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Business obligations for death insurance and complementary health insurance

Business obligations for death insurance and complementary health insurance

Employers are required to put in place a group death and disability benefit plan for executives (Prévoyance). In other situations, the creation of a supplementary company pension plan is optional, unless it is imposed by a branch agreement or a collective agreement.

However, since January 1st 2016, all employees must be covered by a complementary health plan.

I – Mandatory insurance scheme (Prévoyance) for executives

1. The context of the provident agreement and the contribution rate

The provisions of the law:

Article 7 of the National Managers’ Convention (March 14th 1947) requires employers to protect their managerial (or equivalent) employees by affiliating them to a collective (prévoyance) scheme.

At a minimum, the contracts written must include a guarantee against the risk of death. Thanks to this guarantee, the spouse or the children, receive a capital or an annuity, to compensate for the loss of the deceased employee’s income.

In order to finance the executive pension scheme, the employer must pay a contribution equal to at least 1.50% of the salary bracket below the ceiling set for Social Security contributions (this is the A tranche). As a priority, the employer’s contribution must be allocated to the death guarantee.

If the employer does not respect this condition, in the event of the death of a manager, he must pay his beneficiaries a capital of an amount corresponding to 3 times the annual ceiling of social security (€ 119,196 in 2018, € 117,684 in 2017).

2. Content of the contract

The death guarantee subscribed under a “prévoyance” contract must provide for at least a lump sum payment or an annuity for the beneficiaries of the deceased or another beneficiary designated by the employee. 

However, pension contracts may contain additional guarantees, such as:

  • A support for funeral expenses,
  • Integrate additional benefit guarantees: disability, dependency, retirement …

Only two exclusions are allowed by the executive collective agreement:

  • Suicide the first year,
  • Deaths resulting from a fact of war.

3. Revision of the executive “prévoyance”  scheme

The national interprofessional agreement (ANI) of November 17, 2017 revises the national collective retirement and provident agreement of March 14, 1947. It establishes the single “Agirc-Arrco” supplementary pension plan for January 1st  2019.

The social partners are working on redefining the concept of the term “manager” as well as on the specific system of the 1.50% employer for the “prévoyance” scheme.

II – Complementary health plan

1. The obligations of the company

The employer must make available to all employees who do not yet have additional cover, regardless of their seniority in the company, an additional reimbursement system for health expenses. The company freely chooses the insurer from which it negotiates the insurance contract unless an organization has been designated by a branch agreement.

Compulsory collective coverage must meet the following conditions:

  • The financial contribution of the employer must be at least equal to 50% of the contribution,
  • The contract must respect a base of minimum guarantees defined by the law (minimum basket of care);
  • The contract is mandatory for employees, except in certain cases where the employee can refuse the mutual.

2. Employees concerned

The employer must provide a mutual insurance benefit to all employees, including apprentices. However, he may issue a waiver of membership of the corporate mutual to certain employees, including:

  • In fixed-term contract (CDD) of less than 3 months,
  • In mission contract of less than 3 months (temporary),
  • Part-time (up to 15 hours a week).

Other employees may be exempted, at their request, from the obligation to join:

  • Employees who receive individual coverage when the mandatory group scheme is introduced or when they are hired if it is later. The exemption applies until the expiry of the individual contract,
  • Employees who are beneficiaries of CMUC or ACS. The exemption applies until the date on which the employee ceases to benefit from the CMUC or the ACS,
  • Employees who are beneficiaries of benefits provided under another employment under one of these schemes: Compulsory collective health supplement, local health insurance scheme of Alsace-Moselle, supplementary health insurance plan for the electricity and gas industries (CAMIEG), mutual of the agents of the State and the local authorities, in particular.

3. Calculation of the employer’s contribution

The amount of the payments is calculated each month according to a reference amount to which a coefficient is applied.

This reference amount corresponds to the employer’s monthly contribution to the financing of the group coverage of the category to which the employee belongs.

The coefficient applied to the reference amount is:

  • 105% for employees on permanent contracts,
  • 125% for employees on fixed-term contracts.

For example: If an employer pays a lump-sum contribution of € 50 for each of its employees in a certain category, for a permanent employee in this category who works 120 hours a month, the reference amount is calculated as follows: 50 x (120 / 151.67) = 39.56, to which the coefficient of 105% is applied. The monthly amount to be paid for this employee is € 39.56 x 105% = € 41.54.

4. Care covered by the contract to a minimum

The employer’s “health care” cover must provide floors and ceilings for reimbursement for certain expenses (optical) and exclude the assumption of certain expenses.

The minimum care basket must offer the following guarantees:

  • Totality of the part not taken into charge by the social security on the consultations, acts and benefits reimbursable by the health insurance,
  • Total daily hospital charges, for example: € 20 per day in a hospital or clinic,
  • The costs of dental care (prostheses and orthodontics) up to 125% of the conventional rate,
  • Lump sum for optical costs per period of 2 years (annually for children or in case of change of vision) with a minimum of € 100 for simple eyeglasses and frames / € 150 for complex eyeglasses and frames.

The law has provided a lot of other details regarding the “prévoyance” regime in companies that we cannot develop here. In addition, branch agreements may require different coverage.

So do not hesitate to contact us for any clarification on this subject.

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