Sick leave and accidental death and dismemberment insurance, which we will call by its French name “Prévoyance” throughout this article, can be defined as insurance that supplements the income of the employee who can no longer work in the event of illness or accident, for example, or which pays a sum of money to the family in the event of the employee’s death.
Complementary health insurance company (commonly called “Mutuelle”) pays the employee reimbursements of medical expenses in addition to the basic guarantees of Social Security.
We will first explain the main differences between a “prévoyance” and a “mutuelle” in order to avoid the reader any confusion between these two very different contracts.
We will then explain the main operating rules of each of these contracts.
I – The difference between “mutuelle” insurance and “prévoyance” insurance
We often confuse the “mutuelle” and the “prévoyance” because they both have points in common. These are two social protection mechanisms which operate in addition to Social Security reimbursements. In addition, they can both be taken out in a collective (company) or individual framework.
Usefulness of the “prévoyance”
It pays an additional income to the insured in the event of difficulties. It also provides financial support to his family in the event of his death. It covers 3 main types of risk:
- temporary incapacity,
When an employee can no longer work, he receives state aid. For example, in the event of a sick leave, Social Security pays him a daily allowance, and the employer must sometimes maintain his salary. But these aids are often insufficient, and they are limited in time. “Prévoyance” funds cover day-to-day costs and expenses.
Usefulness of the “mutuelle”
It reimburses current health expenses (medical consultations, purchase of medication, etc.).
When an employee sees a doctor, Social Security reimburses part of the consultation in charge. The remaining part, called “moderator ticket”, is paid by the insured. Thus, the “mutuelle” health insurance completes the reimbursement of the health insurance and covers the moderating ticket.
The “mutuelle” insurance company can also reimburse care that Social Security does not reimburse, for example osteopathy sessions, excess fees, etc.
II – “Prévoyance” insurance
The obligation (or not) to subscribe to a collective “prévoyance” contract
The law does not require companies to take out “prévoyance”. On the other hand, a large number of collective agreements or a branch agreement provide for compulsory insurance.
However, since the collective agreement for executives of 1947, all companies must take out death cover for employees with executive status.
Concerning non-executives, as written above, a collective agreement or a branch agreement may impose “prévoyance” insurance for all employees of a sector of activity or a professional branch.
Apart from these situations, the “prévoyance” is optional and the employer can establish it by unilateral decision or by referendum.
The different types of contracts
A company takes out collective “prévoyance” insurance to protect its employees. The contract is signed between the “prévoyance” organization and the company, which then enrolls its workforce.
Even apart from cases where “prévoyance” insurance is compulsory (i.e. when a collective agreement imposes it or when employees with executive status are employed – for the death part), an employer can establish “prévoyance”.
The company covers the insurance fund up to a minimum of 50% (employer’s share). The employer’s share is deductible from the tax result. It is also exempt from social charges.
- Individual contract
All people who have a professional activity can subscribe to an individual “prévoyance” insurance but it is not compulsory.
Self-employed workers (liberals, traders, craftsmen) have a particular interest in taking out an individual contract, because Social Security benefits are low for them in the event of incapacity, invalidity or death. Some employees already benefiting from a collective “prévoyance” insurance contract join when they want to benefit from more complete protection.
In the case of an individual contract, the insured assumes sole responsibility for the payment of his “prévoyance” cover. Contributions are deductible from the taxable income of self-employed workers when the contract is taken out within a certain framework (known as the Madelin law).
The main risks covered by “prévoyance” insurance contracts
- Incapacity insurance
The incapacity guarantee compensates the insured placed on sick leave, prescribed by a doctor following an accident or illness. The person on sick leave suffers a significant loss of income.
The employer can (or must), in certain cases, maintain his salary for a limited period. The payment of this supplement is financed by the “prévoyance” organization.
If the sick leave is prolonged, an incapacity guarantee completes the basic compensation by the payment of a lump sum or an incapacity pension.
The amount of the incapacity guarantee is calculated on the basis of a percentage of the reference salary. The reference salary corresponds to the gross earnings of the last 12 months.
The organization pays an annuity or capital to the insured who finds himself in a situation of disability due to an illness or an accident of non-occupational origin. There are 3 categories of disability:
- * Partial disability: the degree of disability is greater than 33%, the person can still work part-time;
- * Total disability: the degree of disability is greater than 66%, the person can no longer work;
- * Total disability and dependence: the disability rate is greater than 66%, the person can no longer work and needs assistance to carry out daily activities.
Social Security assesses the amount of the disability pension according to these categories. The disability insurance supplements this pension by paying a sum of money (annuity or capital). The amount depends on the category of disability. It is calculated on a percentage of the reference salary.
In the event of death, insurance pays capital or an annuity to the beneficiaries designated in the contract (relatives, family, children, spouse).
Most accidental death and dismemberment insurance contracts include options such as:
- * The education pension: it covers part of the school fees of the children of the deceased insured person;
- * The surviving spouse’s pension: it compensates the spouse of the deceased insured;
- * Funeral insurance: it finances funeral expenses.
III – Complementary health insurance (mutuelle)
1. The obligation to join a “mutuelle” health insurance
- Obligation concerning the company
Since January 1st 2016, private sector employers, companies or associations (excluding individual employers), must offer supplementary collective health cover to all of their employees who do not already have it. This obligation applies regardless of the seniority of the employee in the company.
In addition, the coverage of the dependents (children or spouse) of the employee is possible but not compulsory. It must have been decided by the employer or by a collective agreement.
- Obligation concerning the employees
Employees may refuse to join their employer’s complementary health insurance (and eventually “prévoyance”) system only in the following cases:
- * Already covered, as a spouse or PACS, by a “mutuelle” insurance company;
- * Already covered by an individual “mutuelle” (the exemption from membership only applies until the expiry of the individual contract);
- * Already employed in the company at the time of the implementation of the device: the employee can choose not to join if the device (“prévoyance” or complementary health insurance) was set up by unilateral decision of the employer with financial participation of the employee;
- * Benefiting from “Complémentaire Santé Solidaire” (CSS);
- * Part-time employee (in certain cases only), for more information click here;
- * Employee under a fixed-term contract or an assignment contract (in certain cases only), for more information click here;
2. The minimum guarantees that must be covered by the insurance company
Complementary health insurance must cover at least the following guarantees (basket of care):
- * Full co-payment for consultations, acts and services reimbursable by health insurance, subject to certain exceptions;
- * Total daily hospital charge in the event of hospitalization;
- * Dental costs up to 125% of the conventional rate: rate on the basis of which the calculation is made for the reimbursement of a medical act by the Health Insurance;
- * Optical costs on a flat-rate basis per period of 2 years (annually for children or in the event of changes in sight) with a minimum coverage set at €100 for a simple correction, €150 (or even €200) for a complex correction.
In addition, the complementary health insurance can offer additional services such as:
- * Third-party payment (allows the employee not to advance medical expenses);
- * Assistance service (domestic help, childcare, etc.)
- * Prevention and support (screening support, for example).
3. Establishment of mutual health insurance in the company
The company must first refer to the collective agreement or the branch agreement on which it depends because, in general, a complementary health plan is imposed on the company.
In the absence of a branch agreement, the agreement can be reached via a collective deal negotiated between the employer and the staff representatives.
Do not hesitate to contact us for any clarification on these subjects!
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