Following the signature of a national agreement requiring every company to offer health insurance to its employees, the Competition Authority has issued an opinion making recommendations to ensure effective competition between players in the complementary and collective health insurance sectors.
The agreement, which was signed on January 11 2013, provided that sector negotiations had to be opened before April 1 2013 in order to enable employees who do not enjoy mandatory collective health insurance for the complementary reimbursement of health expenses to obtain such protection. The agreement allows companies to choose one or several complementary health insurers.
A draft bill under discussion in Parliament is intended to limit companies' freedom to choose their own health insurers if a sectoral agreement includes a designation clause to one or several named health insurers.
The Competition Authority observed that designation clauses are not prohibited by French and EU competition law per se – notably because they result in the mutualisation of risks. However, such clauses must be carefully reviewed to ensure that they do not restrict competition on the complementary health insurance market.
Designation clauses to one or several health insurance companies led to these companies having a predominant position on the market compared to their competitors. This is even more so because, according to the draft bill, designation clauses may be re-examined only every five years. The Competition Authority believes that this duration is disproportionate compared to the usual one-year duration of insurance contracts, with tacit renewal.
In addition, designation clauses are often accompanied by migration clauses which require companies that already have collective complementary health insurance contracts to subscribe to the designated health insurance. As a result, employees who may already be sufficiently protected must contribute to a new contract which they do not necessarily need.
Designated operators enjoy competitive advantages beyond the collective health insurance contract for which they are designated, since they can leverage on this contract to propose other insurance products to all employees in the relevant sector.
In light of this, the Competition Authority drew the attention of the legislature and private operators to the need to favour a regime where companies choose their own complementary health insurer(s). It also recommended allowing the mutualisation of risks through recommendation or designation clauses, but considered that such clauses must include at least two health insurance companies which should be selected through an effective competitive process. This process should be organised and controlled by an ad hoc body of independent individuals.
Finally, the Competition Authority suggested limiting the duration of designation clauses before re-examination to three years, instead of five years as currently proposed.
Following publication of the French Competition Authority's opinion, the government removed the provisions on the designation clause from the draft bill.
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