Health Charge Under Legal Challenge
Tuesday 07 August 2018
The legality of the PUMA annual health charge is to be tested in the French Constitutional Council.
Earlier this year we reported on the difficulties being faced by many readers over the introduction of the health charge payable by economically inactive households.
The charge, called the Cotisation Maladie Subsidiaire (CMS), is being imposed under the new ‘universal’ system of statutory health cover, called the Protection universelle maladie (PUMA).
PUMA is an adaptation of the former Couverture Maladie Universelle (CMU), which it replaced in 2016.
Under the system, affiliated households are liable for a charge of 8% on their revenus de patrimoine (rental income, investment income, capital gains) that exceeds a minimum threshold each year, which is currently €9,807.
Those EEA nationals who obtain health cover via an S1/A1 certificate of exemption do not pay the charge.
The law would similarly seem to exempt early retired households in receipt of a pension/annuity, although the application of this rule in relation to international pensions remains inexplicit and variably applied.
In addition to retired households, those who are also considered to be ‘economically inactive’, and therefore liable for the charge, are those salaried or self-employed persons whose professional income is no greater than €3,923pa, but with revenus de patrimoine greater than €9,807. However, those in this category with a pension or annuity are exempt, but once again the rule is imprecisely defined.
The position of those who obtain their health cover via a private health insurance policy is unstated in the regulations, but the authorities have refused an exemption from the charge for such households.
Not everyone has been adversely affected by the change, as some of your mails to us testify, but as will be evident from the above summary, the parameters of the charge lack clear definition and are subject to a great deal of legal uncertainty. Your mails also indicate strongly that there is no national uniformity on how the charge is being calculated or who is liable.
The lack of clarity in the law has not been helped by the customary uncompromising approach taken by URSSAF, the social security contributions collection agency, who are responsible for invoicing households, using fiscal information provided by the tax authority.
It is perhaps, therefore, not surprising to find that the French Constitutional Council (CC) has been asked to rule on the legality of the charge.
The reference to the CC has been made by the supreme administrative court in France, the Conseil d’Etat, following representations to the court that the charge was introduced without due process, and that, specifically, it violated the principal of equality of citizens in relation to public charges, stating:
«Le moyen tiré de ce qu’elles (les dispositions de l’article L 380-2 du Code de la sécurité sociale) portent atteinte aux droits et libertés garantis par la Constitution, notamment au principe d’égalité devant les charges publiques, soulève une question présentant un caractère sérieux».
Any breach of this principle has to have a rational basis, which is not evident from the law as drafted.
A great deal of the case rests on the irregular incorporation of those with a low professional income into the system, the somewhat arbitrary income threshold that is used to determine their liability, and the inequality that this creates between those below and above this threshold, or with similar incomes, but from different sources.
Even the example provided by the health authority in their circular on the calculation of the charge shows that because of the formula used it is possible for a household with a higher income to pay less than a lower income household.
The position of those with private health insurance, and therefore not affiliated to the State system may also to be considered by the CC.
In a submission made to the court, the Paris based Association of Americans Resident Overseas (AARO) have stated that many of their members have received a demand for payment of the charge for 2016, despite having a private policy, a condition of obtaining their visa to live in France. These policies are also required by most prefectures on renewal of a residence permit.
The demand for payment was being made notwithstanding the fact that households had no means of obtaining reimbursement of their health costs from the State as they were not affiliated to the system.
In their submission AARO state that : L'Urssaf n'a jamais expliqué comment les personnes «redevables» pour la CSM depuis janvier 2016 auraient pu exercer leurs droits au remboursement des frais médicaux sans immatriculation et sans être en possession de cette attestation ou comment elles peuvent le faire rétroactivement maintenant qu'on leur dit qu'ils en étaient bénéficiaires pendant 2016 et 2017.
In correspondence we have seen, URSSAF have stated that liability to the charge is not dependent on affiliation to the State system, or reimbursement of health costs! This seems an extraordinary statement to make, given that in the legislation liability to the charge arises precisely from affiliation.
The decision of the CC is expected in October.
Do please continue to tell us about your experiences. You can contact us at email@example.com.