The separation is official. The employment contract has been terminated. For the former employee, the portability of health and disability insurance ensures a smooth transition. But beware: this legal “freebie” hides a heavy economic reality for the company.
The mechanism seems painless. Portability prevents a gap in social protection following job loss (dismissal except for gross misconduct, mutual termination, or the end of a fixed-term contract). It maintains company coverage for a duration equal to the last contract, up to a limit of 12 months. The Social Security Code is formal: this continuation is provided “without any contribution requirement” for the ex-employee.
The pooling trap. However, this “free of charge” benefit comes at a price, paid for by your active employees. The cost of risk for departed employees is injected back into the overall financial balance of your group insurance contract. In other words, your current teams are paying for their former colleagues’ coverage through their own contributions.
The budgetary backlash. Portability beneficiaries generally consume more healthcare and disability benefits than active employees. This imbalance degrades your company’s “Benefits / Contributions” (B/C) ratio. In the event of a deficit account, the insurer will increase contribution rates during annual negotiations. The employer’s contribution will skyrocket for the entire staff. Today’s free benefit finances tomorrow’s HR cost inflation.
Keeping control of the trajectory. Audit your income statements every year. Immediately notify the insurer when an ex-employee finds a new job to terminate their rights. Finally, integrate this latent cost into the budget of your reorganizations (redundancy plans or mutual terminations).
When risk is exported,
ærige helps you crunch the numbers.
