Generalisation of complementary healthcare schemes – limited success

A year after the entry into force of this measure taken from the 2013 law, employees do not benefit from better cover. Their copayments have actually gone up. Testimony from Eric Maumy, CEO of Verlingue in a study published in Le Figaro.

Dossier | Le Figaro | 10 January 2017


Up till now this reform has mostly resulted in higher copayments.


The road to hell – as we know – is paved with good intentions! By generalising 2nd tier company healthcare plans early 2016, the government wanted to provide employees with better cover. One year later, the results are meagre: the market has not been shaken up, companies have had to pay new expenses and employees are not better protected. On the contrary, a lot of people have had to take out 3rd tier cover at their own expense in order to keep the level of reimbursement they had previously.


The law of June 2013, enacting an agreement between the employers and the trade unions on job security, requires all companies to offer a group complementary healthcare scheme and take on at least 50% of the cost. A common practice in large groups and larger mid-market companies which the government wanted to extend to approximately 400,000 SMEs, or 10 million people including spouses and beneficiaries.


Laurent Ouazana, from IPS (the institute for social insurance protection) estimates that “close on 25 % of the target companies have still not generalised i.e. offered complementary health plans to everyone” CPME, the confederation of French SMEs, confirms that “20% of companies have not made the move”. Why? The cost – between 15 and 30 Euros a month per employee – and much more legal red tape. For Jocelyne Cabanal, responsible for social insurance protection at the CFDT trade union, however, it is too early to gauge the results of this measure which has brought “real progress in social insurance for employees, given them access to reimbursement cover and created equality between employees of small and large businesses“.


Nevertheless, the employees in companies that have made the move, are far from winning out. In fact, nearly 95% already had a complementary health scheme before the Act of 2013: 56% had an individual contract – essentially from mutual societies – and 44% were in group schemes. But now, the cover for a company scheme has been set by the negotiating parties at a minimum level – the so-called basket of covers. With the result that employees who have had to transfer over to a group scheme have sometimes found themselves with not such good cover. Olivier Perrichi, general manager of the brokers Henner confirms that “the entry level of cover is very low and employees are often disappointed”. The employers’ federation Medef, denies all responsibility saying “this reform in favour of employees has had a negative impact due to the complexity of the law and the decrees that govern its implementation”.



Tax on the employer contribution


Not to mention that the contributions paid by the employer are now considered as a benefit in kind and taxed as such since 1 January 2013. This has increased a taxpayer’s tax bill by 90 to 150 Euros. Brigitte Dubois, an accountant from the Exco network, has seen that “employees are obliged to pay taxes on income they do not receive. This is felt as an injustice”. The CPME, federation of SMEs, regrets that “the government has helped itself at the expense of employees”.


More than 90% of such schemes are labelled “responsible” and must meet a number of criteria in exchange for advantageous taxation. However, in April 2015, the government altered this and introduced reimbursement ceilings in order to limit practitioner fee overruns. As a result, employees have seen their copayments soar upwards. Eric Maumy, head of the insurance broking firm Verlingue, points out that “copayments rose 10% in 2016 due to a 37% increase in specialists’ fees, 27% in minor surgery and 100 % in hospitalisation charges”. Vincent Harel, deputy healthcare general manager at Mercer confirms that “we have seen group covers fall to a common denominator level”.



The spectacular growth of 3rd tier contacts


To strengthen their protection, an insured can take out a 3rd tier optional policy (a so-called “surcomplémentaire”) in addition to the obligatory group scheme put in place by the company. The interest, for the employee who pays the contributions, is to consolidate cover for their medical expenses through a third level of cover, the first tier being the basic national health scheme and the second being the company complementary scheme. The employer, in leading the negotiations, can thus offer its employees significant complementary items of cover without increasing its budget. Eric Maumy, CEO of the insurance broking firm Verlingue, indicates that “close to 60% of new policies in 2016 have been put in place on this model”.



Marie-Cécile Renault

Le Figaro