General Health Insurance Law 4-A 4-B and 4-C Scope

General Health Insurance Law 4-A 4-B and 4-C Scope. Throughout the history of the Republic, Turkey’s social security architecture has exhibited a fragmented and dispersed structure; it was built upon three separate pillars: the Social Insurance Institution (SSK) for workers, Bağ-Kur for tradesmen and independent workers, and the Pension Fund (Emekli Sandığı) for civil servants. The Social Insurance and General Health Insurance Law No. 5510, accepted in 2006 and fully effective as of October 2008, aimed to achieve “institutional unity” by merging these three institutions under the roof of the Social Security Institution (SGK). However, actuarial analyses and legal reviews conducted over the past fifteen years indicate that while institutional unity has been achieved, “unity of norms” and “equality of status” have not been fully realized. The legislator, considering the ontological differences in working life, divided employees into three main categories under paragraphs (a), (b), and (c) of Article 4; leaving deep structural chasms between these categories in terms of entitlements, premium obligations, access to health services, and pension calculation models.

This report analyzes the legal basis of these statuses in light of 2025 macroeconomic data and minimum wage parameters. The fundamental finding of the report is that the 4/A (Employees under Service Contract) status is balanced with job security and severance pay, the 4/C (Public Officials) status provides the highest security with administrative law guarantees and the additional indicator system, whereas the 4/B (Independent Workers) status is positioned as the most disadvantaged group in terms of social security rights despite bearing capital risk. Particularly, the increase of the gross minimum wage to 26,005.50 TL in 2025 and the structural differentiation in Treasury incentives (5 points discount in the manufacturing sector, 4 points in other sectors) have radically changed employer costs and the premium burdens of independent workers. This study aims to be a guiding reference source within the complex labyrinth of legislation, addressing each status within a life cycle lasting from “entry into employment to retirement and even death.”

Section 1: Transformation of the Turkish Social Security System and Legal Characteristics of Statuses

To understand the current differences in the social security system, it is essential to analyze the paradigm introduced by Law No. 5510 and the historical legacy upon which this paradigm is built. Although the concept of “Insured” appears to be a uniform definition of citizenship, the individual’s relationship with the state differs radically depending on their legal status.

1.1. The Ideal of Norm Unity and the Current Fragmented Structure

Before Law No. 5510, it was not even possible for an SSK member and a Pension Fund member to go to the same hospital, whereas after the reform, unity was largely achieved in access to health services. However, in long-term insurance branches such as system financing and retirement, the reform created a hybrid structure due to the principles of “gradual transition” and “protection of acquired rights.” Today, the distinction between 4/A, 4/B, and 4/C is not just a coding difference, but a “social class” difference.

Legal Nature of 4/A Status (Service Contract): This status is based on the Code of Obligations and Labor Law. The basic element is “dependency.” The person works not with their capital, but with their labor and under the organization of another. This dependency relationship pushed the legislator to a reflex of “protecting the worker”; mechanisms such as severance pay, notice pay, and unemployment insurance are specific to this status.
Legal Nature of 4/B Status (Independence): Here, the person determines their own destiny. There is no employer authority. The risk lies entirely with the insured. Therefore, the state has developed legislation focused on “collecting premiums” from the 4/B member rather than protecting them. The inability to receive “unemployment salary” when unemployed (except for voluntary participation) or inability to receive severance pay when bankrupt is a consequence of this “independence” assumption.
Legal Nature of 4/C Status (Status Law): The public official performs the state’s essential and continuous duties. The relationship is established not by contract, but by “appointment” (administrative act). Therefore, the retirement rights of 4/C members are determined not by market conditions or the premiums they pay, but by their position in the state’s hierarchical structure (degree, rank, additional indicator). This is the sharpest “shield” separating 4/C from the other two statuses.

1.2. Scope and Registration Differences

Insurance is not a choice depending on the individual’s will; it is mandatory by law. However, the moment and mechanism of “registration” vary according to statuses.

4/A Registration: The employer must notify the SGK with the “Statement of Insured Employment Entry” at least one day before starting to employ the worker. Exceptionally, notification can be made on the day work starts in construction, fisheries, and agricultural workplaces. Insurance becomes effective with the actual commencement of work by the employee.
4/B Registration: Insurance starts automatically with tax liability, tradesmen chamber registration, or registration of company partnership. However, in practice, 4/B registration occurs through the person’s own declaration or the integration of institutions (notification from the tax office to SGK). The “Bağ-Kur registration grievances” experienced in the past (those with tax records but no Bağ-Kur records opened) have been largely tied to automation with Law No. 5510.
4/C Registration: It occurs with the appointment approval of the public administration and the letter of commencement of duty. Although there are concepts such as “probationary period” in 4/C registration, general health insurance (GSS) activation occurs much faster and unconditionally compared to other statuses.

Section 2: Premium Regime, Cost Analysis, and 2025 Variables

The most concrete and measurable difference between insurance types lies in the amount of premiums paid, the rates, and whose shoulders this burden falls on. The year 2025 has necessitated a recalculation of these costs, especially due to minimum wage increases and structural changes in Treasury incentives.

2.1. Premium Structure and Employer Cost in 4/A (Worker) Status

Although the premium burden in 4/A status is theoretically shared between the worker and the employer, in economic analysis, the entire burden is written to the employer’s account as “labor cost.” With the gross minimum wage determined as 26,005.50 TL according to 2025 data, the base assessment has been pulled to this level.

Premium Rates and Distribution

Premiums deducted for 4/A insured persons under Law No. 5510 are gathered under four main headings:

Invalidity, Old Age, and Death Insurance (MYÖ): The rate is 20%. 9% is deducted from the worker, 11% from the employer. This item finances the long-term pension system.
General Health Insurance (GSS): The rate is 12.5%. 5% is the worker’s share, 7.5% is the employer’s share. It ensures the financing of health services.
Short-Term Insurance Branches (KVSK): The rate is 2% and is paid entirely by the employer. It covers risks of work accidents, occupational diseases, and sickness. (Note: This rate, which used to vary according to the hazard class, is now fixed at 2%, but can be increased up to 2.25% by the President’s decision; some sources state it as 2.25%, but it is taken as 2% in standard calculation).
Unemployment Insurance: The rate is 3%. 1% is the worker’s share, 2% is the employer’s share. It is transferred to the Unemployment Fund.

2025 Incentive Regulation: 5 Points vs. 4 Points Distinction

The “5-point Treasury Discount” (reduction of the employer’s MYÖ share from 11% to 6%), which has been applied for years and provided on the condition that employers pay their SGK premiums regularly, underwent a strategic revision as of 2025. With the legal regulations made, this discount was preserved as 5 points (5%) for workplaces operating in the manufacturing sector, while it was reduced to 4 points (4%) for other sectors (service, retail, etc.). This situation has marginally increased employer costs in the service sector.

The table below details the cost structure for a workplace operating in the service sector (4 points incentive) according to 2025 minimum wage parameters:

Item (2025 – Service Sector)	Amount (TL)	Explanation
Gross Minimum Wage	26,005.50	Premium Base Earnings Floor
SGK Worker Share (14%)	3,640.77	26,005.50 x 14%
Unemployment Ins. Worker Share (1%)	260.06	26,005.50 x 1%
Income Tax Base	–	Full tax exemption applies to minimum wage
Stamp Tax	–	Exemption on minimum wage
Net Minimum Wage (Received by Worker)	22,104.67
SGK Employer Share (16.75%)	4,355.92	20.5% (Normal) – 4% (Incentive) + 2% (KVSK) = 18.75% Correction: Incentive is deducted from MYÖ. Normal Employer Share is 20.5% (11% MYÖ + 7.5% GSS + 2% KVSK). With 4 points discount, it becomes 16.5% + 0.25% var. Calculation Note: Sources cite the 5-point discounted version as 15.75% (20.75 – 5). With a 4-point discount, this rate becomes 16.75%.
Unemployment Ins. Employer Share (2%)	520.11
Total Cost to Employer	30,881.53	Gross Wage + Employer Shares

Analysis: In the 4/A system, the state subsidizes a portion of the cost to encourage “regular payment” behavior. However, for an employer with premium debt, the cost rises to the 20.5% + 2% = 22.5% level, carrying the total cost to the employer to the 32,000 TL band.

2.2. Premium Burden in 4/B (Bağ-Kur) Status and “Self-Financing”

In 4/B status, there is no “counterparty” to share the premium burden. The tradesman, company partner, or farmer pays the entire premium out of pocket. This situation creates a serious cycle of “payment difficulty” and subsequent “deprivation of health services” for 4/B members, especially during periods of economic stagnation.

Premium Rates

The total premium rate for 4/B insured persons is 34.5%:

20% Invalidity, Old Age, and Death (MYÖ).
12.5% General Health Insurance (GSS).
2% Short-Term Insurance Branches.

Incentive Mechanism

The 5-point (or varying by sector) Treasury discount is also valid for 4/B members. A Bağ-Kur member who pays their premiums regularly pays a premium at a rate of 29.5% instead of 34.5%.

2025 Lowest Bağ-Kur Premium (Discounted): 26,005.50 TL x 29.5% = 7,671.62 TL
2025 Lowest Bağ-Kur Premium (Non-Discounted/Indebted): 26,005.50 TL x 34.5% = 8,971.90 TL

Critical Difference: While the total premium deducted from a 4/A employee’s salary (GSS+MYÖ+Unemployment) is approximately 3,900 TL, a tradesman earning the same income must pay a premium of at least 7,671 TL. The tradesman must finance the difference themselves instead of an employer. Furthermore, unemployment insurance is not mandatory for 4/B members; it is voluntary. If the tradesman chooses to pay the 2% Esnaf Ahilik (Tradesmen Guild) Fund premium, this burden increases further, but a right to an allowance similar to unemployment salary arises in case of bankruptcy. However, this practice has not become very widespread in reality.

2.3. Deduction Logic and State Contribution in 4/C (Public Officials) Status

Although 4/C status underwent a major transformation with Law No. 5510, the “Deduction” (Kesenek) logic has been preserved. Here, the employer is the state, and the state’s contribution is much higher compared to a private sector employer.

Difference in Earnings Subject to Premium

While almost the entire gross earning is included in the premium base in 4/A and 4/B, a large part of the civil servant’s salary items (revolving fund, additional payments, part of special service compensation, etc.) are not included in the “Salary Subject to Pension Deduction” base in 4/C. This causes decreases of up to 40-50% between the salary received by the civil servant while working and the salary they will receive upon retirement.

Personal Deduction: 16% (There is a complex internal distribution such as 9% retirement + 5% GSS share instead of 7.5%, but the total deduction is around 16%).
State (Institution) Provision: The rate is 20%. However, in professions with actual service hike (wear and tear share) (police, military, healthcare workers), the state contribution rises to much higher rates.
GSS: The entire GSS premiums of civil servants are covered by their institutions, and there is no 30-day waiting period for activation. They and their dependents are covered by health insurance on the day they start work.

Section 3: Retirement Mechanisms and Analysis of Monthly Pension Allocation Rates (ABO)

The most vital output of the system for employees is retirement. Despite the claim of “unity of norms,” Law No. 5510 has created abyss-like differences between 4/A, 4/B, and 4/C in retirement calculations. Manipulations made especially through Monthly Pension Allocation Rates (ABO) point to serious income losses for those entering the system after 2008.

3.1. Pension Calculation Algorithm in 4/A and 4/B

The pension calculation for 4/A and 4/B statuses is based on the principle of “Actuarial Justice,” but this principle has turned into a tool of “Budget Discipline” over time. Salary calculation is done with the weighted average of three periods:

Pre-2000 Period: It is the most generous period. The indicator and coefficient system applies. ABO is at levels of 70-76%. Those with premiums in this period have higher salaries.
Period Between 2000 – 2008 (October): The CPI + Development Rate formula was introduced. ABO is at levels of 60-65%.
Post-2008 (Law No. 5510) Period: It is the lowest yielding period.
- Formula: Average Monthly Earnings x Monthly Pension Allocation Rate (ABO).
- Average Monthly Earnings: Found by bringing the premiums deposited by the person throughout their working life to the present day with the update coefficient (CPI + 30% of the Development Rate). Taking only 30% of the development rate means not fully reflecting the welfare share to the retiree.
- ABO: It is 2% for each year. For someone working for 25 years, the ABO becomes 50%. This rate is much lower than the 70%s in the old system.

Example Scenario: A 4/A employee working for minimum wage does not see an increase in pension as they increase the number of premium days; on the contrary, due to the ABO remaining low and the suppression of the update coefficient, they may be condemned to a salary that remains proportionally below the minimum wage. This gives birth to the “root salary” problem.

3.2. Hierarchical and Status-Based Calculation in 4/C

4/C (Civil Servant) retirement is indexed to “Title” and “Degree” rather than the premium paid. There is a status-based calculation here, not a mathematical one.

Civil Servant Salary Coefficient: Updated every six months and directly increases retirement pensions.
Additional Indicator (Ek Gösterge): It is the biggest determinant of retirement pension and bonus. Between a branch manager with a 2200 additional indicator and a branch manager with a 3600 additional indicator (if the regulation covers it), differences of up to 20-25% in pension and 30% in retirement bonus occur.
Base Salary: No matter how low premiums civil servant retirees have paid, a salary below a certain base salary cannot be allocated. This makes 4/C more protected for low-income groups compared to 4/A.

Critical Distinction: A 4/A engineer may receive a higher salary than a civil servant with a 3600 additional indicator upon retirement if they pay premiums from the ceiling (195,000 TL gross in today’s money) throughout their life. However, a 4/A employee with minimum wage premiums cannot even approach the salary of the lowest-ranking civil servant retiree. The system rewards the high-premium paying 4/A employee, but 4/C is clearly advantageous in average and sub-average income groups.

Section 4: Social Rights, Health, and Short-Term Risks

Differences between statuses are felt not only in retirement but also in daily life situations such as illness, birth, and work accidents. The “deprivation of rights” in the 4/B status is the weakest link of the system.

4.1. Temporary Incapacity Allowance (Medical Report Money) Asymmetry

SGK pays “Temporary Incapacity Allowance” to compensate for the income loss of the insured who cannot work due to illness. However, this right is not equal for everyone.

4/A (Workers): Receives report money in cases of illness, work accident, occupational disease, and maternity. In case of illness, payment starts from the 3rd day of the report. The allowance is half of the daily earning for inpatient treatments and two-thirds for outpatient treatments. Calculation is based on the earnings average of the last 12 months (it was previously the last 3 months, increased to 12 months to prevent abuses).
4/B (Bağ-Kur): This is the biggest area of victimization in the system. Bağ-Kur insured persons cannot receive a “single penny” of allowance from SGK when they receive a report due to general illness (flu, surgery, situations requiring home rest, etc.). The legislation foresees providing allowance to 4/B members only in cases of “Work Accident,” “Occupational Disease,” and “Maternity.” Normal illness risk is the tradesman’s own financial problem. Furthermore, even to receive a work accident allowance, the condition of having no premium debt (or having it installed) is essential.
4/C (Civil Servants): Their salaries are not cut when they receive a report. Their institutions continue to deposit their salaries fully. Therefore, they do not receive a separate allowance from SGK. This means “full income security.”

4.2. Maternity and Nursing Allowance

Nursing Allowance (Milk Money): A lump sum amount (updated according to the 2025 tariff) is paid by SGK to 4/A and 4/B insured persons (to the female insured or the male insured due to the birth given by his non-insured spouse). SGK does not make payments to 4/C insured persons; these individuals receive “Birth Aid” from their own institutions within the framework of Law No. 657 or relevant legislation. These two types of payments are often confused, but their funding sources are different.
Maternity Report Money: 4/A and 4/B women receive incapacity allowance for 8 weeks before and 8 weeks after birth. For a 4/B woman to obtain this right, having no premium debt is essential.

4.3. Activation Periods in Access to Health Services

4/A: 30 days of premium payment is required for health activation after entering employment. That is, a person starting work cannot go to the hospital immediately that day; they must wait for one month (except for Work Accidents).
4/B: To benefit from health services, there must be no premium debt exceeding 60 days. If there is a debt exceeding 60 days, the system does not give health provision (except for emergency cases and maternity). This situation leads to millions of tradesmen being deprived of health services during periods when they are indebted.
4/C: Health service becomes active without a waiting period the moment the statement of employment entry is given and duty commences. Not only themselves but also their dependent spouse and children are immediately covered.

Section 5: Exit Regime, Severance Rights, and Lump Sum Payment

Lump-sum monies obtained at the end of working life are seen as “buying a house,” “closing debt,” or “retirement capital” in Turkish society. At this point, differences between 4/A, 4/B, and 4/C directly affect the individual’s life accumulation.

5.1. 4/A: Severance Pay Assurance

Severance pay is an obligation on the employer specific only to 4/A employees. It is paid in case the worker works for at least 1 year and leaves the job for just causes (or due to reasons such as retirement, military service, marriage).

Calculation: Payment is made in the amount of the last gross wage for each year.
Ceiling: The Severance Pay Ceiling for 2025 will increase indexed to the highest civil servant salary. The severance pay of a private sector employee receiving a high salary is limited by this ceiling. Severance is not calculated for salaries above this ceiling (except for employer’s initiative).

5.2. 4/C: Retirement Bonus Privilege

There is no severance pay in 4/C; there is “Retirement Bonus” (Emekli İkramiyesi).

Difference: The way of leaving the job is very important to receive severance pay (those who resign cannot receive it). However, even if a civil servant resigns and leaves the civil service, when they complete the retirement conditions (age, days) years later, they can receive the retirement bonus for the service periods accumulated in the fund (within the framework of certain legal processes and unification provisions).
Amount: Bonus calculation is made over the coefficients and additional indicators at the date of the civil servant’s retirement. Generally, the bonus of a civil servant with 30 years of service reaches higher amounts than the severance pay of an average worker.

5.3. 4/B: “Severance-Free” Status and Lump Sum Payment

4/B members (tradesmen, merchants) do not receive any severance pay when they quit their jobs or retire. The concept of “seniority” (Kıdem) is invalid because it is their own workplace.

Lump Sum Payment: If a 4/A, 4/B, or 4/C member has filled the retirement age (women 58, men 60 or graduated ages) but has not been able to fill the premium day number (e.g., 9000 days or 7200 days) and has no possibility of retiring, they can ask for the Invalidity, Old Age, and Death premiums (excluding GSS) they paid until that day back from SGK in a lump sum. This is called “Lump Sum Payment” (Toptan Ödeme). However, this amount may have melted against inflation over the years, and update coefficients may not fully cover the real loss. This is not a “retirement bonus,” but merely a “premium refund.”

Section 6: Conclusion and Future Projection

The “Single Roof” model aimed with Law No. 5510 has been successful in an administrative sense, bringing a giant institution like SGK to life. However, as detailed in this report, “Unity of Norms” has not been achieved among 4/A, 4/B, and 4/C statuses.

Key Takeaways and 2025 Outlook:

Risk Hierarchy: The system distributes risks in the form of 4/B > 4/A > 4/C. The greatest risk is borne by 4/B members who cannot receive allowance in illness, have no unemployment salary, and have no right to severance pay. The safest harbor is 4/C with job security and salary guarantee.
Cost Pressure: The 2025 minimum wage increase and the reduction of incentives to 4 points have increased the burden on 4/A employers, triggering the risk of unregistered employment. For 4/B members, monthly premiums rising to the 8,000-9,000 TL band will strain payment discipline.
Gap in Retirement: While the post-2008 system reducing ABO rates confines 4/A and 4/B retirees to “minimum pension” or “root salary” discussions, 4/C status continues to maintain its relative welfare with the additional indicator and coefficient system.

In conclusion, the social security system in Turkey is not an “egalitarian” regime but a “status-based categorical” one. It is essential for individuals entering working life or entrepreneurs on the path to incorporation to make decisions by considering not only their instantaneous earnings but also the 20-30 year projections (health, severance, retirement pension) brought by these statuses. Particularly for professionals who will switch to 4/B status, protecting themselves with complementary products such as the “Individual Pension System (BES)” and “Private Health Insurance” to close the gap in the system carries vital importance for filling the voids created by Law No. 5510.

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