Premium Subsidy (Individuelle Prämienverbilligung, IPV)

Concept and Function

Because premiums in Swiss mandatory health care insurance are levied as income-independent per-capita premiums, the legislator provides social balance through the individual premium subsidy. Under Art. 65 para. 1 KVG the cantons grant premium reductions to insured persons of modest economic means. For children and for young adults in education from lower- and middle-income households, Art. 65 para. 1bis KVG prescribes minimum reductions of 80 % and 50 % of the premium respectively. Under Art. 66 KVG the Confederation contributes an annual amount equal to 7.5 % of the gross costs of basic insurance, distributed among the cantons by resident population; the cantons bear the remainder. The indirect counter-proposal to the premium relief initiative rejected in 2024 additionally obliges the cantons to a minimum contribution linked to the premium burden in each canton.

Cantonal Implementation

The cantons independently define eligibility, income and asset thresholds and procedure, which is why take-up rates and subsidy amounts vary considerably between cantons. Under Art. 65 para. 1 KVG the subsidy is paid directly to the insurer and offset against the premium, so the insured person receives a reduced invoice. Cantons must periodically inform eligible persons of their entitlement; in many cantons eligibility is assessed automatically from tax data, in others an application is required. Art. 65a KVG governs premium subsidies for insured persons resident in an EU/EFTA state, in particular cross-border commuters.

Country Comparison and Practice Note

In Germany and Austria the social balance is already built into the income-related contribution; there is no separate premium subsidy, although contribution ceilings and family co-insurance exist. For employers in Switzerland the IPV matters mainly in low-wage segments and when advising foreign staff: an employer contribution to health insurance premiums counts as salary and can reduce the IPV entitlement, so employee benefit concepts should take this interaction into account.