„We have a health fund – isn’t that the same?" A common question, and the answer is no. The two instruments can complement each other, but their core logic differs fundamentally.
The health fund: a dedicated savings account
A fund balance is your own money: contributions accumulate and can be spent on health-related costs – medicine, private invoices, glasses. Individual contributions are incentivised by a state tax credit. What it offers: a flexible spending budget. What it cannot do: once the balance runs out, that is it – one longer diagnostic journey can drain it fast.
Health insurance: access to services
With insurance, the insurer carries the risk, not your balance – services are due up to the annual and per-event limits set out in the terms, and within those limits, regardless of how many times you use them. You also get organisation: the care coordinator books your appointments.
Taxation differs too
Corporate group health insurance – under a genuine group contract with an undivided premium, where the part of the premium attributable to one insured person cannot be determined even by apportionment – is taxed as a specific defined benefit at a 33.04% payer-side burden. Employer contributions to health funds are treated differently and less favourably – it is worth having your accountant run the comparison for your specific case.
When to use which – and when both
- If the goal is helping the team access care faster: insurance can typically support that.
- If the goal is a flexible health spending budget: the fund.
- Together they are a strong pair: insurance carries examinations and screening; the fund covers medicine, glasses and co-payments.
For the full picture of how group insurance works, see our guide.
A question about your own team? Book a free 20-minute consultation →
Sources
- Act CXVII of 1995 on Personal Income Tax (Szja tv.) – Section 3 point 89 b) (the part of a group insurance premium attributable to the insured person; sub-point bb): where the premium attributable to the individual cannot be determined even by apportionment), Section 70 (6) b) (specific defined benefit)
- NAV (Hungarian tax authority) – Taxable insurance premium (guidance, 14 May 2020): the premium of a genuine group risk insurance with an undivided premium is a specific defined benefit; a premium that can be determined per insured person is income under the legal relationship
