The provident scheme encompasses all collective guarantees available to employees, former employees, and their dependents, in addition to the benefits provided by the social security system.
It covers two main areas of risk:
- Risks related to death, incapacity, disability, and dependency;
- Medical expenses incurred during hospitalization, consultations, and analyses (illness, maternity, etc.).
In the absence of collective agreements at the branch level, the employer may establish provident coverage within the company either through a collective agreement, by ratification by a majority of those concerned of a draft agreement proposed by the employer, or by unilateral decision.
This choice is governed by:
1. Legal obligations
- The obligation to continue paying remuneration to employees who are unable to work, subject to seniority, for a fixed period;
KEY POINT
– Chairmen and managers of SAS are considered as employees. As a result, they are obliged to contribute to the compulsory provident fund for managers.
– Branches may provide for derogations to the contribution of 1.5% of the Tranche 1 (art L 2252-1 CT).
- The contribution on tranche 1 of managers’ salaries, intended to finance the death benefit;
KEY POINT
There is no obligation for salaried executives to join a mutual insurance company.
However, if they wish to join, they must obtain written approval from the Board of Directors or the General Meeting and keep it on file, as this document may be required in the event of an URSSAF audit.
- The requirement to provide a minimum level of supplementary healthcare coverage.
Point of attention:
In the event of the death of a member of its managerial staff, if an employer has not fulfilled its obligation and has not taken out a provident fund contract for its managerial staff, it may be required to pay the beneficiaries of the deceased employee a lump sum equivalent to three times the annual Social Security ceiling (€131,976 in 2023) plus social security contributions.
Given the complexity of the situation, we recommend engaging the services of COGEP Life to ensure that the formalities are properly completed and that your obligations are fully met.
2. Contractual obligations
The obligation to set up all or part of the supplementary coverage for all or only some of the employees.
3. Social exemptions
Exemptions applied to employers’ contributions intended to finance mandatory collective provident coverage for all employees or a specific category of them.
Point of attention:
In all cases, it is important to refer to the applicable company policies and the document establishing the provident fund or health insurance coverage, as the situation is often complex and may lead to adjustments in social security contributions.
KEY POINT
Exempt employees may change their mind each year and decide to join the company’s provident scheme.
