Social Insurance Shake-Up for Small Business Owners
Friday 10 January 2020
The social insurance fund for the self-employed has been abolished, so what are the consequences for small business owners in France?
In 2017 President Macron announced that the social insurance fund for the self-employed, called the Régime Social des Indépendants, was to be abolished.
The RSI, a private non-profit making body, was formed in 2006 out of the merger of three separate insurance funds for the self-employed, but it has been plagued with serious administrative failures.
The role of the RSI was to manage the health cover, pension benefits and the collection of certain social security contributions for self-employed artisans, commerçants and the professions libérales.
It was abolished as a legal entity at the end of 2018, and RSI staff were transferred to a newly created nominal branch of the State-run system, called the Sécurité Sociale des Indépendants (SECU).
Many of those staff included in that transfer are those who worked for the accredited private bodies (called 'organismes conventionnés') to whom the RSI delegated a great deal of its health insurance responsibilities, eg, 'RAM' (Réunion des Assureurs Maladie). These bodies should not be confused with the complementary 'top-up' health insurers, although in a typically French mash-up some of the 'mutuelles' are also delegated bodies for statutory health insurance cover!
A transition period of two years was put in place to allow for the integration and transfer of staff and systems from the RSI and their accredited bodies into the State system, called the Régime Général de la Sécurité Sociale.
That transition period ended on 1st January 2020, since when the new administrative framework has been put in place, with three State agencies taking up the reins, as follows:
- Responsibility for health cover and reimbursements has been transferred to the local health authorities, called the Caisse Primaire d'Assurances Maladie (CPAM);
- Responsibility for pensions has been transferred to the national pension agency, called the Caisse Nationale d'Assurance Vieillesse (CNAV), administered through the regional Caisses d'Assurance Retraite et de la Santé au Travail (CARSAT);
- Responsibility for all social security contributions has been transferred to the social security collections agency URSSAF.
No action is required by business owners, as the transfer will occur automatically, for those to whom it applies.
In practice, it will not be until the middle of February when the transfer from the organismes conventionnés for health reimbursements will be completed. The transfer from RAM is planned for 20th January with others occurring during February.
Those concerned will have received, or will be receiving, a letter advising them of the new arrangements, and of the need to update (mettre a jour) their carte vitale in a chemist or with their doctor and to send details of their bank account (using a 'RIB') to enable health reimbursements to be made if the information is not currently registered with RSI. Their social security number will remain the same, but they will need to request a new Carte Européenne d'Assurance Maladie.
In addition, many professions libérales remain in their own main pension insurance fund, run through the umbrella Caisse nationale d’assurance vieillesse des professions libérales (CNAVPL), and their complementary pensions schemes will also remain outside of the new structure. These funds will also continue to manage invalidity and death benefits.
Farmers will also continue to have their own social insurance arrangements through the Mutualité Sociale Agricole (MSA).
The change in the administrative architecture will not change the level of the social security contributions paid by business owners, nor will there be any change in the rights to which they are entitled.
The proposed creation of a more universal pension system, which is the subject of such controversy in France at this time, may well have implications on these pension schemes.