An Act of June 14, 2013 (the "Act") provides for (i) the extension of company health insurance plans to all employees and (ii) improved portability of health and pension schemes for the benefit of past employees.
Extension of health insurance plans. By January 1, 2016, all employees in the private sector must be provided with a minimum level of coverage by a company health insurance plan. In particular, they must be covered for illness, pregnancy and accidents. This coverage will complement the state benefits provided by the Social Security regime ("régime de base").
As there is a general preference for industry-wide agreements, there is an obligation for industries to negotiate the level of health plan coverage, and negotiations should have commenced before 1 June 2013 at the industry level. It must be at least as favorable as the minimum coverage required by law. Industry-wide negotiations on healthcare plans must cover:
- the contents and levels of coverage;
- the level of employer and employee contributions; and
- the methods of choice of the insurer, including a thorough cost/benefit analysis of the methods used by companies to retain an insurer, bearing in mind the requirement to provide effective coverage for all employees of the industry and universal health access.
In the absence of an applicable industry-wide agreement, companies will have to unilaterally provide their employees with a health insurance plan which should meet the legal minimum coverage requirements. These must be negotiated between July 1, 2014 and January 1, 2016.
The new portability regime for health and ancillary benefit schemes. Since 2008, pursuant to an inter-professional national agreement, every employee has been entitled to continue to benefit from the company's insurance policies for death, maternity, working capacity and disability during a period of unemployment after the termination of his or her employment (except in the case of termination for gross misconduct ("faute grave")).
Pursuant to this national agreement, in order to benefit from the portability coverage "with the same level of coverage as applicable in the company", the former employee must comply with certain conditions:
- he/she must have the right to benefit from the collective health coverage ("avoir ouvert des droits") with his/her last employer;
- he/she must have had his/her employment agreement terminated in a manner that entitles him/her to receive unemployment benefits (except in case of termination for gross misconduct); and
- he/she must provide the insurance company (and no longer the previous employer) with a justification of receipt of unemployment benefits.
In addition to the national agreement provisions, the Act provides that the employee and his/her dependants ("ayant-droits") will benefit from the same level of coverage that the employee was receiving at the time of the employee's termination of employment. The level of coverage must be maintained for the duration of the unemployment period during which the employee is entitled to compensation, up to a limit of the duration of the last employment agreement with his/her former employer. The maximum coverage period has been extended from nine months to 12 months.
The Act also provides that the benefit of the maintained health and ancillary benefit coverage is "free of charge". Only the employer and the working employees are to finance the portability regime. This is known as "mutual fund financing" and will result in an increase in social security contributions for both employers and working employees.
The portability regime will come into force as of June 1, 2014 for health coverage and by June 1, 2015 for the other ancillary welfare benefits (pregnancy, disability, etc.) if they are to be provided in a separate package. In practice, company plans tend to cover all of these benefits, which means that, in most cases, the necessary changes should be implemented before June 1, 2014.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.