Understanding the structure of employee benefits in France:
Employee benefits in France are comprised of state social security benefits and complementary plans taken out by companies for their employees.
Compulsory state scheme: the French social security coverage
The social security system is a public institution whose goal is to protect citizens against the consequences of events qualified as “social risks”. It aims to be universal and equitable, therefore it is compulsory for all residents, regardless of their age, occupation, place of residence, income or education.
The social security’s general scheme is mandatory for the majority of private sector employees. It provides benefits divided by the French government into four areas:
- Healthcare and sickness (including medical expenses, maternity, survivors’ pensions and allowances, and death grants)
- Old age pensions
- Family benefits
- Employment health and accident risks
Employee benefits in France: corporate insurance policies
Complementary plans are mandatory for companies; they aim at covering shortfalls and/or improve the social security coverage. They are established by collective agreements, made compulsory by law and financed through payas-you-go contributions.
The additional coverage provided depends on:
- The employee’s grade
- A collective agreement that is applicable to the company (determined by the industry and/or geographical location)