.

A European hire can also touch your US business policies; see insurance changes for remote teams for employment practices liability and cyber. We request those lines from insurers, and the insurer decides.

A few useful answers

Common questions

Can a global health plan replace the public scheme for an employee in Europe?

In most of Europe it works as an addition. Compulsory cover applies in countries such as Germany, France, the Netherlands, Switzerland and Poland, and in the residence-based systems the public service is there either way. An international plan adds private access, care abroad or benefits the local scheme leaves out, and the insurer confirms what a given plan includes.

What does EU passporting mean for health insurance?

An insurer authorised in one EU member state can generally cover risks in another through a branch or under freedom to provide services, after its home supervisor notifies the host supervisor. Insurers based outside the EU usually need a locally authorised branch or establishment.

Which European countries restrict employers of record?

Germany, Spain, Italy, Belgium, Poland, Romania and Switzerland regulate worker supply closely, through agency permits, registers, time limits or a ban on staffing from abroad. Sweden, France, Ireland and the UK let a foreign company register and employ someone directly.

Is employer-paid private health cover taxable for employees in Europe?

Often. The UK, Ireland, Sweden and Denmark generally tax it as a benefit, while Spain, Italy and Romania give favourable treatment up to a limit and Portugal looks at whether all employees are offered it on equal terms.

How do European public schemes treat an employee’s family?

It varies. German statutory insurance covers a non-earning spouse and children without an added contribution, while Swiss basic insurance is bought person by person, children included, and in the Netherlands each adult buys a standard policy and children under 18 are insured without paying a premium.

International Health Insurance for Remote Employees in Europe