Cancellation of complementary health insurance plans: employers gain the upper hand.

Since 1 December 2020, companies and private individuals holding complementary health insurance plans can cancel their policy at any time without charge. This regulatory change is part of a much larger movement initiated by the Hamon Law of 2014, which aimed to strengthen the position of the insured vis-à-vis insurers. How? By increasing competition between providers, improving information for policyholders, and removing obstacles to poli-cy cancellation. Even if it will not upset the market, mid-year cancellation makes transfer-ring to another provider easier and simplifies the lives of policyholders.

How to cancel mid-year

Mid-year cancellation is an addition to other cancellation options. It is available to private individuals, self-employed people and to employers. In the past, the policyholder, as well as the insurer, could cancel at the policy anniversary date , often 1 January, after giving two months notice. From now on, in addition to that option, the policyholder can change health insurer mid-year provided the policy has been in force for more than twelve months. The wording of the law has made cancellation simpler. An ordinary letter or any other means of communication used in taking out a contract, such as an email, may be used. Formal can-cellation can be delegated to the new insurer or to an intermediary under the terms of an agency agreement. Policy transfer should be possible within one month. An employee can now take advantage of this new possibility to change their mind, if they want, as regards optional cover items. This new development does not apply to personal protection policies.

What does mid-year cancellation actually change?

In theory, these new regulations are intended to free the policyholder from constraints that might hinder their freedom of choice. The expected consequences are: greater market volatility, additional efforts to retain customers, renewed competition and the possibility for salespeople to bring in new business at any time. Obviously, for a company, changing complementary health insurance plans is rarely an emergency or a whim, and so no wave of cancellations is expected. Nevertheless, employers will doubtless feel they have more freedom and control over their timetable. This is not insignificant. At the end of 2020, for instance, a number of employers came under strong pressure from insurers including, in some cases, double-digit premium increases or cancellation threats. With mid-year cancel-lations, the policy anniversary date is no longer the key moment in the relationship. The policyholder takes back control. It is not so much about being able to change provider at a whim but more being able to organise negotiating strategy to one’s own timetable.

Are there still other obstacles to cancellation?

The new regulations mean insurers have to change their practices so as to facilitate policy transfers. The industry is committed to providing all the necessary information for setting up policy cover. Delegating cancellation through an agency agreement has the added benefit for employers of freeing them from most of the administrative formalities. Even so, chang-ing insurance provider can be experienced by human resource teams as an anxiety-provoking and time-consuming procedure: setting up data transmissions, direct payment cards, controls and dealing with other issues …On this point, it is the process of digitising our businesses – in which Gerep has been involved for many years across the entire value chain – which will have the most significant impact on market fluidity and the simplification of procedures. When changing insurers becomes just a snap decision, it will still be neces-sary to inform employees, explain policy covers and promote services … A step that can also be delegated to consultants and intermediaries and their specialised marketing teams. With changes in regulations and how we do our business, the complementary health insur-ance market is on the way to greater fluidity. Tomorrow, the only barriers to change may perhaps be the quality of policy covers, associated services and the partnership created with clients.

Damien Vieillard-Baron

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