If you are going to move to the UK from Germany as exercising Treaty Rights as Self-sufficient, Then, yes you will need to prove you have the means to support yourselves ( after the three months residence grace period) and have Comprehensive sickness insurance (not the NHS) for the self-sufficient EEA national and all family members ( even if the family members work and pay National Insurance and are entitled to use the NHS).
The latest EEA2 July 2011 forms show that European Health Insurance Cards ( EHIC) are accepted as proof of CSI.
Furthermore, Baumbast did not use EHIC but he had German health insurance as he worked in Germany. That insurance continued to cover him even though his residence was the UK.
I would advise you get EHIC cards from the German health authorities before moving to the UK and also check the rules of your German health insurance cover to see if it still covers you - and what it covers - when abroad in the UK and for how long.
I agree, it is better if you apply for an EEA family Permit (FP). This puts a sticker in your passport and shows you have the right of entry into the UK and the right to work etc.
Employers in the UK need to check you have the right to work here and retain proof of the evidence that they checked, so it helps a lot if you can show them your passport with the FP in it, so they can photocopy that. Otherwise, you might find employers scared to hire you in case they get fined for hiring an illegal worker. Also, helps if you leave and try to re-enter the UK - you can use the EU channel aat immigration then.
From memory, so check it yourself, the FP will expire after six months from date of issue, but the FP is only confirmation of your rights - it does not give you those rights and so it expiring does not take those rights away.
But it always helps if you can easily prove the rights that you have.
It is free to apply for FP.
Info about Fp can be found here:
http://www.ukba.homeoffice.gov.uk/eucit ... ly-permit/
It is a good idea to apply for a Residence card (EEA2 form for non-EEA) when you get to the UK, so that can replace the FP as proof of you rights.
From day one in the UK : Keep all documents in folders which prove you and your spouse's residence and self-sufficiency including proof of CSI, whether that is your EHIC cards or other insurance.
Cos five years down the line you might want to apply for Permanent Residence and when you do that, you will find UK Border Agency (UKBA) ask for five continuous years of proof of exercising treaty rights in the UK.
Who normally keeps five years of old bills, payslips, tax records, rent agreements, bank statements and expired certificates etc? I think most people don't, so that makes UKBA's job easy : you or EEA would get a refusal letter stating you did not supply sufficient evidence of exercising of treaty rights for five years.
Forewarned is forearmed.
UKBA is not there to help you. It's job is to keep out as many foreigners as possible ( unless wealthy), cos that's the Govt's policy.