This piece was written by Jean Taquet, whose work focuses on helping Americans cope with French administration, and the logistics of moving to and living in France. http://www.jeantaquet.com
I would like to thank the Association of Americans Resident Overseas (AARO) for its help on this issue. They are on the forefront of this, and as far as I know are the only organization actively helping members deal with the problem and possibly lobbying in favor of a change. In particular, I would like to thank Eric Fenster, the AARO member who helped me draft this section.
We had feared that the new system would result in adverse situations after being implemented for about two years without collecting premiums for the coverage offered. In fact, the situation is even worse than I had expected. I would like to highlight some of the worst examples I know of (and I am not sure I have identified all of them).
1 – The 2016 premium came due after all.
In almost all situations, especially in the private sector, people expect to have to pay health insurance premiums on time. For over a year, the impression was given that the premiums for 2016 would not be collected. I was one of the few doubting that this would be true once the administration got its act together. Sure enough, it was announced that January 15 was the deadline to pay the 2016 premium. But this came as a surprise to many.
2 – People have been charged for coverage they do not have.
Since December 2017, foreigners who declare their foreign income in France while being properly covered by a private health insurance policy have received bills from URSSAF for 2016 coverage that they have never had. The reason is that URSSAF, instead of checking the database of the caisses primaires d'assurance maladie (CPAM) to find out who was covered by the old couverture maladie universelle (CMU, which PUMa replaced), got its information from the tax office and never checked if people were covered by the public system.
People who received the URSSAF bill had subscribed in good faith to private medical insurance, and no public authority had given any notice of an obligation to join the public system. Indeed, for nearly two years no one was even able to answer questions from those who had heard about PUMa.
When I learned from my AARO connection that many Americans had received the bill, we began to help them contest it on the grounds that it charged for a health coverage system in which they were not enrolled, even though French legislation stated that payment liability did not begin until the date of enrollment.
3 – People are not being charged for coverage when they need it.
This might sound like good news but it can have very adverse consequences. URSSAF was supposed to charge 8% of the global taxable net income for the year, payable per quarter. It took considerable work to figure out that some income, mainly retirement income, is exempt from this 8% premium calculation. For many foreigners who have retired in France, most if not all of their taxable income is retirement income. So they received a letter stating that they owed nothing.
The problem is that the prefecture insists all foreigners have comprehensive coverage from either the public system or a reputable company and also pay for health coverage. So foreigners who were covered by the CMU and now PUMa must show that.
First, they have sufficient assets or income from a foreign source and that the annual net income exceeds minimum wage (14,000€).
Second, that in the case of being covered by the public system, the income used for calculating the 8% premium exceeds 9,654 euros. If the income on which the calculation is based is less, the foreigner pays nothing for the health coverage.
In the past, the prefecture has always interpreted the absence premium payments, as indicating insufficient income, as they then expect a minimum income of 14,000 euros for the same period. In such situations, the prefecture systematically denies renewal of the carte de séjour based on insufficient funds entitling the foreigner to free coverage. It was somewhat logical to expect foreigners to pay for their coverage. Today, though, many foreigners have an income far exceeding this amount and yet the new way URSSAF calculates the premium results in their coverage being free of charge. The main reason is that pensions are not used in URSSAF’s cotisation subsidiaire maladie (CMS) calculation, i.e., the name of the premium paid for the public coverage.
I have no idea how the prefectures will address this issue. If they do not get new guidelines, I fear the worst, i.e., refusal to renew cartes de séjour. I really feel that one part of the administration is not keeping another part informed, and the refusal to renew the “visiteur” immigration status will come as a very nasty surprise. One can hope that properly documenting the way the CMS is calculated should force prefectures to reconsider their procedures in view of this radical change.
4 – Some people previously covered by CMU never declared their income to France.
Holders of a carte de séjour visiteur can have the card renewed without showing a French income tax statement. I advise my clients nevertheless to show the two first pages of their last #1040 to the prefecture just to prove that they had made an income declaration. But whether these people have complied with French fiscal law is irrelevant here.
Because URSSAF got only tax information from the French tax office and not CPAM, such people never got a letter and were never charged, but they continue to be covered, as CPAM does not verify whether the insured is paying into the system.
How long will this situation last? What are the likely consequences regarding the premiums owed and not paid? I ask the same question about the fact that there was no filing in France even though the person was clearly a French tax resident.
I fear the worst, as URSSAF can easily and rightfully consider this as tax cheating. In this specific instance, to help understand the gravity of the situation, I would compare URSSAF to the American Social Security.