Mandatory Employer-Paid Medical Insurance For All Staff In France

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Our expert provides details of a new law effective 1 January 2016 that will require all employers to provide medical insurance to staff

Currently in France, basic social security cover does not refund medical expenses in full. In an effort to provide improved health care to all salaried employees, the government has ruled that all companies employing staff in the country must provide additional medical insurance.

Where the employer already provides a medical plan, they will need to make sure it is compliant with the new requirements and take all actions to upgrade their existing plan before 1 January 2016 if necessary.

If the employer doesn’t have a medical plan for staff, it must be set up as soon as possible and become effective on 1 January 2016 at the latest.

Key items to be checked in order to comply with the new law:

• Minimum coverage to be offered by the plan
• Insurance premium cost split
• Mandatory enrolment
• Tax-compliance of the plan – avoiding the taxable benefit status
• Possible exemptions from the employees’ mandatory enrolment
• Enrolment of employees’ dependents: optional or mandatory

Minimum plan coverage

The plan must be compliant with the “contrat responsable” rules. It must cover at least the following medical expenses:

• The minimum social security fee (“ticket modérateur”) for medical visits
• The minimum daily hospital fee (“forfait journalier”)
• Dental fees
• Optical fees

Insurance premium cost split

Insurance premiums must be paid at least 50% by the employer. The employer can choose to pay a higher share of the cost.

Mandatory enrolment

Enrolment must be automatic and mandatory for all employees, otherwise it will be regarded as an optional and therefore taxable, benefit.

Plan tax compliance – avoiding the taxable benefit status

In order to be processed as a non-taxable benefit, some formalities when setting up or upgrading your plan must be completed. The type of formalities depends on whether or not your company is affiliated to a Collective Bargaining Agreement (CBA) or Branch which has already defined a structure for the medical plan:

1. Plan set up as part of a Branch or CBA: strict implementation of the CBA criteria

Some branch agreements and collective bargaining agreements have already defined a mandatory medical plan structure, or will do so before 1 January 2016. If you depend on a Branch agreement or a CBA which has negotiated a specific plan structure, you only need to implement or upgrade your plan according to the criteria described in the agreement without further formalities.

2. Plan set up outside a Branch or CBA: “Décision Unilatérale” system

Where you don’t depend on any of these agreements, or you judge the structure defined in the agreement insufficient for your staff (for example: poor level of coverage compared to what you already offer or what you want to offer to your staff), you will have to set up your plan or upgrade your plan’s conditions by drafting and signing a document called “unilateral decision” in order to establish the plan as mandatory and non-taxable. This system for operating outside of the CBA is called “Décision Unilatérale” in French. The existence and quality of this document is crucial for your plan to qualify as a non-taxable benefit.

The décision unilatérale must be signed by the employer and must be sent or given to each individual employee against signature. Employees can sign all on the same list called “liste d’émargement” or on an individual certificate of information. The décision unilatérale and the list of employees’ signatures or individual certificates will be requested by the social security inspector in case of a social security audit (“contrôle Urssaf”) in order to assess the compliance of the plan.