Health Insurance Coverage for Foreign Residents in Korea

by Gerald Staruiala, 26/03/2008


Health Insurance in Korea is an important issue: ask Bill Kapoun’s parents. The issues surrounding healthcare are obfuscated by misinformation, some shady employers and the general inability for Expatriates in Korea to find their way through the maze created by language barriers and overlapping regulations of multiple Ministries.

National Health Insurance… A Brief History
The efforts to introduce a social security system in Korea went back to the early 1960s with the legislation of various laws related to social security and protection. Especially, significant progresses in the field were made during the 1970s when the government initiated the medical insurance programs. In 1977, the medical insurance program for employees of private companies was introduced. In 1979, another similar insurance program was implemented for public servants and private school employees. It, however, was not until 1988 that the medical insurance program was extended to all the self-employed in rural areas, and not until 1989 that the program for all the self-employed in urban areas was implemented.

The National Health Insurance Program
The NHI program of Korea covers the whole population as a compulsory social insurance system. Its main sources of finance are contributions from the insured and government subsidy. The benefit package consists of benefits in-kind and benefits in-cash on the whole. When people get health care services through the NHI program, co-payments are applied according to types of health care institutions.  The application of the Program to Foreigners working in Korea is governed by the same laws that govern Korean workers: there is no difference in the eyes of the Law between Koreans and Foreigners on the issue of the National Health Insurance Program.

The Legal Structure and Important Articles
There are two Acts that pertain to Health Insurance: the Health Insurance Act and the Labor Act.  The Labor Act is subservient to the Health Insurance Act and simply mentions that the Employer must pay for 50% of the Health Insurance and that Employees who work less than 60 hours a month are not required to have Health Insurance.  The Health Insurance Act stipulates that all employees who work 80 Hours or more must participate in a Health Insurance Plan and that any company that employs more than 5 Foreign workers must enroll the Foreign Workers in a Health Insurance program.

There is a gap of 20 hours between the Labor Act and the Health Insurance Act; the Health Insurance Act is the guideline to follow.  The Health Insurance Act does not state what type of Health Insurance Coverage the Employee should receive: that is determined by the contract between the Employer and Employee.  Subsequently, many employees have been enrolled into Private Insurance programs.  Usually the Private Insurance programs are simple accident insurance which leaves Foreign Employees underinsured and with limited coverage.

An additional issue that has come up as of late is that many Korean Employers will not register the foreign worker as an employee, but rather as an independent contractor.  An independent contractor must provide their own health insurance.  The disadvantage the employee suffers it that the employee wins the action they are responsible for 50% of the contributions since the starting date of their employment even though they were not registered.  The good news is that all health care costs since the start of the employment date can be reimbursed due to the fact that the coverage is retroactively.

In the case that a Foreign worker decides to enroll them selves in the program they must pay the full contribution rate.  In addition, once they are enrolled they cannot opt out of the program.  For D-8 VISA holders they have a different contribution rate that follows the standard rate for Self-Employed Koreans.  At the time of your enrollment you should verify the rates. Please note that the rates are based upon Wages and not Income.  Income is the total monies that you receive, while Wages are the amount of money you receive on a regular basis as a result of your contractual agreement. 

What Is Covered and How Much is Covered?
Patients are given almost unconstrained freedom in choosing providers and can choose both western and oriental medicine. The third-party payment system has been adopted for reimbursing health care institutions for their medical services and providers are paid mainly by fee-for-service. With regards to administration of the NHI program, NHIC, the unique insurer, is responsible for operating the program, the Health Insurance Review Agency (HIRA) is in charge of reviewing claims of providers, and the Ministry of Health and Welfare supervises the operation of the NHI program as a whole.  You have the freedom to choose your Health Care Provider.  An Employer cannot dictate which Health Care Provider you use and if the Employer does so then it is time to review your Health Insurance Plan.  If the Employer is insisting that you go to specific Health Care Providers you are not enrolled in the National Health Insurance Program and you have further limitations that you should be made aware of.

Foreigners and the NHI Program
Foreigners can be covered with the NHI program on the condition that they satisfy some requirements for their coverage. As of 2005, 215,198 foreigners were covered by the NHI program.  Many Employers are either not aware of the change in the ACT or simply choose to ignore it.  The NHI has become more stringent in the enforcement of the NHI Act and is actively reviewing companies that hire foreigners to ensure the law is followed.

Insurance Benefits
The insurance benefits are applied equally to foreigners. When the insured persons or the dependents get health care services, they share only some portion of the costs as co-payment for the services covered.

Take Care and Verify Your Healthcare Plan
If you are on a Health Insurance program you must receive a description of the program and documentation (a card or passbook) that proves you are registered.  If you are on the National Health Insurance Program you will receive a booklet.  If you do not receive anything from your employer, you are not insured.  If your employer will not enroll you into a program you can apply to the Government program yourself and the minimum payment will be 60,000 KRW per month with a maximum of 4.77% of your monthly salary.  You are either insured or not: your employer cannot guarantee payment of your health care expenses.

For more information and additional details go to http://www.korea4expats.com/article-how-you-get-medical-coverage.html  - then scroll to the bottom of the page and click on the other sections dealing with medical coverage in Korea.

Photo from www.mcgill.ca

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