"Covid tax" and supplementary health insurance

The political justification that the Government provides for the creation of the "Covid tax" can be found in the explanatory memorandum of the draft Social Security Financing Law for 2021:

"The decline in healthcare activity, as well as measures taken by public authorities to guarantee 100% coverage by mandatory health insurance for certain expenses, have mechanically led to an improvement in the financial results of supplementary health insurance providers."

Consequently, Article 3 of the LFSS for the year 2021 refers to an "exceptional contribution to cover expenses related to the management of the Covid-19 epidemic".

Exceptional, because – we are told – this contribution will only be applied to contributions collected for the years 2020 and 2021.

Less enthusiastic, the insurance industry is talking about a "Covid tax".

The latter is based on contributions paid under supplementary health insurance contracts for the benefit of mutuals of the Mutual Code, companies governed by the Insurance Code, provident institutions of the Social Security Code and those of the Rural and Maritime Fishing Code, and foreign organizations operating in France in LPS.

The rate applied to contributions collected in 2020 is 2.6%. The Government hopes to raise €1 billion for 2020 and €500 million for 2021.

The proceeds from this tax will be allocated to the National Health Insurance Fund.

This new "exceptional contribution" is in addition to the "additional solidarity tax" that pre-existed it.