Life and Health insurance – 3/3 – How to set it up

life and health insurance

On the 1st of January 2016 it became mandatory for every company under French social law to offer life and health insurance (called “prévoyance” and “mutuelle” in French) to its employees.

What does this means?

What will be the cost for the company and for the employees? And for what benefits?

How does the company setup these contracts?

The French labour law can appear very complex to a foreigner. Our job is to simplify it to the core issue you must deal with.

Therefore, we will see, as simply as possible, what are your legal requirements, how much will it cost you and how to best set it up.

The law

See our previous post.

Cost and benefits

See our previous post.

How to set it up

health insurance

To setup a life and health insurance contract, you need to contact an insurance company or an insurance broker.

Do not hesitate to request 2 to 3 quotes.

Once you have chosen the contract(s) you wish to provide to your employees you will need to return the sign contract to the insurance company along with a registration form. Depending on the contract and the insurance company other documents may be requested.

Then you will have to have all of your employees fill in and sign an individual registration form that you will have to send to the insurance company. This formality can sometime be done online.

You will have to draft a unilateral declaration (called “Déclaration unilatéral de l’employeur” in French) and have it sign by the company and all the employees. This document is a summary of the cost and benefits of the insurance contracts. Unfortunately this document must be in written in French.

The employee will not receive confirmation of his registration to the life insurance. However, he will receive a health insurance card confirming his registration to the health insurance.

The contributions of both contracts will be added to the payroll. The contributions will have to be paid quarterly to the insurance company. Your payroll provide will provide the insurance company with a yearend declaration.

The insurance rate are usually fix for a year. And they usually increase on January of every year. You will receive a notification of the new rate from the insurance company. Make sure it is passed along to you payroll provider for implementation on the payroll.


French Payroll Expert advice


Recently retirement fund started to provide life and health insurance contract. Since your company must be registered to a retirement fund, we recommend that you contact your retirement fund for a quote. If the quote agrees with you it may be a non-negligible benefit to limit the number of contacts by having the same company managing your retirement and you insurance.

If you do not know who to contact to have a quote, do not hesitate to contact us. We will provide you with brokers and insurance company we recommend and who can provide costs in English.

 

You cannot escape it. You must register to a life and health insurance for your employees. To make it simple do not forget to:

  • Be in compliance with the law and your collective bargaining agreement.
  • Evaluate the cost and the benefits with forgetting the HR benefits.
  • Contact us or your payroll provider. It is our job to assist you so that you can focus on your business.

 

French Payroll Expert

Life and Health insurance – 2/3 – Cost & benefits

life and health insurance

On the 1st of January 2016 it became mandatory for every company under French social law to offer life and health insurance (called “prévoyance” and “mutuelle” in French) to its employees.

What does this means?

What will be the cost for the company and for the employees? And for what benefits?

How does the company setup these contracts?

The French labour law can appear very complex to a foreigner. Our job is to simplify it to the core issue you must deal with.

Therefore, we will see, as simply as possible, what are your legal requirements, how much will it cost you and how to best set it up.

The law

See our previous post.

Cost and benefits

Health insurance cost and benefits

Now that you know what contracts you need what will it cost you? And for what benefits?

The French labour law may be complicated but in the matter of insurance contract some things are universally simple.

The more you pay the more you get.

Life insurance

life insurance

For the life insurance, the minimum cost is of 1.5% of the slice A of the officer’s salary (from 0 to 3218 € in 2016 check our web site for more detail). This contribution is paid 100% by the employer.

With this cost, the benefit is only for the employee. It is a lump sum paid to his (or her) heirs’ should he die. And a lump sum or an annuity should the employee be incapacitated.

As we indicated previously, most of the collective bargaining agreement exceed the law. They usually indicate a higher rate of contributions but with higher benefits as well.

Why would you choose a more expensive life insurance?

Except for the obvious HR reason; to provide a benefit to your employee and avoid losing the employee, you company can benefit from a life insurance contract.

When and employee is on sick leave the French labour law state that company must keep paying the employee.

With the correct life insurance contract, the insurance company can reimburse you the salary of your employee when he is on sick leave. The level of reimbursement will change based on the cost of the contract.

Also, please note that except for the minimum legal cost paid 100% by the company, the rest of the cost can be split between the employer and the employee.

Health insurance

health insurance

The minimum cost of the life insurance will depend on the insurance company you choose. Whatever the case it will a monthly lump per employee. The lowest rate we could find on the internet is of less than 10€ per month.

The cost of the health insurance contribution can be split between the employer and the employee.

The benefits of the health insurance are only for the employee. The benefit is that when the employee has health expenses (doctors, hospitals, drugs …) if the social security doesn’t fully reimburse the employee, the health insurance will reimburse part of what is missing from the social security.

The level of reimbursement depend on the cost of the insurance.

French Payroll Expert advice

When you choose a life insurance you must take into account the HR benefit from it but also the financial benefit. Do you have a lot of sick leave in your company? What is the cost of the sick leave compare to the cost of the insurance? But also do not forget the HR benefits. Do not hesitate to ask you payroll provider what is the usual rate in your line of work.

As the health insurance gives no direct benefit to the company, choosing your health insurance is only an HR benefit Vs financial cost matter. If your employees already have a private health insurance you may want to ask them what the benefits are and align your insurance contract with it.

Life and Health insurance – 1/3 – The Law

life and health insurance

On the 1st of January 2016 it became mandatory for every company under French social law to offer life and health insurance (called “prévoyance” and “mutuelle” in French) to its employees.

What does this means?

What will be the cost for the company and for the employees? And for what benefits?

How does the company setup these contracts?

The French labour law can appear very complex to a foreigner. Our job is to simplify it to the core issue you must deal with.

Therefore, we will see, as simply as possible, what are your legal requirements, how much will it cost you and how to best set it up.

The law

The law

Simply translating the articles of the law would be the best way to make a simple matter complicated. To make it simple here are you legal obligations.

Your company must provide a life insurance to its officers (called “cadre” in French).

Your company must provide a health insurance to all its employees.

Of course, it cannot be that simple.

As you know every company it provided an activity code (called “code APE” in French) when it is registered to the French authorities. Based on that activity code a specific collective bargaining agreement apply.

Most of the collective bargaining agreement state that the company must also provide a life insurance to the non-officers employees.


French Payroll Expert advice


You must first check you collective bargaining agreement. If it indicate a specific life insurance regulation you must apply it.

Otherwise, you must have a life insurance contract for you officers and a health insurance contract for all your employees.

 

French Payroll expert

Bank Holidays in the French Payroll

bank holidays

In France there are 11 bank holidays

  • The 1st of January (New year)
  • The Easter Monday (the 28th of March in 2016)
  • The 1st of May (Labor lay)
  • The 8th of May (2nd world war victory)
  • The Ascension (the 5th of May in 2016)
  • The With Monday (the 16th of May in 2016)
  • The 14th off July (National day)
  • The 15th of August (Assumption day)
  • The 1st of November (All saints day)
  • The 11th of November (End of the 1st world war)
  • The 25th of December (Christmas)

In Alsace-Moselle, the 26 of December is also a bank holiday, and some collective bargaining agreement can add other days to this list.

Rest on a bank holiday

By law resting on a bank holiday is not mandatory (except for workers under 18 years old).

However, it is very common by usage or collective bargaining agreement that the bank holidays be nonworking days.


FPExpert advice

In over 15 years of experience, never have I seen a rested bank holiday not be paid because the employee had less the 3 months of seniority. Even though it is legal it is never done.


 

Payment of a worked bank holiday

Contrary to popular believe, the hours worked on a bank holiday are not paid double.

By law a worked bank holiday is paid as a normal day.

However, a lot of collective bargaining agreement state otherwise. In this case the worked bank holiday is paid in compliance with the agreement.


 

Read the rest of this article in our database accessible on our site for registered members

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Car usage in the French payroll

Company car

Company car: Benefit in kind

Companies can provide their employees with company a car.

If an employee uses a company for personal purposes, this usage is considered as benefit in kind. That means that part of the value of the car is subject to social contributions and income tax.

There are 2 methods to compute the value of a benefit in kind.

Fix value

The car benefit in kind value can be a fix value based on the cost of the vehicle (owned or leased).

Owned car

When the company own the car it provides to its employees, the benefit in kind is of 9% of the purchase cost, all tax included (6% if the car over 5 years when it is bought).

If the employer pays the fuel for the personal usage of the car the benefit in kind is then of 12% of the purchase cost, all tax included (9% if the car over 5 years when it is bought).

Leased car

If the company lease the car used by the employee for personal purposes, the benefit in kind is of 30% of the global cost of the lease, all tax included. This global cost includes the lease, the maintenance and the insurance.

If the employer pays the fuel for personal usage of the vehicle the benefit in kin is then of 40% of the global cost of the lease, all tax included.


FPExpert advice

The benefit in kind is a yearly value. However, it is added monthly to the payroll. It is very common that the monthly value be an estimate of the benefit in kind. And that in December the value of the benefit in kind includes the yearly adjustment.

The best way to compute the global cost of a leased vehicle is to sum the cost registered in the accounting book.


 

Read the rest of this article in our database accessible on our site for registered members.

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Database update: Expenses

French Payroll Expert Database

Our database has been updated.

You will find in our database a new text explaining the reimbursement of expenses in France.

This explanation includes food and housing reimbursement, travel and mileage indemnity.

Don not hesitate to visit our database here.


FPExpert

You can monitor your employees’ internet communication

monitor the computers

A Romanian employee has been dismissed because he used his professional messenger service to communicate with his family.

On the 12th of January, the ECHR (European Court of Human Right) validated the monitoring of the employee’s use of his professional messenger service. This judgment validated the dismissal of the employee.

The ECHR estimated that the employer had the right to monitor the use of the company’s computer. This monitoring is limited within the general framework of his right to verify the fulfilment by employees of their duties and compliance with the company’s regulations. In this case the company’s regulation banned the use of professional computer for personal purposes.

ECHR allow the employer to monitor an employee’s use of his professional messenger service.

This judgment is aligned with the French law. The law authorises the employer to open computer files indicated as personal in the employee’s professional computer. This authorisation is only applicable if the employee is present.


FPExpert‘s conclusion:

If an employer wishes to monitor the employees use of their professional computer, he must make sure that:

  1. The company’s regulation prohibits the use of professional computers for personal purposes. A written company rule or policy is advised.
  2. The monitoring of the computer is limited to verifying the fulfilment of the employee’s duties and compliance to the company’s rules.

Source

Public services: https://www.service-public.fr/particuliers/actualites/A10337


FPExpert

FPExpert’s CEO sworn in as judge to the TCI.

TCI

The TCI (tribunal du contentieux de l’incapacité) is the tribunal of litigation on inability. When someone is suffering a permanent inability, he benefits of an indemnity from the social security.

If the individual disagree with the level of inability or if he disagrees on its value, he can claim an adjustment of the indemnity.

The claim is studied by the tribunal.

FPExpert’s CEO is a representative of the employer to the TCI.

The tribunal is composed of 3 judges. One is a salary designated by an employee union. The second is a professional judge. And the 3 is an employer designated by an employer union.

As member of the CNDI (employer union) Thomas BIDOU, FPExpert’s CEO, was designated to represent the employer at the TCI.

FPExpert

2016 Bank Holidays

bank holidays

Here is the official list of the bank holidays for the year 2016 in France.

Bank Holidays for 2016

2016 Bank Holidays
1st of January
New year
28th of Mars
Easter Monday
1st of May
Labor day
5th of May
Ascension
8th of May
Victory day (1945)
16th of May
Whit Monday
14th of July
National holiday
15th of August
Assumption
1st of November
All saints day
11th of November
Armistice (1918)
25th of December
Christmas day

The 1st of May is the only statutory bank holiday. Work on this day is only allowed in some companies where the activity cannot be stopped (hospitals, public transportation, …)

Other bank holiday can exist in specific region and/or activities. This is the case in Alsace and Moselle.

Employees can work on a bank holiday other than the 1st of May. The law doesn’t indicate any salary increase for a worked bank holiday. However, collective bargaining agreement and other collective accords can state otherwise.


Source
Public Services: https://www.service-public.fr/particuliers/actualites/A10270

FPExpert

Decrease of the AGS contribution.

AGS contribution

On the 1st of January the AGS contribution decrease from 0,30% to 0,25%

The AGS contribution is part of the unemployment contributions paid to the URSSAF. This contribution is financing the salary guarantee scheme.

The AGS contribution decrease to 0,25%

When an employer is unable to pay the salaries of his employees, the employees can claim indemnity to the AGS. The AGs then pays all or part of the salary to the employees. This scheme is financed by the AGS contributions paid by the employers.

This contribution is based on the gross salary limited to 4 social security ceiling.


Source
Public services: https://www.service-public.fr/professionnels-entreprises/actualites/006582
RF Paye: http://rfpaye.grouperf.com/depeches/35603.html

Find out more on the social contributions in our database accessible on our site for registered members.

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