What is sickness insurance?

It is voluntary insurance that a self-employed person can pay to the Social Security Administration alongside regular social insurance. Paying it gives you entitlement to sickness, maternity and paternity benefits (caring for a child after birth) or long-term care benefit for looking after someone close to you. 

How much will it cost?

Sickness insurance is paid monthly. The amount is calculated as 2.1% of the monthly sickness insurance assessment base (you can find this in your OSSZ statement for the previous year). The minimum monthly base for 2021 is CZK 7,000, so the minimum sickness insurance payment is CZK 147 a month. However, you can pay more for sickness insurance; the main benefit is that you then qualify for higher benefits. But even here, there is a limit: the maximum amount you can pay is CZK 373 a month.

What benefits are available, and what are the eligibility conditions?
Sickness benefit

To qualify for sickness benefit, a self-employed person must pay sickness insurance for at least 3 months before becoming unable to work. The incapacity must last at least 14 days, and only after those 2 weeks does the self-employed person start receiving sickness benefit. Incapacity for work can be caused by illness or quarantine, and the business owner must not during that period carry out gainful activity. The amount of sickness benefit depends on how long it lasts:

  • 60% of the daily assessment base from the 15th to the 30th calendar day
  • 66% of the daily assessment base from the 31st to the 60th calendar day
  • 72% of the daily assessment base from the 61st calendar day

Daily assessment base = monthly assessment base * number of months sickness insurance was paid / number of days for which sickness insurance was paid

Example: a self-employed person paid sickness insurance throughout 2020 and had a monthly assessment base of CZK 25,000.

Daily assessment base = (25,000 x 12) / 366 = CZK 819.67/day 

The daily assessment base is then adjusted further; the exact calculation is available on the OSSZ website. This calculation is only indicative. 

Maternity benefit

To qualify for maternity benefit, the mother must have paid sickness insurance for at least 9 months in the last 2 years and at least 6 months in the last year. Again, the self-employed person must not work while receiving the benefit. Maternity benefit is 70% of the daily assessment base per day for 28 weeks (6–8 weeks before birth and 22–20 weeks afterwards). After these 28 weeks, every woman is entitled to parental allowance (CZK 300,000 in 2021, which can be drawn gradually over 8–43 months). Further information on maternity benefit is available on the OSSZ website. 

Paternity benefit 

The conditions are simpler for fathers: they only need to have paid sickness insurance for 3 months before starting the benefit. They must not carry out gainful activity while receiving it. Its amount is calculated in the same way as maternity benefit. For further information, see the OSSZ website. 

Long-term care benefit

You can receive this benefit if you care for someone close to you who is ill. You receive 60% of the daily assessment base per day and can claim the benefit for up to 90 days. Another condition is that you must have paid sickness insurance for at least 3 months before starting to receive the benefit.

What are the alternatives?

Commercial insurers offer alternatives to standard sickness insurance, often paying sickness benefits before 14 days of incapacity have elapsed. You can usually agree flexible cover with the insurer to suit your needs. The disadvantage is that a private insurer generally also wants to know your income and pays only sickness benefit, but not maternity or paternity benefit. 

Is it worthwhile for you?

Sickness insurance is not compulsory and is not worthwhile for many people. Think about how often, and for how long, you are ill, whether you plan to start a family and whether someone close to you may need intensive long-term care. Then roughly calculate your assessment base so you know what daily payment you are considering. The Ministry of Labour website provides tables for calculating the individual benefits for 2021. It is also important to consider that you will not be able to carry out your business activity while receiving the benefit. Last but not least, remember the administration involved in arranging the benefit. From experience, I can count the self-employed people I know who pay sickness insurance on the fingers of one hand. 🙂

If you are unsure what to do, please get in touch and we can look at it together. 🙂