Many employees and workers in France have international private medical insurance (IPMI) over and above their state coverage used through the French National Health Insurance (NHI) System.
The French Government promulgated the Employment Security Law (Loi No 2013-504 du 14 juin 2013 relative a la securitisation de l'emploi) (ESL), which requires all French based employers to provide mandatory supplementary health insurance coverage no later than 1 January 2016.
The majority of workers and employees have coverage under the NHI System, which is extensive and, in most cases, offering reimbursement of up to 70% of outpatient expenditure and 80% of inpatient expenditure.
Therefore, there was a missing gap where the NHI System did not cover the full medical benefits for French workers and employees, where they were required to make up the shortfall. The new mandatory supplementary health insurance coverage may have resolved this shortfall for the French workforce.
What are the coverage requirements and how do IPMI providers comply?
In our view, the majority of IPMI Providers will meet the requirements in terms of the rich benefits and coverage that they offer but may need to review their existing books in France and tailor their products to the new requirements.
Decree No 2014-1025 of 10 September 2014 promulgated the minimum level of cover under the new mandatory supplementary health insurance, as follows:
- Outpatient - visits must meet the minimum social security fee;
- Inpatient - visits must meet the minimum daily hospital fee;
- Dental fees; and
- Optical fees.
How do plans and benefits comply?
- The minimum level of cover MUST be provided under the plans (see above). This will include optical and dental, which are usually add-ons to IPMI policies;
- The insurance premium cost MUST be split between the employer and employee and the employer must pay at least 50% of the costs but can pay more;
- The enrolment MUST be mandatory subject to exemptions. There are possible exemptions from the requirement of mandatory enrolment by the employees but strict conditions must be met to meet the exemptions;
- Enrolment must be automatic and mandatory for all employees/workers. If offered on an optional basis it will be taxable benefit;
- The taxable benefit status can, under certain circumstances, be tax compliant and avoid taxation if the statutory provisions meet the conditions; and
- Dependants may be enrolled under mandatory or optional provisions, which will have tax implications.
What does this mean for IPMI providers in France?
Many IPMI Providers will be wondering whether their products, benefits and coverage will be suitable for their French based client members in lieu of a local based scheme.
We would suggest that an audit is carried out to review their existing client members that the IPMI Providers insure in France and check with their client members whether the products are in fact suitable for the ESL coverage. For example, if the IPMI Provider does not offer dental or optical coverage under it benefits, then the plan will not be compliant unless the employee/worker opts out under the employee exemption. IPMI Providers could add on these benefits in discussion with the group client members and underwrite them. At least 50% of this cost needs to be picked up by the employer.
Local coverage may need consideration in terms of the IPMI Provider’s product offerings in the market. Additionally, the IPMI Provider may need to adjust their benefit offerings to cater for the new requirements. IPMI Providers can also look to provide top-up coverage where needed.
It is important for IPMI Providers to note the Employee’s possible exemptions from the requirement of mandatory enrolment as it may be possible to offer the IPMI product in lieu of the mandatory supplementary coverage where the employee/worker opts out. This will be relevant to the expatriate market in our view i.e. –“Employees/Workers who already have private medical insurance coverage and do not take the benefit of the NHI system”. In order to benefit from this exemption, the employee/worker must submit a formal exemption request to their employer.
The ESL and its supplementary legal provisions are very complex and still need further analysis during these early stages.