Legal Obligations for Health Insurance and Employee Benefits in France

If you are self-employed or run your own business and are looking to take on staff, what are your legal obligations regarding providing a healthcare scheme to your employees? In France, employers have a legal obligation to provide a company healthcare insurance whether it’s for a small business with 1 or more employees, right up to a large multinational company with a workforce of thousands.

It is also important to know what your rights are if you are employed on a permanent contract (CDI) in France.

These rules apply whether you are a company based in France, or outside of France and have a base of employees in France (even 1 employee).

How does the French healthcare system in France work?

Access to healthcare in France is not free (exceptions apply). Social security will refund a percentage of the cost with the average refund being 70% of the cost. Refunds from social security for treatments and prescriptions will vary depending on the type of treatment. For example, a visit to a GP will be refunded at 70% of the 25€* cost if the GP is registered as your ‘médecin traitant’, 30 % if not. (*25€ is the usual cost of a GP visit but can be higher). Social Security set a fee for each procedure and will refund a set percentage of this which is called the base de remboursement.

A Mutuelle top up insurance is intended to pay the outstanding amount after the social security reimbursement. There are many different levels of mutuelle ranging from just hospital treatment up to covering almost all costs. The most popular levels of mutuelle are 100% and 125%. This is the percentage of the base de remboursement, which the mutuelle top up policy will pay up to, rather than the actual cost.

A mutuelle policy can also provide cover to contribute or pay the cost of a private room while in hospital, complementary treatments, and even enhance your cover for private clinics and specialists. Additional services are available for home help, pet care and study support and receiving home help care.

What are the obligations of an employer?

All companies in France must be affiliated to a Convention Collective Nationale (CCN). A CCN sets out the minimum levels of cover that must be provided for their workforce. The Décision Unilatérale de l’Entreprise (DUE) is the document where the company itself will set out how it is going to apply the conditions to their workforce. An employer is legally obliged to provide a company mutuelle top up as soon as there is at least 1 employee. If a company has employees that are cadre (senior job roles) they must put in place an Employee Benefits Scheme (prévoyance) policy too, in addition to the Mutuelle. The company may set different conditions for cadre and non-cadre which will require separate associated DUE’s for cadres and non-cadres.

Company Mutuelle Scheme

There are multiple levels available for the Company Mutuelle Scheme, from the minimum legally required, to higher more comprehensive cover. The minimum level an employer must offer their workforce will depend on the CCN. The minimum contribution to the cost is 50% and the employee will pay the other 50%, but an employer can choose to contribute a higher percentage. To summarise, the breakdown of who pays what percentage of the cost depends on what is set in a CCN, the demographic of the workforce, and the choice of level of insurance. Cover can also be for the employee only, the employee and their children or the employee, partner and children together.

An employer is also obliged to offer optional enhanced cover (Option facultative) to the policy on top of the base guarantees (Socle). An employee can choose if they wish to add any of the options. The extra cost of the option, if taken, is at the expense of the employee.

Regarding the process, it is a simple process. There is no need for employees to complete a health questionnaire, and pre-existing conditions are not considered when setting the cost of the contract and will be covered.

Employee Benefits Scheme – Prévoyance

The Employee Benefits Scheme will cover death in service, short term illness and accident, longer term illness/disability/invalidity and a widow and children’s pension.

An employer has 2 obligations for offering an Employee Benefits Scheme (Prévoyance). Firstly, for all Cadre employees, an employer’s minimum obligation is to contribute 1.5% of the employee’s gross salary. Secondly, an employer must comply with the CCN which may require higher contributions and might require an Employee Benefits Scheme for non-Cadre staff.

Pension Plan – Retraite

In addition to the Company Mutuelle Scheme and the Employee Benefits Scheme, an employer can also offer employees a pension plan. Contrary to the mutuelle and employee benefits schemes, an employer is not obliged to offer a pension plan. It will however give employees an additional pension income on top of their state pension. The cost is a percentage of the employee’s gross salary.

In France, it’s very important to make sure employees feel rewarded for their work particularly considering the scale of social security contributions an employee will pay. A Company Mutuelle Scheme, Employee Benefits Scheme and a Pension Plan are good ways to attract and motivate a workforce!