At first, Christine Raab only wanted to know one thing: “Can’t we postpone the whole thing until the end of the financial year?” She sat in front of her doctor. The “whole” was chemotherapy, radiation and cancer treatment. The fiscal year, in turn, still had six weeks. It was 2014, Raab was 31 years old, a successful entrepreneur, she did make-up at weddings and ran a swimming school. Today she gives a quick laugh when she tells us what her first thought was when she was diagnosed with breast cancer. At the time she was just shocked. Economic worries were added to the terrible diagnosis, when the doctor said: No, we’ll start as soon as possible.
It doesn’t always have to be life-threatening, sometimes a flu is enough – for the self-employed, from the editor to the tour guide, illness is usually not a temporary inconvenience, but affects the economic substance. In the short term, income collapses, in the medium term customers switch to the competition, and in the long term the life’s work that has been built up is in question. The worries are manifold, the tasks great, because where employers and health insurance companies step in for employees, the self-employed must also make provisions themselves. Because this is often not the case, the famous “self and constantly” also applies in the event of illness. “A lot of self-employed people go to work sick,” says Veronika Mirschel from the self-employed department of the Verdi union.
Since 2009, everyone in Germany has been obliged to have health insurance. The problem: Anyone who has their own health insurance does not receive any money for the first six weeks of sick leave – during which the employer pays for employees. When a nail salon owner, a jazz trumpeter or a swimming teacher like Christine Raab breaks their arm, they have to use their savings to bridge the gap. Experts like Mirschel say that the beginning of retirement provision is to save up three months’ income.
Only after these six weeks does the actual health insurance take effect – and with it a complex system. Because there are two ways for the self-employed to insure themselves: statutory or private. The latter in particular is cheap at first, insurance companies lure you in with flat rates of 80 euros a month. However, private insurance becomes more expensive with age or starting a family. “That only makes sense if you’re a young man who definitely doesn’t want a family later,” says trade unionist Mirschel. The other option is to voluntarily take out statutory insurance. The amount of the contributions is then based on income. In the case of a small number of professional groups with many self-employed persons, the artists’ social security fund covers the costs that the employer would pay. Other self-employed people can also take out statutory health insurance, but this is expensive because nobody pays the employer’s share and a minimum income is assumed. And to make it even more complicated, the statutory insurance only gives sick pay from week seven if you have agreed on the corresponding tariff, 14.6 percent instead of 14 percent contributions from income. Christine Raab was lucky. She received sick pay for 14 months. Without that, she knows today, she would quickly have been in debt.
Reserves for illness and old age often go unplanned
The fact that she was so insured, she admits, was a coincidence. And this is where the real problem becomes apparent: at least the founders can or want to deal with pension provision. “I’ve never been to a start-up seminar at the IHK,” says Raab. Instead, she worked as an educator for many years and started massaging people for fun. She found that she enjoyed starting a business, making her own schedule, and ended up writing a business plan for the employment agency. The rent for rooms was in it, cost of materials, numbers, how many engagements she could have. There were no reserves for illness, and no one asked for them. “It was not at all clear to me how much money you need as an entrepreneur and for what,” she says. “I didn’t feel like I had to save a lot,” she says.
Lena Fox from the Independent Patient Advice Service also observes these patterns. First of all, many self-employed people want to get the business up and running and leave out the topic of pension provision or keep the costs as low as possible. “A lot of people start out by saying they have a lower income than they want to save, and their contributions are correspondingly lower,” says Fox. On the one hand, this harbors the risk that little will be paid in the event of illness. And in the medium term it is expensive anyway, because the contributions based on estimates are only provisional, the correct amount is calculated on the basis of taxable income. “When the final tax return comes, there are often high back payments,” says Fox.
She therefore advises thinking about the type of insurance you need at the beginning. There are private daily sickness benefit insurances and also additional options from the statutory health insurance companies that take effect before the six weeks. There are big differences in the tariffs for regular sick pay from week seven in the statutory insurance companies. And if you still decide to take out private health insurance, you need to pay attention to the details. For example, the possibility of being declared unfit for work by the health insurance company must be ruled out.
“As soon as there is income, the legal entitlement to sick pay is suspended.”
But even if you have taken good precautions: it can still be difficult, Fox observes again and again. A classic is that there is disagreement with private health insurers as to whether insured persons can work. The providers also occasionally assume that insured persons have concealed a previous illness and refuse to pay. The most common problem is a standard regulation in the statutory funds, says Fox. “As soon as there is income, the legal entitlement to sick pay is suspended.” This applies, for example, when customers pay outstanding bills even though the service provider has long been on sick leave. Or when things are going like Christine Raab’s.
The young woman thought last year that she was now over the mountain. The famous five years after cancer were over, during rehab she trained as a yoga teacher. The studio was running, customers came from all over the district in the greater Frankfurt am Main area, and they had even survived the lockdowns with online courses. Then, in 2022, the pandemic ended, business started up again, and another diagnosis came. The cancer had spread. The “whole” started all over again: doctor’s appointments, controls, examinations. This time she got through the first few weeks well thanks to what has now been saved. She is still sick, but no longer reported sick. The reason is simple: reintegration is not intended for the self-employed, and there is no such thing as sickness benefit. So she gives lessons whenever it fits between her chemotherapy appointments. “I could just sit at the kitchen table crying, but when I prepare an hour I realize how good it is for me to be busy with something else.” That is not sufficient, but more is not possible.
Nevertheless, Christine Raab made it through, also because a friend started a fundraising campaign that raised several thousand euros. She is thankful for that. But it annoys her that this is necessary. She would like a statutory health insurance that covers the basics for everyone, including self-employed workers like hers. “But Germany is not an independent country.”