Purchasing power and mutual insurance: real gain or false promise for employees?

When it comes to the question of purchasing power in the context of compulsory company health insurance, a paradox quickly emerges: does it really save the employee money, like other social benefits, or does it end up costing more than we think?

The company mutual

Compulsory health insurance: a burden on budgets

Since 2016, the ANI law has required all private-sector companies to set up a group mutual insurance plan for their employees. Presented as social progress, this obligation nevertheless raises a legitimate question: does it really improve the purchasing power of the French, or does it ultimately represent a disguised additional burden?

The figures speak for themselves. According to Mutualité Française, mutual insurance premiums will have risen by an average of 6% by 2025, following a 7.3% increase for group contracts in 2024. For an employee, this represents between €40 and €150 per month, depending on coverage, or €480 to €1,800 per year deducted directly from salary.

With inflation already high and salary increases limited, this burden weighs heavily. In fact, in 2024, the French Senate set up an information mission dedicated to the impact of supplementary health insurance on purchasing power, a sign that the issue is of concern even to the highest authorities.

Real gains in purchasing power

Employer profit-sharing or employer financing: a real... but partial gain

First indisputable point: the employer finances at least 50% of the compulsory contribution. So, on a contribution of €100 a month, you immediately save €50, or €600 a year. Some generous companies even go so far as to pay 60, 70 or even 100% of the contributions.

It's a direct benefit, written on the pay slip, and one that employees - whether young, single or parents of a large family - are happy to applaud.

Mutualized rates and access to good coverage

Thanks to the group effect, a group health insurance plan generally costs less than an individual contract with equivalent coverage. The more employees a company has, the more the risk is mutualized, and the lower the rates negotiated. In addition, group contracts generally offer :

• better-structured warranties
• optimized access to optical and dental care thanks to healthcare networks and the 100% Health Plan
• solid protection in hospital
• additional services: teleconsultation, alternative medicine packages, spa treatments, prevention programs.

For an employee with regular care needs, or a family with children, these savings are particularly noticeable.

• What's more, supplements can generate perceived value that is often tangible, i.e., have a positive impact on the perception of the company and your employer brand, and ultimately improve the mental health and HRQoL of your employees.
• the real gain: the one that reveals itself... on the day of the loss
• what if mutual insurance wasn't just another fringe benefit?

Unlike meal vouchers or profit-sharing schemes, which put money in employees' pockets, mutual insurance works differently. It's first and foremost an insurance policy: you pay a monthly premium, and the gain only materializes in case of need, when the risk arises: hospitalization, surgery, dental care, unforeseen heavy or costly health problems...

It is precisely at the moment of need that mutual insurance creates purchasing power: it avoids expenses that many people would not be able to afford.

The "overestimated" gain (other side of the coin):

Taxation of the employer's share

The first major setback is that, since 2013, the portion financed by the employer is subject to income tax. This reduces the benefit received. An employee thus pays more tax because of the employer's contribution to his or her compulsory health insurance scheme.

In other words, your employer's contribution to your health insurance is considered a taxable benefit in kind. If your employer pays €50 per month, this amount is added to your taxable income. So the more generous your employer's contribution, the higher your tax bill.

High taxes on supplementary health insurance

On average, contributions include over 20% in taxes and other levies. These amounts improve neither the benefit nor the employee's purchasing power. They constitute a structural surcharge, for example:

• Taxe de Solidarité Additionnelle (TSA) for responsible contracts
• flat-rate social security contributions for companies with more than 11 employees
• CSG-CRDS on the employer's portion

Inevitable annual increases erode purchasing power

Mutual insurance premiums increase almost every year. These increases can be explained by :

• an aging population
• medical inflation (GP consultation at €30 since December 2024)
• transfers of costs from Social Security to complementary healthcare: Social Security decides to reimburse less for healthcare. To compensate for this reduction in reimbursements, supplementary health insurance companies are increasing the proportion they cover.

Expansion of the reimbursable care basket(100% Health)

As a result, your contribution increases faster than your salary every year, gradually eroding your purchasing power.

The feeling of "paying for others

Mutualization - a founding principle - sometimes creates an impression of imbalance, even though it is at the heart of the system. A young, single employee in good health, who makes little use of his or her mutual insurance, will see little immediate gain. Conversely, an employee in a household with children will see a much higher benefit.

However, this pooling is accompanied by three main cost-increasing disadvantages:

• moral hazard: modification of the behavior of the insured who, as a result of taking out an insurance contract, will subsequently change his attitude and consume more than if he were not covered;
• anti-selection on options: behaviour of the insured who chooses or not to insure according to his needs;
• inflationary bias: coverage by a mutual insurance company can exert upward pressure on prices. Hence the growing interest in healthcare networks, where prices are negotiated and controlled...

For employees who require little care, the cost/benefit ratio may seem unfavorable in the short term, even if protection remains essential for the unexpected.

Conclusion

The link between purchasing power and mutual insurance is not as simple as it might seem. Far from being an immediate cash benefit, a company mutual is first and foremost a form of collective insurance protection that costs money (contributions, taxes), but which also provides protection, sometimes considerably so, at difficult times in life. It preserves and even improves purchasing power by absorbing major expenses that would otherwise put a heavy strain on the budgets of the households concerned. This is where the raison d'être of the group contract comes into its own: to secure, protect and cushion healthcare costs.

The real challenge for your employees' purchasing power lies in optimization: checking that your benefits correspond to your employees' real needs, and above all understanding the tax mechanisms that can reduce the net gain from employer profit-sharing.

A gain sometimes invisible in everyday life... until it becomes essential.

Want to optimize your healthcare coverage and preserve your purchasing power?