Developments of the French law in 2006

OLD-AGE INSURANCE

• Change in rules applicable to an overvaluation of old-age pensions for employees and self-employed persons in the craft, manufacturing, trade and agricultural sectors. The 2003 reform which introduced the overvaluation was providing for a pension increase amounting to 0.75 % for each additional quarter completed after age 60 years by individuals with 160 quarters of insurance. The new rules applicable from 1 January 2007 change the increase rate according to the number of quarters completed after the 60th birthday and the insured person’s age. For each additional quarter completed after the 60th birthday, the increase is 0.75 % from the 1st to the 4th additional quarter, then 1 % beyond the 4th additional quarter; it amounts to 1.25 % for any quarter completed after age 65 years.
• easing of rules concerning the right to work and to receive a pension concurrently especially for individuals who received low wages at the end of their working life. It is possible to work and to receive a pension concurrently, provided that the sum of working income after payment of the retirement pension and pension income (basic and supplementary pensions) does not exceed the amount of the previous wage or 160 % of the SMIC (Salaire Minimum Interprofessionnel de Croissance – Index-Linked Minimum Wage).
• In order to develop the senior employment, under the Social Security Financing Law for 2007 it is not possible any longer to sign branch agreements allowing employers to have their employees automatically retired under the age of 65. The provisional branch agreements already entered into will not be effective any longer after 2009. However between 2010 and 2014 it will be possible to retire before the age of 65, if the retirement date is determined by mutual agreement between the employee and the employer.
• In order to avoid, for fear of future provisions, a massive retirement by 2008, (next appointment for the retirement reform), as soon as the insured persons have achieved the legal retirement age, the calculation parameters depending on duration of contribution and wages will not be questioned by new provisions. Only the insured people who were born after 1947 will be affected by the future reform.
• A specific schedule for purchasing contributions, different from that applicable to insured persons who retire from age 60 years, will be worked out in compliance with the principle of neutral actuarial treatment for insured persons entitled to the payment of their pension before age 60 years.
• Pension increase as of 1 January 2007 : 1.8 %.

HEALTH INSURANCE

• Change of the rules applying to cash benefits for the unemployed persons who resume work and don’t satisfy conditions to be entitled to benefits. For 3 months from the date they resume work the concerned persons still have entitlements to benefits derived from the compulsory scheme they were affiliated to earlier. Similar measures have been taken for some prisoners who resume work after a period of imprisonment.
• The Social Security Financing Law for 2006 introduced a flat-rate co-payment for the procedures weighted by a factor higher or equal to 50 (amounting to 91 € or more) which so far were fully exempted from the insured person’s contribution. These measures were applied by virtue of the decree n° 2006-707 of 19 June 2006 modifying Article R.322-8 of the Social Security Code and were laying down a 18 Euro flat-rate contribution to the care costs. The contribution is removed for some procedures as radio-diagnosis, MRI, C.T. and PET scan as well as the emergency transportation expenses. Moreover some groups of persons as patients suffering from a long-term disease (ALD) for protocol-based care and procedures, pregnant women, in-patient newborn babies, beneficiaries of an accident at work or a disability pension, beneficiaries of supplementary CMU (Supplementary Universal Health Insurance Coverage), are not liable to pay the flat-rate contribution. Only one flat-rate contribution is charged for the same hospital stay, even if there have been several heavy procedures during the same hospital stay.
• Establishing for all the Social Security Schemes an additional period of maternity leave for mothers of premature in-patient babies, if delivery takes place more than 6 weeks before the expected date of confinement and the child needs a post-natal stay in hospital. The additional leave is added to the legal leave and cannot be taken separately. These provisions are applicable to all deliveries taking place from 1 January 2006 onwards.
• Laboratories established in another E.E.A. member State may carry out medical biology analyses on samples drawn in France for French insured people. In order to do so, the laboratory must be established in a member State enjoying approval and authorization conditions which were previously acknowledged as equivalent to the French Scheme conditions:
  • if this is the case the laboratory sends a statement certifying that it has an approval or authorization.
  • if this is not the case, it must get an administrative permit issued after checking that the operating conditions are equivalent to the conditions defined in France.
• The Social Security Financing Law for 2003 provided for a dispensation from compulsory registration under the CMU for frontier workers living in France but subject to the Swiss Law, who are on request exempted from a compulsory registration under the Swiss Health Insurance Scheme. The term of this dispensation was set with reference to the provisional period of implementation of the EU – Switzerland agreement which was to terminate 7 years after the effective date, i.e. on 31 May 2009. Nevertheless the provisional period of the agreement on the free movement of persons should last 5 more years (up to 31 May 2014). The provisions of Article L.380-3-1 of the code are thus altered in order to take the extension into account. These provisions are not applicable to frontier workers and to their dependants who were registered under the general scheme at the effective date of the Social Security Financing Law for 2007.

FAMILY

• Implementation of parental attendance daily allowance created by the Social Security Financing Law for 2006. Maximum duration of entitlement : 3 years for the same child and the same disease, maximum number of daily allowances : 310. The daily allowance amounts to 39.8 € or 47.02 € when a child is supported by a single person. A cost supplement may be granted, if the parents produce documentary evidence and if they satisfy the means-test criteria, when their monthly expenses are higher than a certain limit owing to the child’s handicap or disease.
• Implementation of the optional supplement for free choice of working time (COLCA) provided for by the Infant Accommodation Benefit (“PAJE?). In order to be entitled to the optional supplement for free choice of working time (COLCA) for a maximum of 12 months you must have worked and have been insured for old-age pension for at least 8 quarters during the 5 years preceding the child’s arrival into the household, you must support actually and permanently at least three children and you must stop totally working.
  The beneficiary of “COLCA? is supposed to renounce the supplement for free choice of working time (“CLCA?) which is lower and can be paid up to the child’s third birthday. Amounts from 1 July 2006 : 587.95 € if the basic allowance of the PAJE is paid and 758,95 € if the basic allowance of the Paje is not paid. This new benefit which comes into effect as of 1 July 2006 can be paid only for children who were born or adopted from this date.
  In order to promote creation and development of innovative and alternative methods of accommodation of young children and to satisfy family needs by setting up experimental facilities, standing midway between individual and group accommodation, it will be possible for families who entrust their children to such facilities to receive the supplement for free choice of child care provided for by the Infant Accommodation Benefit (PAJE).
• In case of alternating custody of the child resulting from a divorce or separation of the parents who both have authority to look after the child, each of them may receive the family allowances. At first these measures will only affect family allowances. And thus under some conditions to be defined by regulations, it will be possible to acknowledge the status of beneficiary to each of the separated parents.

Family support leave

• It is possible to reduce working time or stop working for a few months to take care of a dependant relative - (spouse, common-law spouse, civil union partner, ascendants, descendants). The employee must have worked for the same company for at least 2 years. He/she can take a three-month leave; this leave can be renewed, but not for more than one year during the whole working-life. At the end of the leave the employee must resume his/her job or a similar occupation with a remuneration at least equivalent to the previous one. The supported person must live regularly and permanently in France and not be placed in a nursing facility or at someone else’s home. Modes of enforcement of the law will be laid down by a decree.
• The leave is neither paid nor compensated, but beneficiaries are still covered by health insurance and when their income is less than a certain limit, they are insured for old-age pension under conditions which must be defined by a decree.

UNEMPLOYMENT AND RETURN TO WORK

• Approval of the Interprofessional National Agreement of 18 January 2006 and of its various instruments for the 2006-2008 period. This agreement is aiming at promoting a fast return to work, thanks to a boosting support to job seekers and to aids given for their training.
• Moreover in order to make easier a return to work of persons in receipt of minimum subsistence benefits, a number of measures (return-to-work premium, concurrent payment of wages and benefit, monthly bonuses) have been implemented in order to give an incentive to the concerned people to perform a gainful employment. These measures are meant for beneficiaries of social/occupational integration minimum income, single parent’s allowance, provisional tide-over allowance, specific solidarity allowance.

ORGANIZATION

Dematerialization of social returns in order to make easier the procedures that companies must carry out and to show increases in productivity :

• payment of contributions by bank transfer as soon as the yearly amount of contributions paid by a company is exceeding a certain amount (7 million Euros). If this statutory requirement is not satisfied, a 0.2 % increase of amounts paid by another means of payment will be charged.
• obligation for companies to make their returns by electronic mail. The triggering threshold for this obligation is set at 800,000 Euros as of 1 January 2007, 400.000 Euros as of 1 January 2008 and 150,000 Euros as of 1 January 2009.

FIGHTING FRAUD

• Setting-up of a National Committee to fight against fraud as regards social welfare in order to make actor forces aware of the problem and to coordinate fighting actions and policies in the field of social welfare.
  Limits have been set for each insurance branch and beyond these limits the Social Security Funds will lodge a complaint for fraud and bring in a civil action.
  Penalties are provided for individuals who induce insured people not to comply with the provisions of the Social Security Law and especially not to register to a Social Security Fund or not to pay Social Security contributions. These new provisions enable all basic schemes and not only self-employed schemes, to bring an action and ask the judge to punish the individuals who induce people not to pay contributions. The Social Security Financing Law for 2007 enables also the Social Security Funds to take into account if necessary the living standards for assessing resources.
  Setting-up of a National Directory common to institutions in charge of the management of the compulsory Social Security Scheme, paid leave offices, unemployment insurance institutions, concerning beneficiaries receiving benefits from them.
  To benefit from the right of retention stipulated under Article L. 16168 of the Social Security Code it is necessary to reside in the French territory. The individual who leaves the territory must return the “carte vitale? (card allowing access to care). Modes of implementation of these provisions will be laid down by a decree.
  Some provisions concerning health insurance and family benefits will not be applicable to workers who are posted to France and are not paying contributions to the French Scheme in accordance with an international agreement. This provision aims at ensuring the effectiveness of the link between contribution to the National Solidarity System and payment of benefits.