Poland Slashes Health Insurance Costs for Small Business Owners in 2025
Warsaw, Wednesday, 20 November 2024.
In a significant move to support entrepreneurs, Poland’s government will reduce health insurance contributions for nearly 1 million business owners starting January 2025. The reform, cutting minimum contributions by 25%, aims to provide relief particularly to low-income businesses, saving them approximately PLN 100 monthly. This marks the largest insurance reform since the controversial Polish Deal, though it will create a PLN 945 million deficit in the National Health Fund that the government pledges to cover through the 2025 budget.
Government’s Strategic Shift
The Polish government’s decision to slash health insurance contributions is part of a broader strategy to alleviate financial pressure on small and medium-sized enterprises (SMEs). This initiative, set to commence in January 2025, is designed to counterbalance the financial strain imposed by the earlier Polish Deal tax reforms. By reducing the minimum contribution base to 75% of the national minimum wage, the government aims to enhance economic growth and stability among business owners with lower incomes or financial losses[1].
Balancing the Economic Scale
Despite the projected PLN 945 million shortfall in the National Health Fund, the Polish government assures stakeholders that the gap will be addressed with the 2025 national budget allocations. This assurance comes amidst concerns over the financial implications of such reforms. The government has emphasized that this reform is a calculated measure to stimulate economic activity without compromising the financial integrity of the healthcare system[2].
Impact on Entrepreneurs
The reform is expected to benefit approximately 935,000 business owners, particularly those taxed under progressive scale, flat tax, or tax card systems. Entrepreneurs with earnings up to 1.5 times the average monthly wage will see their contributions reduced to 9% of 75% of the minimum wage. This adjustment is aimed at providing financial relief to those most affected by the economic challenges of recent years[1].
Future Implications
While the reform is welcomed by many, experts such as Michał Myck from the CenEA Centre for Economic Analysis warn of potential disparities between contributions from business owners and employees. The government, however, remains optimistic that these changes will lead to a more equitable system. By balancing reduced contributions with the need for financial stability in healthcare, Poland is navigating a complex economic landscape to foster a more supportive environment for its entrepreneurs[2].