St Gallen sick pay premiums: reduction and models (cross-border guide)

Context

In brief

• LAMal is compulsory health insurance for all residents in Switzerland
• Adult deductibles: CHF 300, 500, 1000, 1500, 2000, 2500 (policyholder's choice)
• Premiums vary by canton, region and chosen model (standard, HMO, high deductible)
• Premium reduction: cantonal subsidy financed with local taxes, based on income/wealth

Key facts

• What: LAMal (compulsory health insurance, Swiss compulsory health insurance)
• Who: All residents (Swiss and foreign citizens, to be taken out within 3 months of arrival)
• Type: Private insurance with per-capita premiums, NOT a tax nor a payroll contribution
• Deductibles: CHF 300-2500 per year for adults (fixed by federal law)
• Reduction: Cantonal subsidy for low/medium-low incomes, mandatory annual request

What is LAMal and the role of the reduction

Compulsory health insurance (LAMal in Italian, KVG in German and French) is the cornerstone of the Swiss healthcare system. All residents—Swiss and foreign citizens—are required to take out a policy with an authorised private insurer within three months of arriving in Switzerland.

Unlike in other countries, LAMal is neither a tax nor a payroll contribution, but a genuine insurance with individual premiums paid directly to the insurer each month. Premiums vary strongly according to the canton of residence, region and the chosen coverage model (standard model, HMO, high deductible).

A central aspect of LAMal is the premium reduction, also called a subsidy. It is a contribution financed by the cantonal and municipal taxes, intended for people with low or medium-low income. It is not optional: if you are entitled, you must actively apply to the municipality or the competent cantonal office.

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Operational details

When and how to apply for the reduction

The premium reduction application must be submitted each year to the municipality of residence or directly to the competent cantonal office (varies by canton). Deadlines are cantonal—generally by March, June, or November of the previous year to cover the following fiscal year—so it is essential to check the deadline with your own municipality.

To submit the application you need:

• Federal tax return of the previous year
• Salary certificate from the employer or self‑employment income declaration
• Asset declaration (real estate, bank accounts, securities)
• Cantonal application form, available at the municipality or downloadable from the official website

Many cantons provide online calculators to estimate eligibility for the reduction before filing the official application. It is advisable to use them to verify whether you qualify, so as to avoid surprises.

Once the application is submitted, the cantonal office processes it usually within 2–6 weeks. If approved, the policyholder receives a letter with the monthly subsidy amount. Usually, the subsidy is granted as a direct discount on the policy (the policyholder pays the reduced premium) or as a direct reimbursement from the canton to the policyholder.

The subsidy is not automatic and must be renewed every year

A common mistake is to believe that the reduction, once obtained, continues automatically in subsequent years. This is not the case: the subsidy expires on 31 December each year. To keep it, you must file a new application with updated documentation (latest income, assets) following the same cantonal deadlines.

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Key points

Step-by-step procedure for requesting the reduction

Step 1: Verify your eligibility Access your canton's official website (tax section, social services, or health) and consult the reduction calculator if available. Enter your gross income, assets, and personal situation data for a preliminary estimate of your eligibility.

Step 2: Gather the documentation Prepare a copy of the previous year's federal tax declaration, employer salary certificate or self-employment income statement, asset documentation (bank statements, property certificates), current LAMal policy number.

Step 3: Obtain the cantonal form Download the application form from your municipality or canton website, or pick it up at the municipal office. Forms vary slightly by canton.

Step 4: Complete and submit Complete the form with the required information. Attach all original documentation or certified copies. Submit to the municipal office or send by registered mail before the cantonal deadline.

Step 5: Application processing The cantonal office processes the application, typically within 2–6 weeks. If approved, you receive a letter with the monthly subsidy amount and payment details.

Step 6: Annual renewal Don't forget: repeat the process every year before the cantonal deadline. Keep receipts of submission and approval letters.

What to do if the amount is less than expected

If you believe the subsidy calculation is incorrect or insufficient, you have the right to contest the decision. Contact the cantonal office for clarification, providing your current data (income changes, assets, personal situation). Some cantons also provide an administrative appeal procedure if you disagree with the decision.

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