Swiss sickness benefit insurance in 2027: what to do when the premium rises or the insurer cancels

Has a letter from your daily sickness benefit insurer arrived with a higher premium rate, or even a cancellation? Then this is what applies this November: don't cancel until a new insurer has confirmed cover in writing. Check what your employment contracts promise for sickness, because you owe that even without insurance. And work out a longer waiting period in francs before you sign.

From January 1, 2027, Swiss insurers will for the first time run a safety net for employers that can no longer find cover. It only helps in clearly defined situations, and if you're without a contract at the end of 2026, you can use it from July 1, 2027 at the earliest. This article explains the new rules, the deadlines and a worked example for a business with 20 employees. If you run the Swiss entity of a foreign group, the same rules apply to it.

What this is about

Daily sickness benefit insurance (Krankentaggeldversicherung) usually pays 80 percent of salary after a waiting period, often for 720 or 730 days. The waiting period covers the first days of an illness, during which the insurance doesn't pay yet. Cover is voluntary unless a collective labor agreement (Gesamtarbeitsvertrag, GAV, the sector agreements negotiated between employer associations and trade unions) requires it. Even so, around 84 percent of employees in Switzerland work for a company that has it.

That figure comes from the Federal Council's report of August 19, 2026. It is based on a representative survey the federal government commissioned for it: 4'000 companies contacted, results from December 2025. These are the companies' own answers, not claims data. The survey also shows why the topic is pressing. 35 percent of companies saw a premium increase in the past five years, and among mid-sized companies with 50 to 249 employees it was two thirds. Increases mostly followed higher claims or a larger payroll. Cancellations by insurers are rare: they affected 2 percent of insured companies. But 75 percent of those found it hard to get new cover afterward, and 97 percent had to accept worse terms. Both figures come from this small subgroup of the survey, so treat them as a rough indication only.

Small businesses feel this more. With ten employees, one long illness is a large share of the payroll, and the insurer adjusts the premium to the claims record at the next renewal. In May 2026 the newspaper of the Zurich cantonal trade association described such a case: after several sickness cases, a media company with four employees went from paying about CHF 2'500 to CHF 5'000 and then CHF 7'500. Other insurers would have charged about CHF 10'000.

What changes on January 1, 2027

The insurers have revised their free passage agreement (Freizügigkeitsabkommen). It governs what happens to insured employees when an employer changes insurer, and it's an industry rule among the companies that have signed it. The new version takes effect on January 1, 2027. According to the Swiss Insurance Association (SVV), the insurers that have signed it cover more than 98 percent of the market for collective daily sickness benefit insurance. Two changes affect employers directly.

Interim payment for running cases. If you change insurer and the old and new insurer disagree on who covers a sickness case that is already running, the previous insurer keeps paying the daily benefit for now, at the same level. The insurers settle between themselves who was responsible.

Assignment for employers without cover. If an employer can't find daily sickness benefit insurance through no fault of its own, it can apply to a new assignment office (Zuweisungsstelle). The office assigns it to an insurer that has signed the agreement, and that insurer must make an offer. You need written rejections from at least three insurers that have signed the agreement. The assignment guarantees an offer, not a particular premium. You can't choose the insurer you're assigned to. If you reject its offer, you can only apply again six months after the date on which the offered contract would have ended. Since these contracts run for at least two years, that's about two and a half years.

Fault on your side means incorrect information when the contract was taken out, unpaid premiums, insurance fraud, deception or a cancellation for good cause. If a contract was canceled for incorrect information, fraud or deception, you're excluded for five calendar years; for unpaid premiums, two.

The agreement covers employees. Personal sickness benefit insurance for the self-employed isn't included, and assignment doesn't apply to contracts under the Health Insurance Act (KVG). If you're employed by your own company and insured as an employee, you're covered.

Where to apply. The assignment office opens on January 1, 2027. The SVV has said it will publish on svv.ch, in good time, how to apply and how to reach the office. On November 2, 2026, those details weren't there yet. The agreement and the list of insurers that have signed it are published.

Three letters, three paths

Which rule applies to you depends on what your insurer's letter says.

Letter	Immediate assignment?
The premium rises, at most to three times the current rate	No. If you cancel yourself, only six months after the contract ends. Only cancel once a new insurer has confirmed cover in writing.
The premium rate rises to more than three times, same cover	Yes, with three rejections, back to your previous insurer, at no more than three times the rate. An expensive offer doesn't count as a rejection.
The insurer cancels	Canceled for December 31, 2026: from July 1, 2027 at the earliest. From 2027: yes, with three rejections. Until a new contract starts, you pay sick pay yourself.

The premium rises, at most to three times

This is the most common case, and the safety net changes little here. As long as you have a contract, there's no assignment. If you cancel yourself or reject the offer and then find no new insurer, you can only apply for assignment six months after the old contract ends. You're then assigned in the alphabetical order of insurers, at a risk-based premium, and you pay the assignment office's fee in advance. For the six months in between, you carry sick pay yourself.

So ask for quotes, with the same cover and with options for the waiting period. You can get them from insurers directly or through a broker. Only cancel once you have written confirmation, and check the deadline for doing so, as described in the next section.

The premium rate rises to more than three times

If your current insurer offers more than three times the premium rate for the same cover, you can reject it and apply for assignment right away. You need the three rejections from other insurers, and you enclose your current policy and the new offer. You're then assigned back to your previous insurer. It must offer at least your current cover, without new exclusions for individual employees, and may at most triple the last premium rate. The contract runs for a fixed term of at least two years. During that time the insurer waives ordinary cancellation and cancellation after a claim. If you apply before the contract ends and the signed offer reaches the insurer before that date, cover starts at the earliest on the day after the old contract ends, so without a gap.

Two points are easy to miss. Under the wording of the agreement, a rejection only counts if an insurer makes no offer at all. An expensive offer is still an offer. And the rate can rise during the two years if the insurer adjusts its general tariff; the agreement caps that increase at 200 percent, so at most three times the rate. Other increases are ruled out during that time, and afterward the usual rules apply again. In the Zurich case, the tripling came in two steps, and the other insurers made offers. Under the new rules, neither step would have opened immediate assignment, as long as the cover stayed the same.

The insurer cancels

If the insurer cancels through no fault of yours, the date matters.

• Canceled for December 31, 2026. A transitional rule applies. If you're without a contract on January 1, 2027, you can apply for assignment from July 1, 2027 at the earliest, in alphabetical order. The new insurer must then offer basic cover: a 30-day waiting period, 80 percent of insured payroll, 720 or 730 days minus the waiting period, at a risk-based premium. If the contract insures five people or fewer, it may add new exclusions for individual employees where its terms allow. Until the new contract starts, you pay sick pay yourself, under the law and under your employment contracts.
• Canceled from 2027 onward. With three rejections you can apply for assignment right away, back to your previous insurer if it has signed the agreement, up to six months after the contract ends. The same limits apply as above: at least your current cover, at most three times the rate.

This return applies to a cancellation without a new premium offer. If the insurer cancels and offers you a new contract at up to three times the rate at the same time, the rule for increases applies: if you turn it down, you wait six months after the contract ends.

Running cases stay covered. If the insurer cancels, it keeps paying for sickness cases that are already running until the employee recovers or the benefit period runs out. The SVV says so, and the Insurance Contract Act voids clauses that let an insurer cut such running benefits on its own when the contract ends (Art. 35c VVG). It doesn't pay for new cases after the contract ends. If you switch between two insurers that have both signed the agreement, the new insurer generally takes over running cases, at the previous daily benefit, waiting period and benefit period; the law expressly allows for such a switch (Art. 35c para. 2 VVG). If the two insurers disagree, the previous one keeps paying in the meantime.

Your employees can switch to individual cover with the same insurer, without exclusions. They then pay the premium themselves unless the employer contributes. Swiss law requires employers to inform employees about their claims against insurers (Art. 331 para. 4 of the Code of Obligations, OR). A short letter stating this right, the deadline from the policy terms and the insurer's contact details is the simplest way to do that.

The deadline: what you can still do in November

Ordinary cancellation is governed by Art. 35a of the Insurance Contract Act (VVG). It works to the end of the third or any later insurance year, with three months' notice, in writing or another form that allows proof by text, such as email. If your policy ends on December 31, the notice had to reach the insurer by September 30. For January 1, 2027, that route is usually closed. The parties may agree that the contract can be canceled earlier; your policy says what applies. In collective daily sickness benefit insurance, both sides can cancel this way, and also after a claim (Art. 35a para. 4 VVG).

When the premium rises, there is often a second route. Many policy terms then allow cancellation at the end of the insurance year, and the notice often has to reach the insurer by the last day of that year. They often also say that if you don't respond, you accept the new premium. This right comes from your policy terms. Look for the section on premium adjustments or tariff changes, and check how and by when the notice must arrive. Send it by registered mail or ask for written confirmation of receipt.

Your employment contract's promise applies even without insurance

Without a specific agreement, the law applies: an employee who is ill through no fault of their own receives three weeks' salary in the first year of service and an appropriately longer period after that (Art. 324a OR). Courts have set this out in scales, which our article on sick leave at small Swiss firms shows. Daily sickness benefit insurance only replaces this obligation if it's agreed in writing and is at least equivalent for employees (Art. 324a para. 4 OR).

Under the case law summarized by SECO, the State Secretariat for Economic Affairs, and the employers' association Swissmem, an arrangement is equivalent with

• 80 percent of salary for 720 days within 900 days,
• no more than one to three unpaid days at the start (Karenztage), depending on the court,
• a premium of which the employer pays at least half.

The arrangement is judged as a whole; whether someone is better or worse off in a single case doesn't matter. If it isn't equivalent, the employer owes the difference up to full salary for the statutory period. Three points follow that matter whenever the policy changes.

The promise stands. If the contract says employees receive an insurance daily benefit when sick, you must actually have that insurance. The Federal Supreme Court has ruled that an employer who doesn't take out promised collective insurance is liable for the resulting loss to employees (BGE 127 III 318, consideration 5). That case involved a collective labor agreement. In its report, the Federal Council relies on the ruling for written individual employment contracts as well. If the promised insurance is missing, expect to answer for what it would have paid.

The wording matters. A sentence like "The company pays 80% of salary for 720 days" can make the employer the payer if the insurance doesn't pay for any reason. Swissmem explicitly advises against it. A reference to the insurance and its terms, which you hand to employees, is safer.

The waiting period belongs in your staff regulations. During the waiting period the insurance pays nothing. Because an equivalent arrangement allows no more than one to three days without pay, employers usually keep paying during this time, often 80 percent. If you extend the waiting period from 30 to 60 days, salary for days 31 to 60 shifts from the insurer to you. If your staff regulations (Personalreglement) say "from day 31 the insurance pays", that promise to your employees stands even if the new policy says 60 days. Update your regulations and contracts in writing before the new policy takes effect.

How much of the premium you may deduct

You may deduct part of the premium from salaries if the employment contract or staff regulations provide for it. The written agreement must show how the premium is split, and for equivalence the employer pays at least half. When the premium rises, the wording decides:

• If it says "half the premium", the deduction rises with the premium. Let employees know before the first payroll run of 2027.
• If it sets a fixed rate, such as 0.75 percent of salary, that rate generally applies until you change it in writing with your employees.
• If you deduct more than half, equivalence is at risk, and with it statutory sick pay comes back.

Worked example: a business with 20 employees

Assumptions: 20 employees, each on a monthly salary of CHF 6'500 paid 13 times a year, so a payroll of CHF 1'690'000, as in our article on the 2027 pay review. Today's premium rate of 1.5 percent is an assumption for this example. It falls within the range of 1 to 2 percent of payroll that, according to the Federal Council, 58 percent of companies pay; 22 percent pay 3 to 4 percent, and 5 percent pay more than 4 percent. The premium is split equally. Your own quote replaces this assumption.

The three rows show today's premium rate, the rate after a 60 percent increase and the rate after tripling.

Rate	Annual premium	Deduction
1.5%	CHF 25'350	CHF 48.75
2.4%	CHF 40'560	CHF 78.00
4.5%	CHF 76'050	CHF 146.25

The employer pays half the premium in each case: CHF 12'675, CHF 20'280 and CHF 38'025 a year. The payroll deduction applies to each monthly salary, so 13 times a year.

The threshold. At 1.5 percent today, only an offer above 4.5 percent for the same cover opens immediate assignment, and even then only with three rejections. Anything below that is the first letter: you negotiate, switch once you have confirmation, or accept.

The deduction. If the employer wanted to keep its share at CHF 12'675, employees would pay CHF 27'885 at 2.4 percent, or 68.75 percent of the premium. That's more than half, so the arrangement would no longer be equivalent.

The waiting period in francs. At an annual salary of CHF 84'500, one calendar day costs CHF 231.51. If you pay 80 percent during the waiting period, 30 more days of waiting period cost about CHF 5'556 for every case that lasts longer than 60 days, or about CHF 6'945 at full salary. Cases lasting 31 to 60 days cost a proportional amount. Social security contributions come on top, because salary is subject to AHV contributions and daily benefits are not. So a longer waiting period only pays off if the annual premium falls by more than you'd pay for the extra days in a bad year: with two long cases, more than CHF 11'000.

According to the Federal Council, 49 percent of companies with collective cover have a waiting period of 15 to 30 days and 28 percent one of 31 to 60 days. The Zurich business moved from 30 to 60 days, and the premium fell to about CHF 4'500. "But the risk now sits much more with us," the owner said. Shortly afterward an employee was partly off sick, and he paid for the absence himself. He told the paper he probably now pays more than he did with the high premium.

In January: payroll and talking to your team

New deduction from the first payroll run. If the premium rate changes on January 1, switch the deduction in the January payroll. Tell employees beforehand what's changing, why and from when. Otherwise the questions only come with the payslip.

Record daily benefits and salary separately. Daily benefits from the insurer aren't part of the salary subject to AHV contributions. What the employer pays itself is: salary during the waiting period and any top-up to 100 percent. So each needs its own pay code.

Report the payroll. Many contracts bill a provisional premium and settle it at year-end based on the payroll you report. If the report is right, so is the final bill.

Handle departures. Anyone who leaves is told in writing whether, and by when, they can switch to individual cover.

What lowers the premium over time

The premium follows the claims record. Long absences drive it up, and long absences are often decided in the first weeks: staying in touch, using partial capacity for work, planning the return and accepting the insurer's case management. Our article on sick leave shows what that looks like in the first 30 days. How we work with managers on the causes is described under Healthy leadership.

Politically, it's open whether mandatory cover will come. The National Council passed a motion for it in 2023. On September 2, 2026, the social security and health committee of the Council of States took note of the Federal Council's report and plans hearings before it decides, including on the insurers' model. For 2027, the industry solution is what applies.

What to do this week

1. Put the letter, policy and terms side by side. How high is the new rate, does the cover stay the same, and what deadline applies to cancellation after a premium change? Some contracts include a profit share that is lost if you cancel before the end of the settlement period.
2. Read your employment contracts and staff regulations. Six questions are enough: What does the employer pay during the waiting period? Which daily benefit applies, and for how long? Is the premium split in half or at a fixed rate? Does a collective labor agreement set its own rules? Who is insured, including working owners, hourly staff and people above the AHV reference age? Does any clause say "The company pays"?
3. Ask for quotes. With the same cover and with options for the waiting period. Keep every rejection in writing.
4. Do the math. Compare the saving from a longer waiting period with the cost of the extra days.
5. Decide. Only cancel once you have confirmation, update contracts in writing and inform your team before the January payroll.

We review employment contracts and staff regulations in our HR check, including what they promise for sickness. Switching deductions for January, processing daily benefits and reporting payroll are part of our payroll service, and absences and departures are part of HR administration. A first conversation takes 30 minutes: book an intro call.

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Note: This article reflects the position in November 2026 and does not replace legal advice in an individual case. The insurers' agreement is an industry rule and may change. What counts is your policy, its terms and, where applicable, your collective labor agreement.

Sources (12)

Sources: Swiss Insurance Association (SVV), "Das neue Freizügigkeitsabkommen KTG: Das Wichtigste im Überblick", October 9, 2026, German · SVV agreement on free passage between daily sickness benefit insurers, version of March 24, 2026, in force from January 1, 2027, German · Federal Council, "Handlungsoptionen bei der Krankentaggeldversicherung", report of August 19, 2026, German · Swiss Code of Obligations, Art. 324a and 331 (English translation, not legally binding) · Insurance Contract Act (VVG), Art. 35a and 35c, German · SECO, FAQ on employees prevented from working, German · Swissmem, "Krankentaggeldversicherung: Was gilt es zu beachten?", November 10, 2023, German · Federal Supreme Court, BGE 127 III 318 of March 6, 2001, German · SVV, factsheet "Krankentaggeld unter Druck", July 2026, German · Federal Social Insurance Office, guidelines on relevant salary (WML), marginal nos. 2081 to 2084, German · Swiss Parliament, press release of the Council of States' social security and health committee, September 2, 2026, German · Zürcher Wirtschaft, "Wenn die Krankentaggeld-Prämie explodiert", May 15, 2026, German