Group health insurance rules are designed for employer-employee relationships. But what about a large slice of the Hungarian economy: small taxpayers, flat-tax sole traders, few-person ventures? Role by role.
The sole trader as employer
If a sole trader has employees, group health insurance can cover them exactly as any company’s staff – with the favourable tax rules. The 2-person minimum applies here too (details).
The small taxpayer as insured
Since the 2022 KATA reform, a small taxpayer (KATA) can only be a full-time sole trader, and cannot earn revenue from any payer, foreign payers included (with the exception of taxi passenger transport) – otherwise their KATA status is terminated. A KATA small taxpayer's insurance cover can therefore typically only be arranged as an individual policy, paid from their own income; the flat tax's substitutive effect covers only the small taxpayer's own business revenue, and the tax treatment of a premium paid by a third party depends on the legal relationship – consult your accountant.
The sole trader covering themselves
The prime territory of misunderstandings. Alone, a sole trader is not a „group" – the group structure conceptually requires multiple insured persons. Own cover is therefore solved either with individual health insurance (from net income) or – with at least one employee – within a joint group contract, after clarifying the legal relationships. Cost deductibility is case-specific: align with your accountant.
Contractor and mixed populations
With mixed teams – employment, contractor, subcontractor – defining the insured population is delicate: favourable taxation and CIT treatment hinge on relationship type. Contract structuring here is not template work; this is exactly where a 20-minute upfront consultation beats any later correction.
Informational content, not tax advice – with mixed populations especially, seek your accountant’s confirmation.
A question about your own team? Book a free 20-minute consultation →
