mytest
UPDATES ON TWITTER: arudoudebito
Hi Blog. Here’s a good article describing issues of health insurance and pensions, and how recent revisions clarifying that every resident in Japan (including NJ) must be enrolled may expose the graft that employers have been indulging in (“opting out” of paying mandatory social security fees, encouraging NJ not to pay them, or just preying on their ignorance by not telling them at all) to save money. The problem is, instead of granting an amnesty for those employees who unwittingly did not pay into the system, they’re requiring back payments (for however many years) to enroll or else they get no visa renewal! Once again, it’s the NJ employee who gets punished for the vices of the employer. Arudou Debito in Sapporo
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THE ZEIT GIST
New law: no dues, no visa (excerpt)
Enrollment in Japan’s health insurance program tied to visa renewal from 2010
The Japan Times, Tuesday, July 28, 2009
By JENNY UECHI
http://search.japantimes.co.jp/cgi-bin/fl20090728zg.html
In your wallet or somewhere at home, do you have a blue or pink card showing that you are enrolled in one of Japan’s national health and pension programs? If not, and if you are thinking of extending your stay here, you may want to think about a recent revision to visa requirements for foreign residents. The changes, which the Justice Ministry says were made in order to “smooth out the administrative process,” may have major consequences for foreign residents and their future in Japan.
On a drab, rainy Sunday in June, a group of foreign workers gathered at the office of the National Union of General Workers Tokyo Nambu in Shimbashi to discuss an equally drab topic: social insurance. According to a new immigration law passed by the Diet earlier this month, foreign residents will be required to show proof of enrollment in Japan’s health insurance program in order to renew or apply for a visa after April 1, 2010…
The bottom line is that all residents of Japan … have to be enrolled in one or other of the two systems. The revised visa laws, therefore, should pose no threat to anyone’s visa renewal, because every foreigner in Japan should already be enrolled. However, the reality is that most foreigners in Japan do not have either form of insurance…
Louis Carlet, deputy secretary of Nambu, laid it down for everyone in the room to understand. There are a few basic things that all foreigners in Japan have to know, he explained: first, that everyone over the age of 20 in Japan is required to enroll in an approved Japanese government health insurance scheme and pension fund. If you are under 75 and working at a company that employs more than five people, this most likely means the shakai hoken (social insurance) program; if you are unemployed, self-employed or retired, the equivalent system is thekokumin kenko hoken and kokumin nenkin (national health insurance and pension). The only people exempt are sailors, day laborers, and those working for companies employing less than five people, or for firms without a permanent address (e.g. a film set).
The two systems cover different ground, all of which is explained in detail at www.sia.go.jp/e/ehi.html….
Rest of the article at:
http://search.japantimes.co.jp/cgi-bin/fl20090728zg.html
102 comments on “Japan Times: NJ visas now contingent on enrollment in Japan’s health insurance program starting April 2010”
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I find it quite naive that the labor union reps think that this new regulation will magically make employers start following the law regarding shakai hoken.
Without enforcement (which there hasn’t been, and I don’t see any signs there will be more) laws don’t really mean anything. And it seems the only new enforcement that will be happening is against the individual gaijin who tries to renew his visa without insurance.
Immigration will deny the visa, but Immigration has no relationship with the Ministry of Labor or enforcing labor laws.
The only result will be the dodgy employers telling their workers to enroll in kokumin kenko hoken at their own expense, while continuing their polcies of denying that their gaijin employees are actually full-time workers.
For the employers who want to jsut keep a steady stream of short term (under 1 year) contract workers, this rule will actually HELP the shifty employer.
Immigration will helpfully deny visa extensions, thus making any claims to contract extensions and employment rights moot.
The only hope for the hapless gaijin is that whoever is at the health insurance desk on the day you walk in to enrll yourself will decide not to make you pay 2 years’ back dues. Each civil servant can interpret the law differently. A total crap shoot as anyone who has butted heads against the Japanese bureaucracy knows.
Perhaps it’s time to start practicing to bow to your knees and cry real tears (not so hard if you’re asked to cough up 1,000,000 yen in back dues or effectively be deported)
Though perhaps being informed about the law which requires employers to pay back dues if they willingly avoided enrolling you would help as well.
Is there any Japanese printout of the applicable regulations? It could save a lot of people a lot of money, or at elast increase their odds at the ward office crap shoot.
Would getting Permanent Resident status before April 2010 mean that you will not be forced to join the hoken scheme since you will never need to renew your visa? If so, sounds like now is the time to go for PR…
it’s a step in the right direction.
This could be a double edged sword for those people who plan to live and work in this country through retirement.
The good news: Finally being recognized as a real full time employee with all the benefits that shakai hoken entails. Not to mention being on equal par with their Japanese counterparts. (I used the term “equal” here, but individual cases may vary).
The bad news: Getting fired or “let go” because the company does not have the funds set aside or intends to pay the back fees due to prior negligence.
Mark my words here on this blog today….People will get let go for innumerable excuses once it becomes evident that the companies in question will have to pay years upon years of unremmited dues.
My advice: If you really want to stay here in Japan and NOT get fired, you must do the following: Join the Union, and in my OWN OPINION, sign up for Kokumin Nenkin (Pension) and Kokumin Kenko Hoken (Health Insurance). By doing this, you become a lot more retainable and easier to roll over to the Shakai Hoken system in the companies eyes since they won’t have to pay hand over fist just to keep you employed.
I find it quite naive that the labor union reps think that this new regulation will magically make employers start following the law regarding shakai hoken.
I agree 100% with Level3. This will not necessarily force companies to begin obeying the law. Foreigners will have to register as self-employed in the kokumin plans.
I hope they offer some sort of amnesty for those not yet enrolled (although I am).
I came here originally as an English teacher and was told explicitly by the company not to enroll (but to get the private health insurance conveniently offered by the company)
Then when I went to work at a JP firm, the only reason I was eventually enrolled is because my wife works in a law firm and made them.
But I think this is a good move in general. It will hopefully make employers more accountable and NJs more knowledgeable about their rights and responsibilities.
BTW, companies that use short term (1 yr) contracts have to enroll the contracted employee in their insurance scheme by law if the employee is there for longer than 3 years
Just for the record, only about 60% of Japanese citizens who are required to have kokumin nenkin are actually paying their dues. The number has been going down each year, and given the current economic situation will likely continue to go down.
What to do, what to do? I know, let’s make the foreigners pay. Sigh.
The DPJ say they will reform the system, but no one had better hold their breaths.
This will likely cause major problems. Many foreign nationals have private health insurance and don’t go near the national program.
The nenkin issue is also a big one — what about those of us who pay US social security instead of nenkin, as permitted by the Japan-US tax treaty?
@ Curzon –
If you have an exemption under the U.S.-Japan social security treaty, you can prove it by the form J/USA-6
From the website:
http://www.ssa.gov/international/Agreement_Pamphlets/japan.html
“To establish an exemption from compulsory coverage and taxes under the Japanese system, your employer must request a certificate of coverage (form USA/J 6) from the United States at this address:
Social Security Administration
Office of International Programs
P.O. Box 17741
Baltimore, Maryland 21235-7741
U.S.A. ”
Hopefully someone along the way gives a heads up to the bureaucracy about this issue.
So, if self-employed, “one-yen” business, one-man operation (all me), is exempt? I have private health insurance and spouse VISA.
The rule booklet they gave me a couple of weeks ago says there’s a maximum of two years backdated fees they can ask for. Is that changing or is the article misleading?
Mark:
Exempt from having to provide Shakai Hoken for yourself? Yes. However, you would still need to enroll in the Kokumin Kenko Hoken.
How do I make sure I have this insurance? Do all seishain have it automatically? It that the health insurance card I was given?
I have read the article twice now, but to be honest, I am still confused. What counts as a valid health insurance? Is kokumin kenkou the only valid system? Is it trying to say that no private system will be valid? Stated another way, is there a way to verify that one is properly covered? I suppose that I could take a day off and head down to immigrations, but would rather avoid that…
— Immigration is not the office to inquire at. Go down to your local town or city office and ask where the appropriate section is for your question (local Tax Office). See also HANDBOOK Ch 2 from pg 90.
I work for a company that pays 100% of my health insurance.
Given how little I use it, and how much they pay because of what my income is, it’s very poor value indeed.
Work visa can be sponsored only for full-timers.Full-timers must be enrolled in shakai hoken.Immigration should be logical.If they approve a work visa for a full-timer, why later they renew a visa with NHI when shakai hoken must be in apply? They must follow themselves and renew a work visa, which is for full-timers, with shakai hoken as for full-timers.In this case employers will not be able to cheat with 29.5 working hours and will have to enroll in shakai hoken sponsored by them foreign workers with work visa.But J-law makers as always did it in the wrong, at least in the current idea of future new rule.As the result, I am afraid foreign workers will have to pay 100% for NHI.
This is the Japanese finally getting smart about things. See my blog post today, if you want the whole 1,000 words.
National pension and national health insurance are required of all residents, regardless of work status. The Employer health and pension programs are of course, better. And we get left out of them.
But realistically, the people setting up their own rules are just cheating us. And probably the folks back in their home countries, too, if they have a social insurance treaty with Japan.
Hello folks
I do not work as a teacher so I guess I can offer a different point of view for consideration. Please bear with me and consider the following. I would welcome feedback as maybe there is something I am missing or have not considered.
This is a bad deal for alot of people, including expats at large foreign corporations, teachers at international schools (and the international schools themselves), and small business people like me.
Most of us in the category above have private insurance that is much cheaper and provides better coverage then the Japanese system. We also have no use for the pension.
As for me I have a small business and employ foreigners. I sponsor their visa and pay 100% of their private health insurance (I am not one of the bad Eikawa’s that tries to skirt the system). I have friends that teach at international schools that have school sponsored private health insurance that exceeds what the Japanese system provides. I have many friends working for large multi national corporations that have company provided plans that exceed the Japanese plan.
If this is 100 percent true with no exceptions this is a disaster for alot of people.
My take on this is as follows
The Japanese system is going broke and is headed for a meltdown due to the aging Japanese population. If you combine the 50% employee contribution and 50% company (institution) contribution (payroll taxes) for all expats/foreigners in Japan this will be a gigantic subsidy on the backs of foreigners, international companies, and certain institutions to help subsidize the Japanese program.
For alot of us in Japan this is a disaster and I believe this will severely impact Foreign Direct Investment into Japan.
My ALT dispatch company plays a smoke and mirrors game to keep us off of shakai hoken. On paper they have us working 29.5 hours a week, but in reality we are often at the schools for far more than that. We are only supposed to work 5.9 hours a day, but a lot of schools will have us there for eight hours. The ALTs are supposed to be free to use the difference of two hours as they please but I suspect a lot of schools will expect work in this time.
And if you are at work, I think you are working.
Sadly I see this as yet another reason for employers to avoid providing proper visas for their workers: doing so means they have to pay more money. I expect this will cause the number of illegal foreigner workers in Japan to rise, not fall.
“What to do, what to do? I know, let’s make the foreigners pay.”
Yep. The system is going broke so they’re trying to get money out of everyone they possibly can. Unfortunately that overrides what is otherwise a completely bone-headed move.
Johnny:Given how little I use it, and how much they pay because of what my income is, it’s very poor value indeed.
Yes, but if (God forbid) you were hit by a bus tomorrow and ended up in hospital for a year (which happened to my Japanese teacher) then it would suddenly look like very good value. That’s the point of medical insurance; it’s there when you need it.
Dear Hoofin
With a qualification (below), I have to take issue with your post….also can you let me know how I can find your blog? Would be interested in your full perspective.
My qualification is that I believe it is the responsibility for all employers to provide insurance for their employees. (I think that companies working employees 29.5 hours a week just to avoid shakai hoken is criminal as stated in by Let’s Talk and Behan is criminal).
On the other hand, I do not think anyone is being cheated by those that are not in the system (with the above qualification). In most cases where foreign capitilized firms or entities exist(at least in industry, multi-national corporations, and small businesses) a very large majority of employees are Japanese nationals (in my small company it is a 8~1 ratio). Legitimate businesses (corporations, small business like mine, etc) are heavily scrutinized and provide full benefits to employees. All of my Japanese employees (every single one) are fully enrolled at a significant cost to my employees and my business. I was specifically asked to prove I am providing insurance for my Japanese employees during a recent tax audit.
I do not plan to retire in Japan and neither do most expats, so enrolling in this program (health and pension) provides absolutely no value to us. I personally do not think I (or anyone in my situation) is cheating anyone by doing this as we are paying in for all of our Japanese employees and ensure that foreign employees are fully covered so as not to be a burden to Japan.
Japan cannot have it both ways – treat us as “guests” while we are paying corporate and personal income taxes and emplying Japanese nationals and then on top of that adding on additional tax burdens which are unnecessary and we will never use (in the case a pension).
I understand your point, and would like to read your blog (how do I find it?) but I do not believe it applies in all cases.
I also do not understand the “we get left out of them” statement (regarding Employer benefit packages). Can you please elaborate more on that? Or is the implication that companies should not be free to offer differing levels of benefits to employees. I just want to understand the rationale. Some of my friends working at large multi national corporations have great Employer packages..far exceeding what I am doing for my private insurance….I do not resent that or feel left out or feel I am deserving something from another comoany.
One can always argue “That is the way it is – follow the rules or get out” but in my case this could result in me (or someone in my situation) saying “OK – I am closing down” which would result in several high paying engineering jobs held by Japanese Nationals being lost and their (and my company’s) associated contributions into the system.
I believe there needs to be some level of flexibility as long as the person holding the visa will not be a burden on society.
I think Jake has a very good point. The unintended consequence (in addition to some loss of FDI) may also be an increase in illegal workers.
Anyway probably could be a good topic for debate. I would also be curious if anyone knows of other countries having the same requirements.
Cheers
>If you combine the 50% employee contribution and 50% company (institution) contribution (payroll taxes) for all expats/foreigners in Japan this will be a gigantic subsidy on the backs of foreigners, international companies, and certain institutions to help subsidize the Japanese program.
Umm…I call BS.
At the end of 2008, the foreign population of Japan was 1.74% of the
total population in Japan.
Let’s say, for sake of argument, that ALL of those foreigners are expats
(obviously not true as that number includes Special PRs etc.) that will
never see Japanese pension etc (also not strictly true.)
Further, for the sake of argument, that ALL of those foreigners are salary
men (and women) paying Kousei Nenkin (obviously not true.) Average salary
in 2008 for employees in Japan was JPY 461 MAN.
http://trendy.nikkeibp.co.jp/article/news/20081120/1021111/
Let’s further take this thought experiment and say, because ALL of the
foreigners are expats, that they are making 3 times the average or
JPY 1,383 MAN or JPY 115 MAN per month. That works out to a monthly
payment to Kousei Nenkin of JPY JPY 95,170 per month (half paid for by
the company, half by the employee.)
http://www.sia.go.jp/sodan/nenkin/hokenryo_ans02.htm
While JPY 95,170 per month per person is a fair amount, we are still only
talking about 1.74% of the population here. The ENTIRE foreign population
would be contributing JPY 21 Million per month. The goverment probably
wastes that much in toilet paper.
Anyone that claims that this is discrimination against foreigners or blaming
the government for trying to fill the deficient holes by making foreigners
foot the bills (bills that are owed by ALL Japanese citizens, btw) is promoting
paranoia and rabble rousing!
There are a LOT of shady employers out there. Go after them for exploiting
foreign workers! Blaming the government for implementing these checks to
ensure that everyone is carrying their weight is misdirected. Blame the
government for not cracking down on shady employers!
Chuckers
I do not think I claimed discrimination….just claiming that the government is looking for ALL sources of income to increase revenue (as most governments in the world are doing) – perhaps my point was lost or misdirected…Also I do think FORCING foreign residents into the program is subsidizing the Japanese system. Why else would they make this a condition of obtaining a visa other than trying to increase revenue.
I do not think ALL foreigners should be FORCED into the program. Do you?
If you do not think the J Govt is aggressively trying to obtain all possible revenue (as all governments are doing) join me for a tax audit. Also my accountant (Japanese) was pretty straight up in telling me that I am a foreign owned business and thus will be more heavily scrutinized.
Not trying to promote paranoia or rabble rousing….trying to argue against being forced into this system
Doug, “Most of us in the category above have private insurance that is much cheaper and provides better coverage then the Japanese system.”
If an employer fails to insure his/her employee with kenko hoken, s/he shall be punished by 6 month in prison and a fine of 500,000 yen.
I doubt a private insurance can be better.
Kenko hoken covers;
(1) 70% of medical fees,
(2) if medical payments go beyond 80,000 yen a month, a refund of 99% of the amount beyond 80,000 yen.
(3) if an insured cannot work more than 3 days due to illness or injury, 60% of salary, tax free, during the absence.
(4) if an insured has dependent family, 70% of their medical fees with no additional premium.
(5) if an insured or his/her dependent family die, 50,000 yen
(6) 350,000 yen, if an insured or his/her dependent family have a new baby, (or if pregnancy ends with death of a fetus.)
(Kokumin kenko hoken does not cover (3) or dependent family.)
Is your private insurance that good?
You claimed that this would be a gigantic subsidy on the backs of foreigners
implying that foreigners were going to be supporting a good chunk of the old folk
in Japan with their pensions payments/health care fees. I was pointing
out that 1.74% of the total populations wasn’t going to make much of a dent
even supposing that small sliver of population was making 3 times the average
salary.
>I do not think ALL foreigners should be FORCED into the program. Do you?
Why not? It is the law of the land, is it not?
[nastily preachy citation of “Do as Romans” axiom deleted]
Most countries would require payments of taxes and pension/social security
fees.
Those who think they are getting the short end of the pension stick should
either lobby their home countries for an equalisation treaty or make other
arrangements. Those unhappy with health care insurance should find ways
to supplement it or get a government approved replacement.
Please provide a valid reason why one group of people should be allowed to
avoid paying what everyone else is required to pay.
“While JPY 95,170 per month per person is a fair amount, we are still only
talking about 1.74% of the population here. The ENTIRE foreign population
would be contributing JPY 21 Million per month”
Er… you math is off.
The population of Japan is about 128 million. 1.74% of that is about 2.2 million
If this amount of people were paying 95 000 yen per month, that would make about 21 000 000 000.
Ah, I see now. You lost a factor 1000 somewhere.
I have a question.maybe someone can answer this.
Do we also have to join the STATE PENSION SCHEME? If so why would a 50 (for example) year old person who lives in japan untill retirement want to pay until they reach 65,then retire but be unable to claim as they haven’t achieved the full 25 years contributions?
From:
http://www.sia.go.jp/sodan/nenkin/kanyu_ans01.htm#qa0501-q508
Those over the age of 20 and below 60 are required to join Komin Nenkin,
regardless of whether they have Japanese citizenship or not.
However, those that will obviously not be able to make the required
payments in order to receive an old age pension may, with the approval
of the Social Insurance Agency, be able to exempt themselves. Contact
your local SIA office at your local City/Ward office.
> If this amount of people were paying 95 000 yen per month, that would make about 21 000 000 000.
> Ah, I see now. You lost a factor 1000 somewhere.
Ha, my math is off too, missing one zero here.
That would be actually 210 000 000 000 yen per month.
But of course, as you mentioned, the assumptions were not realistic to begin with.
@Doug:
I blog on WordPress under the name Hoofin (so hoofin.wordpress.com) I am not here to promote my own site, but I give my whole explanation over there.
If I understand how Debito has it set up, when you see someone’s name that’s clickable (colorized), it takes you to their site.
I realize any number of people disagree, but that’s what debate is about.
Two things:
1) It isn’t clear if the private insurers operating for foreigners pay into the fixed costs to provide the health system. They only cover the bill the hospital or clinic hands you.
That bill may already be well subsidized as it is by the overall program. Who is paying the fixed costs to set up the system?
What if it was decided by the Japanese that these fixed costs are subsidized by the progressive nature of the contribution “tax”? Higher earners pay more and maybe they are footing the fixed costs. A puzzle inside a puzzle. I went to the hospital for $300 USD (list price) last year. Insurance covered, but I can’t believe for all the service I got, it just cost $300.
2) Social insurance programs, like national pensions, work only if every who should be paying in does so.
It involves what is called the time value of money. If a person is allowed to skip years by working in a treaty partner that lets them skip, then the people back home are going to be the ones usually to have to make up the difference if the expat here does not have enough dough at the end of their career. By paying in, the expat is making the same money sacrifice as everyone in the cohort, and assuring the viability of the system longer term.
I respect what you are saying, but I don’t like the idea that non-enforcement by the Japanese somehow opens up a debate on libertarian philosophies of government. Yes, great, if everyone or a majority decides they don’t want the National Pension scheme anymore. But voting with their feet, so to speak, is not a real vote. It’s cheating.
HO, you have shot yourself in the foot.
The problem is that, as you state..
If an employer fails to insure his/her employee with kenko hoken, s/he shall be punished by 6 month in prison and a fine of 500,000 yen.
This is routinely ignored, or circumvented by employers of foreign workers in Japan – and the authorities routinely ignore it.
Just claiming “but the rule is” is just out of touch with reality.
>Er… you math is off.
Sorry about that. I must have meant JPY 21 Million MAN. Either I left it off
or it got edited out.
Either way, the point remains. JPY 210 OKU is a drop in the bucket compared to
what the Japanese government should be collecting from Tarou Q Kokumin.
Chuckers, your math IS way off, unless you’re using a different definition of “million”
You have some good points and seem to be trying to take a balanced look, HOWEVER, you neglect a major point that supports the “gaijin are getting soaked by the government” case.
Yes, gaijin are 1.74% of the poulation, I get that, but how many are pension-drawing retirees?
Not many. I bet I wouldn’t be going out a limb that the proportion of gaijin retirees is FAR below 1.74% of retirees, I’d bet it isn’t even 0.0174%. (unless we’re counting Special residents)
Additionally, recent pension treaty agreements mean that the J government is going to have to start paying out and honoring international pension obligations in the next 10-20 years, whereas they could previously just keep all pension payments beyond 3 years with zero obligation to people who left Japan, those payments now count toward a pension in another country (Britain, the USA, etc.) They are motivated to make sure the system is getting as much money as possible. Though not motivated enough to piss off voters. So, target non-voters, namely, gaijin.
I’d assume that the proportion of gaijin who are in the labor force is higher than the proportion of population which is gaijin(1.74%). And since gaijin (unlike native Japanese) are easy to target/control/threaten with laws, can’t vote, aren’t allowed to live on the dole, and must be employed or eventually lose their visa status, gaijin are a good target for getting funds because they are (usually) employed, while those that aren’t employed can be deported (before they start presenting a burden to the system they’ve been paying taxes into for years, but that’s another issue) What is the gaijin unemployment rate, anyway? Or do they even keep track of anything except the alleged “gaijin crime rate”?
Add in there is no real punishment for Japanese who don’t pay in. You can’t deport a citizen. And it bceomes clear how gaijin are a tempting target for all kinds of new government efforts to “improve efficiency” or “fight terrorism” or whatever, as long as you don’t call it “justify our xenophobia”.
Hello
H.O.
Thanks for your information. I am well aware of the Japanese system and I would consider my coverage equal to the Japanese one and for me personally (because of my personal situation) better. A few years back one of my children had an operation in Japan and our insurance covered 100% including full coverage for the private room. Also I have friends on the Japanese system (that are American) and they have had issues using the coverage overseas. The coverage I have is less expensive and provides equivalent or better coverage for me. If the Japanese system was a better deal overall I would enroll but it is not. I am not saying whether your system is good or bad – just relating to my (and several other foreigners I know) situation. Also I am not married to a Japanese so that is a factor as well.
H.O. – can you please site me the specific law? This would be good information – thank you
Chuckers – if you took what I said literally you are right – so perhaps different wording would be in order, however I agree with O.T. I think you underestimated the revenue – perhaps you intend to stay in Japan for life. If you do you should join and it might be a good deal for you….I do not so it is not a good deal for me.
Also Chuckers I am not avoiding paying anything – My business is paying for all of my Japanese employees and I am paying for my own insurance (I am still paying) which is easier to use overseas, gives me a bit of a cost savings which helps my business survive in tough economic times. I would rather find a way to save costs for my self and other foreign employees, which prevents me from laying someone off, which keeps the person I do not lay off paying taxes and paying into the system, which helps everyone else in the system. I guess I would have to turn it around and say give me a good reason to force me into this system.
Chuckers – I do have health insurance – can you please let me know what a “government approved replacement” is? I have not been able to find one. There are alot of us that would be grateful for that kind of information and some pretty “connected” folks have been looking for that. Presently supplemental insurance that works well overseas is pretty much equivalent to paying twice – have looked into that – but that is a good idea.
John – this is one of the main issues – being forced to join also requires enrollment in the pension (from what I know).
On a side note there is a large organization in Japan looking into this issue and estimating costs and even considering a legal challenge to this issue (I say considering because it sounds like they will not take that step). The financial impacts are pretty big.
I do not disagree that insurance is a good thing, nor do I think companies should not insure employees however I do believe in choice – especially for people in my situation who do not intend to stay in Japan permanently.
@Doug,
I don’t mean to sound like I am baiting you. But this has left me confused.
1) If you are doing well as a proprietor here in Japan, then why would the 14,660 yen a month pension payment break you? That’s 175,920 yen a year. And you get to deduct it from both national tax and residents tax. So if you are in the combined 30% bracket, the national government is picking back up 30% of the cost to you anyway. You pay 123,144 yen net.
2) Likewise, National Health insurance premiums are deductible. But a private company insurance that really isn’t licensed to operate in Japan isn’t charging deductible premiums. “Private” in the sense it is not a Japanese health insurer. Are the premiums really that much lower than the public program with the tax write-off? That’s hard to believe.
I know that many employer cooperatives here make like they are separate from the national program. But the national government highly regulates these. And all health services must be not-for-profit as a rule. So what is the program you are using doing? How do they do it?
3) All your employees (the high paid Japanese engineers) are required to be in both the pension and health insurance. Since they are high paid, they would rather be in the employer system, right? It would net to less taxes for both you and them. Unless they don’t care because they’re skirting payments or made other arrangements, too. Then that’s a situation, right?
If they have to pay, say 50,000 yen premiums out of pocket themselves, aren’t they just as well off taking a 25,000 yen salary cut and having you pay half and they pay half? They pay 25,000 back to you (don’t get taxed on it), and only have to pay 25,000 (tax deductible) for the premium.
What am I missing?
Got PR in 2004, since then f…ck NHI which is nothing, covers almost nothing either and Japanese themselves have thousands of insurance to cover them up in case of hospitality, cancer, etc. Japanese cannot afford to pay and many do not have so the best is to force again gaijins to cover old and not paying Japanese. Someone wrote above about paying back 1mln yen. I would prefer leave (1 year rent in Europe for 100m2) than pay for nothing to someone who treats you already like a criminal
@Chuckers
There is a special exemption of 1/3 or 2/3 of the nenkin payments for low-income individuals. I don’t know if there’s a full waiver but I imagine in some situations there is. When I have had to pay it by coupon, I notice you are given two years from the due date to get it in. So there is a lot of flexibility.
@Doug
I am still trying to figure out how a totally private insurer gets away with it in Japan unless the regulators look the other way. All medical care is provided on a nonprofit basis. Even when companies began to set up nurse dispatch services in the 1990’s, the dispatch companies themselves had to be owned by nurses (so no profit maker outside of medicine was being let in).
It really sounds like the company you use is cherry picking. Essentially, you are uninsured by Japanese rules, even though you are supposed to be. But you have a side agreement with someone else to pay your bill if you use the medical system.
If the prices in the system are fixed, regulated, and quotes only meant for those who are already members of government recognized insurance programs, then it sounds like the company is free riding as well. Cherry picking, and free riding.
How is that libertarian taking care of oneself?
The prices are really meant for people who are paying the other cost through the arrangements in the Medical Care Law (fixed premiums based on income).
Frankly, I am surprised the Japanese haven’t shut down that insurer long ago. It sounds like something illegal.
Hoofin – no worries about your post – it does not seem to be baiting to me but seems to be legitimate questions. Also I have learned a few things I did not know before during this debate and tend to learn more when challenged
That said
1. My pension payment would far exceed 14,660 Yen per month based on present salary
2. Even with the deductable insurance premium it is still less expensive and also there is the issue of using coverage overseas – I would be at the top level of what I need to pay for insurance which would be over 113,000/month (company + personal contribution)
3. The program I personally use is a private insurance company that is geared to providing insurance to expats – I use a broker in Tokyo – I am not using the biggest one that most of us are familiar with (the one that begins with “I”). The insurance I use is widely known and accepted in the U.S. without up front payment.
4. My Japanese employees (actually driving force is their wives) all WANT to be in the Japanese system. I actually asked them if they would be interested in other options. My accountant advised against it and my employees are not at all interested (all are married with at least 2 children). Financially there are some of them would come out ahead in the short term, however it is not a good long term option for them
a) I am not sure it is legal for me not to put them into the National system (see post by H.O.)
b) If we interrupt their coverage it is a bad deal (I actually had to help out and pay “back” taxes for 2 of them as 2 of them worked for an unscrupulous company that was not paying into the system (unknown to the 2 employees – yes this happens to Japanese too – not only foreigners).
It is a very bad deal to interrupt the program once you get on.
Because of the timing of this, this happens to be a very important issue for me at this time so thanks for the questions and comments.
Level3:
>aren’t allowed to live on the dole
Foreigners are “allowed to live on the dole” provided they have been paying
into unemployment insurance. A few years ago, foreigners were “allowed” to
opt out of Kouyou Hoken but that legal “loophole” has been closed and now
non-shady businesses are required to enroll ALL staff in it (there might be
some exceptions due to company size. Not that up on the finer legal points
of it.)
As you point out, this is contigent on having a valid visa. But that applies
to probably just about any country in the world that has such a system.
Doug:
>which keeps the person I do not lay off paying taxes and paying into the system,
Your employees maybe paying into the tax system but you have also claimed that
your foreign staff are NOT paying into the health insurance system. It may look
like it goes to the same place (government) but they are (mis)manageged
seperately.
And come to that, you claim that you are paying the insurance for your Japanese
staff but not your foreign staff. Why are you discriminating against the
Japanese by making them pay higher insurance rates? Wouldn’t you have a greater
cost inscentive to place ALL of your staff under the same program?
I am not trying to flame you on this matter but I see this as an equality issue.
I have met numerous Japanese that have told me they envy me because they are
convinced that because of my foreignness, I am exempt from taxes/health insurance
payments/nenkin payments. I always have to correct them and tell them I am
paying into the same systems they are. That mind set won’t change unless there
is education and actual work towards worker equity.
As for goverment approved options, have you looked into some of the kumi-ai?
Many of them have fallen on hard times but there are still a few out there.
Do I understand that you manage an IT firm (sort of implied by a previous post
but I may have mis-read it.) Have you looked into the following:
http://www.its-kenpo.or.jp/
It is based in the Kanto region and is for IT related companies. They provide
cheaper premiums than straight out of the ward office government insurance
program as well as slightly better benefits.
I do understand the point of people saying “why should I pay into a pension
scheme when I won’t see any benefit?” But I hear that in my home country as
well.
I have a friend that paid 3 years into the Japanese system but hasn’t continued
it for the last 10 years. He has maybe 30 years to go before retirement
but I worry for his future, especially when he isn’t sure what he is going to
do going forward. Inertia has set in and for the moment, he is stuck in
Japan. If he makes it to retirement, he won’t have a pension here. If he
is going to go home, he had better do it quick and find a job that would
allow him to make up his “lost” time in Japan (in this global economy?)
If he had paid into the Japanese system for the past 10 years, he wouldn’t
have as much to make up and would still be able to collect some of it.
Japan does make pension payments to foreign addresses (as does the US as
well as many other countries.)
Hello all,
As far as private insurance goes, I use it because I can go to the foreign clinics here in Tokyo that don’t accept NHI. I’m sure there are a lot of people that feel the same way I do about this. Any thoughts?
@Doug:
The National Pension (so-called “Kokumin Nenkin”) is 14,660 yen a month. It is the same price for everyone, and the ward or prefecture sends you the coupon book.
The payment is a deduction to taxes. At least as what the English translations from the tax office say.
The National Health Insurance (“Kokumin Kenko Hoken”) is based on prior year’s wages. It looks also like the schedule is based on resident’s tax. So Starting June 2009, the premium is based on reported income for 2008.
The premium (tax, really!) is figured on the same sliding scale as taxes, so people who make more pay more. The added money is obviously going to cover people who are making less. But there is a cap to that payment. I think in Shibuya Ward it’s 69,000 yen a month in 2009.
I know for the government health program, it is regardless if you have a company or not. So if you walk in and enroll, they aren’t going to ask about your employer’s system. They are going to go over to that computer where they have the names of all the registered foreigners in the ward, then somewhere along the line get the tax information from Otemachi. Later, send you the coupon book.
A lot of first-year [NJ]– kids mostly — don’t realize that the Japanese will base the first year on their prior year’s income in Japan (which would be zero of course). So the first year premium is next to nothing (maybe 4000 yen a month). Even the second year would probably still be low, unless they show up in the first few months of the year.
Your employees’ wives know the score: the Employer plans are much better, because they can go into the government-regulated cooperatives. But the prices at the payment desk are the same. It’s just that the premiums get to be calculated differently, and in a way that usually costs less.
If private companies are coming in and offering even lower premiums, but they don’t sell to Japanese because what they’re doing is really illegal, then I don’t know what to say.
I guess there are these scams that go on all the time in life, and they grow and die based what people get away with. I think the vaunted NOVA English school was running a non-government private insurer for its employees before it went bankrupt in 2007. When the foreign workers went to collect social insurances in their local offices, they found they were liable for 2 years’ of back insurance premiums—even though they had had deductions out of their NOVA pay packet.
To me, it’s funny here that almost everyone (NJ) gets word of the “ways around the system”. But when the government goes to lower the boom about a rule, everyone pretends they were never told and what an outrage it all is.
@Hoofin
Not sure why I was being responded to in your last response
but you are correct that it is possible to get a reduction in
the amount you have to pay into Kokumin Nenkin if you are in
the low income bracket. The law was recently changed to break
it down in to 1/4, 1/2, 3/4, and full exemption, based on income.
Details here:
http://www.sia.go.jp/seido/gozonji/gozonji02.htm
You have to be pretty much living hand to mouth in order to get
the full exemption. A 3/4 exemption is fairly possible for a family
of 4 making just under the average salary.
I have been working in Japan for about 10 years now,
and I’ve always been enrolled in Kouyou Hoken ONLY.
Well, 2 years ago I joined the Kenkou Hoken as well,
so that fact will satisfy the new April 2010 regulation.
My Kenjou Hoken card admits I am the householder,
supporting 3 dependents (Japanese wife + 2 children)
but the main point here is – I’ve never paid into Nenkin.
The Kouyou Hoken only costs me about 1200 yen a month.
Why do people think Kouyou Hoken and Nenkin are a set?
OK, here’s my problem, I hope you have some good advice:
My current employer has 20 employees, yet he refuses to
process the Kouyou Hoken card which I gave when I joined.
He mistakenly assumes Kouyou Hoken and Nenkin are a set,
and because he wants to continue to refuse the Nenkin system,
he thinks turning in my Kouyou Hoken card will cause him trouble.
* Kouyou Hoken has saved me before, so I demand to be enrolled.
Once, when I needed it, Kouyou Hoken kindly gave me 36man yen.
So, do you have any links in Japanese which will help him realize
1) one can be enrolled in Kouyou Hoken WITHOUT paying Nenkin
evidenced by my 10 years’ experience at many Japanese firms
2) he is legally required to turn in my Kouyou Hoken card, which
means 1200 yen will be subtracted from my salary, as always.
I don’t want to complain directly to the Kousei Roudousho, since
that might cause him to decide to fire me, I wouldn’t want that. (!)
I simply want him to turn in my Kouyou Hoken card, as every other
company I have worked for in the past has, so that I am protected.
Josh
Somewhere was written here that J officials said that if foreign clinics accepted NHI they would have to take J people and shorten their visits, so now I know why in J clinics you have 3min visit, get some pills and go home. I only use foreign clinic, first of all Tokyo British in Ebisu where I often spend 30min or longer with doctor. This is great service where someone try to help you and really investigate. What they cannot do there they will recommend “real” hospital and doctors to go. My J wigfe have expat insurance too and go to foreign clinics. At least nobody refuse her due to overbooking as yesterday one of my family pregnant member was refused in J Hospital during the day and asked to go elsewhere. Well…overbooked and she was bleeding. Still wants to pay to dying system? Better leave
Steve,
Forgive me for being pedantic, but surely mean “koyou hoken” (雇用保険 employment insurance).
Hi Mumei,
Thanks for the correction, you’re right, I meant to write Koyou Hoken.
So – does anyone have any thoughts on the subject of Koyou Hoken?
Has anyone else been enrolled in Koyou without ever joining Nenkin?
Thanks in advance for any related advice you might be able to share.
Sincerely,
Steve
He may have got the spelling from me. I hate romaji because I always misspell words.
Steve, here are a few links:
http://www.koyouhoken.com/kp_koyoutoha.htm
http://www.koyouhoken.com/kp_o_law.htm
It basically says that it is required. The second URL contains the pertinent law.
Section 8 covers penalties for failure to submit information to the authorities
which includes jail time up to 6 months and fines up to JPY 300 000.
N.B. I didn’t read the law all the way through nor am I a lawyer. Also, I don’t
think the site is a government sponsored site but I don’t really have any reason
to doubt that the information is accurate.
@AWK,
So, what will happen to the clinics like the British Clinic, and the American Clinic once everyone has to be on NHI? I suppose that some people will put buy expat health insurance on top of NHI, but that seems very expensive to me.
I imagine with the loss of so many expats over the last year, and everyone having to have NHI in April 2010, the expat doctors are quite worried.
On a side note, I have been very dissapointed in Interglobal’s understanding of this situation. Basically, they are refusing to tell customers that they will need to change to NHI from next year. I understand they are going to lose a lot of business, but people could be in a lot of trouble if they just blindly sign up for another year of their health care.
Um Hoofin,
Maybe you missed this above. There is a link to the SIA homepage.
Kosei nenkin (kokumin nenkin) is paid based on a sliding scale with the top monthly payment of 47,585 JPY. Payable by the employee. If the amount you are paying is 14,000 JPY then either your employer is under-reporting your income or you are earning in the neighborhood of 190,000 a month.
The average annual household in come in Tokyo was in the 7 million range. Can’t find the link right now. Assuming that is being earned by a single breadwinner, the average person pays in excess of 40,000 a month, while the employer is on the hook for a similar amount. At least there is a cap.
I think the whole reason people/businesses try to avoid paying this is because it is substantial.
I look forward to reading your blog.
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