The suspension of an employee’s employment contract, whether for illness, short-time working, maternity leave or any other reason, raises an essential question for the employer: should you continue to provide them with the company’s health insurance and death and disability cover? Under a regulation made permanent in 2021, the answer is often yes, and failing to meet this obligation exposes the company to a URSSAF reassessment. To help you see things clearly, MIA Assurances takes stock of the applicable rules, the cases concerned and the steps to take to stay compliant.
What is the suspension of the employment contract?
Companies use the suspension of the employment contract in many situations. It can occur at the employer’s initiative (short-time working in the event of a drop in activity, for example) or at the employee’s request (sabbatical leave, unpaid leave, parental leave). It can also result from an unforeseen event: sick leave, accident at work, maternity or paternity leave.
During this period, the contract is not terminated: it is simply “put on hold”. The employee remains part of the company’s workforce, which is precisely what raises the question of maintaining their supplementary social protection, their health and death and disability cover.
An obligation arising from the health crisis, now permanent
The Covid-19 crisis and the massive use of short-time working led the legislator to intervene. The law of 17 June 2020 first imposed, on a temporary basis, the continuation of health and death and disability benefits for employees on indemnified short-time working.
These provisions, initially temporary, were then made permanent and extended by the interministerial instruction DSS/3C/5B/2021/127 of 17 June 2021, whose rules have since been incorporated into the French Social Security Official Bulletin (BOSS). What was initially just an emergency measure has thus become a lasting obligation, applicable to all indemnified contract suspensions.
In which cases is continuation compulsory?
The principle is clear: when the suspension of the employment contract gives rise to the payment of a replacement income, the continuation of health and death and disability benefits is compulsory. In practical terms, you must maintain the cover of your employees (and their dependants) when:
- the employee’s employment contract is suspended;
- the salary is maintained, fully or partially;
- you fund, at least in part, supplementary daily allowances;
- you pay a replacement income (short-time working, long-term short-time working, redeployment leave, mobility leave).
The main cases concerned are therefore suspensions linked to illness, an accident, maternity or paternity, provided they are indemnified. During this period, the funding terms remain unchanged: the employer and the employee continue to pay their respective share of the contribution.
The case of non-indemnified suspensions
Conversely, when the suspension of the employment contract is not indemnified by the employer, the continuation of benefits is not compulsory. This is the case, for example, of unpaid leave, sabbatical leave or leave to set up a business.
The employer is then free to choose: they can decide to maintain the benefits, or not, without the collective nature of the scheme being called into question. If they opt for continuation, this option must be expressly provided for in the scheme’s founding act, specifying the terms for covering the contribution.
Why is this a major issue for the employer?
Meeting this obligation is not just a matter of goodwill towards employees: it is a condition of the collective and compulsory nature of your social protection scheme. And this collective nature is itself a condition for benefiting from the social contribution exemptions on the employer share funding the health and death and disability cover.
In the event of non-compliance, URSSAF can, during an audit, reintegrate into the contribution base all the employer contributions paid for all employees. The penalty can therefore be particularly heavy, especially for a VSE or an SME. Essential point: simply updating the insurance contract is not enough to rule out this risk. It is the legal act establishing the scheme in the company that must be compliant.
The compliance deadlines
The instruction of 17 June 2021 set deadlines for bringing the scheme’s founding acts into compliance, now passed:
- for schemes set up by unilateral decision of the employer (DUE), compliance had to be ensured by 1 January 2023 at the latest (after a postponement);
- for schemes arising from a sector-wide agreement, a collective bargaining agreement, a company agreement or a referendum, the deadline was set at 1 January 2025.
Since these dates have now passed, any company whose founding act has not been updated is exposed to a risk of reassessment. If you are not sure your documents are compliant, it is strongly recommended to have them checked without delay.
What concrete steps to be compliant?
To secure your scheme, several actions are necessary. First, you should check that your insurance contract (health and death and disability) properly includes the continuation cases provided for by the regulations, as most insurers have sent an amendment to this effect to their clients. Next, you must update the scheme’s founding act (DUE or collective agreement) to include these continuation obligations. Finally, you are required to inform your employees of these changes, the information formalities being an integral part of the procedure.
MIA is by your side
The compliance of a supplementary social protection scheme rests on a subtle balance between the insurance contract, the legal act that establishes it and the information of employees. The slightest flaw in this structure can prove costly during a URSSAF audit. As an advisory broker, MIA Assurances supports its client companies in developing and bringing their health and death and disability contracts into compliance, so that they retain both their employees’ peace of mind and their social and tax advantages.
