Social protection for local government staff: a major reform to prepare for before 2029

Decrees No. 2026-986 and No. 2026-987 of 23 October 2026, published in the Official Journal on 24 October 2026, clarify the arrangements for implementing supplementary social protection in respect of occupational disability and incapacity for agents of the French territorial civil service.

Adopted pursuant to Law No. 2025-1251 of 22 December 2025, these decrees notably establish mandatory enrolment in a collective occupational disability and incapacity insurance scheme, while strengthening the minimum level of protection in the event of incapacity for work and disability.

Local authorities must comply with this new framework no later than 1 January 2029. This deadline makes it necessary to anticipate contractual and budgetary arrangements now.

1. The introduction of mandatory collective occupational disability and incapacity insurance schemes

Decree No. 2026-986 of 23 October 2026 sets out the conditions under which local authorities and their public establishments must take out a collective occupational disability and incapacity insurance policy for the benefit of their employees.

This obligation applies to employees hired and remunerated by a local authority employer, including tenured civil servants, trainee civil servants and public-law contractual employees.

Until now, local authority employees could generally choose whether or not to enrol in an occupational disability and incapacity insurance scheme, in particular by taking out an individual policy with an insurer of their choice.

The reform changes this system: local authorities must now offer a collective insurance scheme in which their employees will, in principle, be required to enrol. The aim is to extend protection to employees against the financial consequences of sick leave or disability, while promoting risk pooling.

Exemptions from mandatory enrolment are nevertheless provided for certain employees, including:

• Employees whose employment contracts have a duration of less than six months;
• Employees who already hold an individual occupational disability and incapacity insurance policy covering, at a minimum, the risks of incapacity for work and disability referred to in Article L.827-11 of the French General Civil Service Code, on the date the first collective policy selected by their employer takes effect or, if later, on the date they take up their duties;
• Part-time employees with non-full-time status and apprentices, where the contribution to the collective scheme represents at least 10% of their gross remuneration.

This reform is also accompanied by a mandatory financial contribution from the local authority employer towards the cost of the scheme.

2. Enhanced minimum coverage in the event of incapacity and disability

Decree No. 2026-987 of 23 October 2026 sets out the minimum insurance benefits in respect of occupational disability and incapacity provided for in the national collective agreement of 11 July 2023, concerning temporary incapacity for work and disability.

It distinguishes between local authority employees affiliated with the National Pension Fund for Local Government Employees (CNRACL) and those covered by the general social security scheme.

In respect of temporary incapacity for work, the decree notably provides for the payment of supplementary benefits designed to guarantee 90% of reference net remuneration, in the circumstances and under the conditions set out in the text.

This remuneration notably includes the basic salary, the new index-based allowance (NBI) and additional remuneration components, depending on the employee’s statutory status.

It should nevertheless be noted that this guarantee does not mean that the insurer must directly pay 90% of the employee’s remuneration. Supplementary benefits take into account amounts already paid under statutory protection and, where applicable, by the French Social Security system.

The decree also establishes minimum coverage requirements in respect of disability, with calculation methods that take account of the employee’s pension scheme and individual circumstances.

3. A deadline requiring advance planning of contractual renewals

Decree No. 2026-986 provides for the gradual implementation of the new framework.

• Where no participation agreement is in force on the date of publication of the decree, the new provisions will apply from 1 January 2029.
• Where an agreement is already in force, the new framework will apply upon its expiry, and in any event no later than 1 January 2029.

This reform is therefore likely to generate significant tendering activity involving insurers and the renewal of collective occupational disability and incapacity insurance policies.

Local authorities will need to select policies that meet the new regulatory requirements, while controlling costs and complying with the rules applicable to public procurement.

4. A far-reaching reform for the collective insurance market

Beyond strengthening the social protection of local government employees, the decrees of 23 October 2026 signal a significant transformation of the collective insurance market.

The introduction of mandatory enrolment, the harmonisation of minimum coverage and the new funding requirements will require local authorities and insurers to review their contractual practices.

Although the 1 January 2029 deadline may seem a long way off, preparations for future contracts must begin now.

Local authorities should already be drawing up a compliance timetable, taking into account the expiry dates of existing agreements, the time required to prepare procurement procedures and budgetary constraints.

For insurers and brokers, this period also represents a significant challenge in terms of portfolio renewals.

In particular, they will need to anticipate changes in claims experience, the financial impact of enhanced coverage and the pricing arrangements for collective insurance policies.

For local authorities and insurance intermediaries alike, the challenge will be to reconcile regulatory compliance, the quality of coverage provided to employees and the economic sustainability of insurance contracts.