Employee insurance schemes – Legal changes to Employer Unilateral Decision

As a reminder, the collective and mandatory insurance schemes (healthcare, death & disability and, optionally, the supplementary pension plans) can be implemented by companies either via a Referendum, or a Collective Agreement, or an Employer Unilateral Decision (EUD).

The schemes implemented by EUD require a special attention in the coming weeks, as new legal requirements may oblige employers to amend their existing EUDs to ensure their plans remain compliant and maintain  their collective and mandatory nature (which is a condition for the exemption of social charges on the employer contributions to the plans).

1/ Post-Covid trauma: Changes related to periods of forced total/part unemployment (furlough) in lockdown periods

The benefit of employee insurance schemes is generally suspended during periods of suspension of the employment contract such as parental leave or during a sabbatical.

As a consequence of the lockdowns and forced unemployment periods during the Covid pandemic, the government decided that employees whose employment contracts were suspended due to the pandemic, and whose salaries were partly or totally compensated by the State would remain covered by their companies’ insurance schemes.

This change has become mandatory for insurance companies and became effective on January 1st, 2022.

Companies whose insurance contracts were amended accordingly must reflect the change in their EUDs, before January 1st, 2023.

2/ Changes related to the unified mandatory pension regime AGIRC-ARRCO

The mandatory pension regimes used to make a distinction between “non-cadre” and “cadre” employees: all employees were formerly affiliated to the ARRCO regime, and only the Cadre employees were also affiliated to the AGIRC regime.

Since 2019, these two regimes have merged, and all employees are currently contributing to a unique regime  called “AGIRC-ARRCO”.

What effect does this have on the EUD for insurance schemes?

When companies implemented their collective insurance plans, it used to be a very frequent practice to distinguish between populations in the EUD using a reference to the contribution of employees to the AGIRC regime (which meant that the insurance scheme in question was implemented for “cadre” employees only).

Now, such distinction makes no sense as all employees contribute to AGIRC and ARRCO.

In addition, the Collective Bargaining Agreement related to the welfare and pension of the Cadre employees (from March 14th, 1947) was replaced in 2017 by a new National Interprofessional Agreement, which modifies the potential references to specific articles of the CBA.

Consequently, the insurance schemes implemented before January 1st, 2022, by Employer Unilateral Decision, and making a reference to a specific population (using any of the following terms: “Cadre”, “non-cadre”, “employees contributing [or not] “to AGIRC”, “referred to [or not] by articles 4, 4bis and 36 of the Cadre CBA of March 14th, 1947”, or by reference to a base salary equal to 2, 3, 4 or 8 times the AGIRC ceiling) must be updated before December 31st, 2024.

While these may seem like non-essential changes in form, to fail to make these changes could have material financial consequences for companies, in that the employer contributions to the insurance schemes will no longer be entitled to exemption as of January 1st 2023 for 1/ and as of January 1st 2025 for 2/. Consequently, in the event of a social security audit, a reassessment could be made on such exemptions.

If you have not subscribed to our Employee Management Services offering, please do not hesitate to contact us for any question or any assistance that you may require with this topic.

If you are one of our recurring clients who has subscribed to our Employee Management Services offering, we will be contacting you during the month of November and making a personalized recommendation of any necessary corrective actions. If you do not hear from us, then no amendment to your EUD is required at this stage.

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