Too Early to Panic on New Health Insurance Rules in France
Friday 14 September 2007
Confusion continues to reign over the right of expats to access the State health insurance system, although some things are becoming clearer.
In our last newsletter we gave news on rule changes to health insurance cover for EU expats in France.
Under these changes, it would seem those proposing to take early retirement would need to take out private medical insurance until they reached the age of retirement, when they could then join the State insurance system under reciprocal 'E121' arrangements.
However, we were unclear on the precise application of the new rule.
It does seem we are not alone, for even the French civil servants cannot agree between themselves on how the rule should operate.
In particular, the English speaking health help-line in France appears to be taking a hard line on the new regulations, which is not entirely shared by other civil servants to whom we have spoken, both in the regions and in Paris.
Accordingly, the following information is given with the strong caveat that the situation is still fluid and there may yet be further changes. The French Ministry of Health have promised an early clarification statement.
Existing CMU Expats
One thing that appears to be firming up is the situation for those already in France, and in the system. French officials to whom we have spoken appear to be denying any intention of ever applying these rules retrospectively to those already installed over here.
They advise that existing early retirees who are in the State health insurance system (the CMU) would be able to remain so indefinitely.
This is a position which is also supported by a recent statement from the British Embassy in Paris, who have stated:
"The British Embassy are in close touch with the French Ministry of Health to clarify the situation regarding healthcare provision for EU citizens who are inactive and below retirement age in France.
The French authorities are applying strictly the EU Directive (2004/38) which will mean modifying the healthcare coverage available to some inactive people, including early retirees, from other EU countries who will be taking up residence in France.
However, the French Ministry of Health have assured us that the provision of healthcare to people already resident in France will not be affected."
Prospective Expats and E106 Holders
As far as those intending to relocate and those currently on a 'E106' are concerned, the situation is less clear cut. It may well be that, at the expiry of their E106, they will be required to take out private health insurance, or to be insured through a professional activity or employment.
However, even this gloomy outlook is by no means certain, as has been explained to us by a senior French health official. It may well be that those who arrive in France through a E106 would be able to transfer to the contributory State health insurance system when cover under the E106 expires.
Under this scenario, the new law would simply deny insurance cover to those who arrive in France without a E106. Those who would be affected by this rule would be those without a full national insurance record over the two years prior to relocating to France.
In short, those who arrive in France with a E106 would be considered to be resident on a 'regular' basis, and would then later be permitted into the State system.
If the French Government were not to accept this more generous interpretation of the law, we are by no means convinced that a tougher interpretation would 'stick' legally.
If someone from the EU was resident in France in a manner that is 'regular' (i.e. through a E106) then it is quite possible that to later deny them access to the contributory State health insurance system would be in breach of both French and European laws.
It would certainly be very interesting to see what would happen if an expat denied access to the CMU decided to challenge it through the French Social Security Tribunal.
Business and Employment Solutions
Even if our worst nightmares came true, and expats were denied access to the CMU, there are business and employment based solutions that are worth investigating.
If you were able to set up and run even a very small business in France, you would only be liable for a minimal level (circa £1500) of health and social security contributions; potentially lower than the cost of private medical insurance, or even the amount that would otherwise have been paid into the CMU from an early retirement pension! (You would only pay health contributions on your business profits, not your early retirement pension).
We are also intrigued as to what would happen in the case of those who took temporary employment or business activity, which later ceased. We believe it would then be possible for that person (and their dependants) to enter the CMU. This is because the law only refers to expats arriving with no employment, and who maintain that status. It does not say what happens when the cycle of inactivity is broken, but later renewed. It just may be that all this commotion about health cover will be a case of plus la change....?
Let us have your experiences and comments in our Forum.