Previously, this tax exempt status was limited to sports and private health insurance packages, "Aktuaalne kaamera" reported.

Starting 2025, employers will also be able to pay for employees' dental care, physiotherapy, or visits to a nutrition counselor or mental health specialist, again making use of a tax exemption.

Some employers choose to support employees with specific health services, while others find more general health insurance packages more practical.

HR Manager at fuel retailer Alexela Marjut Engelbrecht said: "From an employer's perspective, we want to offer our staff significantly broader opportunities on their health and well-being."

"Dental care and mental health are the cornerstones of a person's health," she added.

"But people have many other health concerns. And they don't always have to be concerns; this can also simply be a desire for pre-emptively avoiding health problems," Engelbrecht went on.

At Alexela staff can choose whether the employer partially covers their sports opportunities or private health insurance.

Of its roughly 500 employees, more than half, 350 in total, prefer the private doctor option.

"Here, we can clearly see greater benefits coming from health insurance or medical insurance," Engelbrecht added.

Minister: Should make intervention happen earlier than before

Health Minister Riina Sikkut (SDE) said: "Since this benefit is intended for health promotion and disease prevention, intervention should actually happen even earlier, be it through a dental technician, psychologist, or counselor whose services the employee needs."

"In the future, employers can fund this without paying fringe benefit tax," Sikkut went on.

Within Europe, Estonia stands out due to its very high level of personal out-of-pocket expenses when it comes to healthcare; a significant portion of it paid-for dental care.

According to Minister Sikkut, the change is not intended to reduce the burden of out-of-pocket costs, but was implemented by the Ministry of Finance at employers' requests.

Marja-Liisa Alop, CEO of private clinic chain Meliva said the change would bring greater flexibility.

"This doesn't suit all employers; not everyone wants the entire private health insurance package and is willing to contribute to a specific service. Dental care is often an example where employers want to help with the costs, which are known to be very high," Alop said.

Meliva's experience she added is that private health insurance is most commonly used for dental care, and also for mental health issues and family doctor consultations.

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