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Insurers warn: if tax changes come into effect, health insurance would become more expensive by almost 50%.
- Jolanta Tomašėvič
- 5 hours ago
- 3 min read
Currently, employers in Lithuania have insured almost 220 thousand employees with additional health insurance. Unfortunately, some of them may lose this additional health protection as early as next year, if the Seimas adopts the tax reform amendments proposed by the Ministry of Finance, which will increase the price of this additional health protection by almost 50 percent. In this way, employees would lose the opportunity to see doctors more quickly and would have to return to state medical institutions, where they have to wait in lines for several months, six months or longer, the insurance intermediary company Legator said in a press release.
This warning is being issued by insurance market experts in response to planned tax changes that would almost double the price of voluntary health insurance, unbalance the insurance market, and further burden the overburdened health sector.
According to the proposed changes in the tax reform, an employer motivating its employees with additional health insurance, starting from 1 January 2026, should additionally pay 20 percent of personal income tax (PIT), more than 20 percent of "Sodra" taxes, and 10 percent of insurance excise duty on the insurance premium should be paid by the insurance company.
For example, if an employer who currently purchases additional health insurance for an employee pays an average of 400-500 euros per year for such a service, after the reform he may have to pay 800 euros or more. If he insures 5 employees with such insurance, the annual amount of contributions would increase from 2000-2500 euros to 4000 euros or more.
For comparison, according to the current procedure, health insurance is currently not subject to taxes if the insurance premium during the calendar year does not exceed 25 percent of the employee's accrued salary.
It is predicted that if the proposed tax changes come into effect, most employees would lose additional health insurance, as it would become too expensive for employers to insure them. Therefore, authorities are called upon to responsibly assess the consequences of such a proposal and choose a path that would encourage employers to care for their employees, strengthen health protection, and not further undermine it.
If Lithuania nevertheless introduces additional taxes, the country risks not only greater problems in its healthcare system, but may also lose competitiveness among other countries and foreign employers who will be able to offer additional health care to qualified specialists.
Jolanta Tomašėvič, Head of the Motivation Programs Department at the insurance intermediary company "Legator", on the planned elimination of the benefit for voluntary health insurance
As Jolanta Tomašėvič, head of the motivational programs department at the insurance brokerage company Legator, notes, the proposed tax reform, which envisages eliminating the benefit for voluntary health insurance and introducing a new tax on insurance contracts, is worrying not only for the insurance sector, but also for all responsible businesses.
"In Lithuania, employers often choose additional health insurance as a motivational tool to attract professional employees. It is likely that after the tax relief is abolished and additional taxation is introduced, employers will be forced to reconsider such initiatives and most employees may lose additional health protection. These changes would demotivate companies that invest in the well-being and health of their employees," says J. Tomašėvič.
These tax changes would further burden the public health sector, which would make waiting lists even longer. Without additional health coverage, employees would likely turn to public medical institutions, where the average waiting time for most specialists is already 3-4 months, and sometimes the wait is six months or even longer.
According to J. Tomašėvič, public healthcare services are already difficult to access and burdened, and the consequence of tax reform would be like a chain reaction that would only worsen the situation even more and return us to the times of 15 years ago.
Authorities are invited to responsibly assess the consequences of such a proposal.
"We call on the authorities to responsibly assess the planned changes. If the number of privately insured persons decreases due to tax changes, the majority of them will be forced to return to the state system, which is already heavily burdened and is not properly prepared to accept another, large, additional flow of patients. This will further increase queues in the country's medical institutions and reduce the availability of services to residents. Especially for those who have no alternatives - pensioners, children, socially vulnerable people," says J. Tomašėvič.
Representatives of the insurance market are convinced that the planned tax changes need to be reconsidered and the current plans abandoned, as the current regime encourages companies to invest in employee health, reducing the number of days off work due to employees falling ill, and thus contributing to the country's economy.
