St Gallen sick pay premiums: reduction and models

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.

Deductibles: a strategic choice

Deductibles are fixed by federal law. Adults can choose between CHF 300, 500, 1000, 1500, 2000, 2500 per year. The deductible is the first amount the policyholder pays out-of-pocket in a calendar year; above that threshold, the insurer covers 90% of costs up to an annual maximum, then 100%.

The choice of deductible directly influences the monthly premium: lower deductibles (CHF 300) lead to higher monthly premiums; higher deductibles (CHF 2500) reduce the premium. The decision depends on personal health needs. Those with chronic conditions or expecting frequent care are better off choosing a low deductible; young and healthy individuals can opt for a high deductible to save on the annual premium.

Alternative models

Besides the standard model with full access to specialists, LAMal allows enrolment in alternative models: the HMO model requires joining an HMO network and selecting a primary care physician, with access to specialists only by referral. There is also the compulsory primary-care model outside structured networks. These models generally have lower premiums than the standard model. The model choice is annual (like the deductible) and can be changed by 30 November for effect from 1 January.

Entitlement to the cantonal reduction

Each canton administers its own reduction programme independently. There is no single federal income threshold: each canton sets its own limits based on gross income, wealth and personal situation (single, couple, dependents). In general, the reduction targets low-to-medium incomes, with coverage varying according to the canton’s generosity and the income bracket.

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.

If you do not renew the application, starting 1 January of the following year you lose the reduction and must pay the full premium. Many people forget the deadline—it is wise to mark the cantonal deadline for submission in your calendar.

If your income rises and exceeds the cantonal threshold (for example, due to a promotion, marriage to a spouse with higher income, inheritance), the entitlement to the subsidy is withdrawn. In this case you do not need to submit a new application; the office will communicate the withdrawal ex officio.

Variability between cantons and choice strategies

Although LAMal is regulated at the federal level, cantonal policies on the reduction vary greatly. Some cantons are more generous in coverage; others are more conservative. This variability reflects cantonal fiscal and social differences and the Swiss federalist principle.

Anyone moving between cantons should expect a change in average premiums and subsidy entitlement. It is reasonable to consult the information of the new canton before moving to assess the impact on LAMal. Those dissatisfied with their health insurer have the right to switch each year (by 30 November), free of charge and without penalties. This is an opportunity to seek better premiums or models better suited to one’s needs.

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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.

Critical deadlines to mark

Each year the LAMal calendar sets fixed deadlines: November 30 is the deadline for changing health insurance providers (effective January 1); the cantonal deadline for reduction applications varies by canton (November, December, January, March, June—check yours). Don't wait until the last minute: administrative deadlines are strict, and delays result in loss of eligibility for that year.

Useful tools for comparing and deciding

Consult the following resources for canton-specific information: official municipal website (Tax or Social Services section), cantonal office responsible for premium reductions, LAMal calculator and insurance provider comparison tool to check premiums and alternative plans, cantonal toll-free number or contact email for administrative questions.

Remember: the reduction is not automatic. Those eligible must actively request it every year before the deadline set by their canton. Don't wait: the subsidy typically takes effect the month following approval of your application, not retroactively.