Friday, September 30, 2011

Health Insurance Guide #3: Employee Health Insurance

Welcome to part 3 of AJ's Japanese health insurance extravaganza! Today we will be covering the second part of the Japanese public health system, the Employee Health Insurance (EHI) scheme.

What is EHI?
Employee Health Insurance does not refer to a single system so much as it does as set of semi-public/non-profit entities operating under a single framework. The main components of the system are as follows:
  • The All-Japan Health Insurance Association (全国健康保険協会 zenkoku kenko hoken kyokai) -- A relatively new government designated non-profit that has taken over the responsibilities of the old Social Insurance Agency (社会保険庁 shakai hoken cho). It is generally used by organizations that are too big to pass their employees off to National Health Insurance and too small to union managed insurance.
  • Mutual Aid Societies (共済 kyosai) -- Government sponsored or non-profit entities for designated professions such as civil servants, public school teachers, police officers, etc.
  • Union Managed Insurance (組合管掌健康保険 kumiai kansho kenko hoken) -- Insurance plans managed by large corporate unions. Sometimes these unions can cover specific industries (IT workers, etc) while other times they are exclusive to very large companies (NTT, Panasonic, etc). Membership depends on union rules, company policy, and employment status. 
The Social Insurance Agency no longer exists, having been shut down after a series of mismanagement scandels, although many websites still use the phrase "social insurance" (社会保険 shakai hoken) to differentiate from other public insurance schemes. The term "various types of social insurance" (各種社会保険 kakushu shakai hoken) often pops up on job postings and it usually refers to health insurance in addition to employment insurance, worker's compensation insurance, and so on. 

Regardless of what institution acts as your insurance provider, benefits are very much the same as NHI. EHI covers health, dental, specialists, and just about every approved treatment so long as its non-elective. Special health check up vouchers are available for those in their mid 40s but most basic check ups are covered by school or work.

Also, like NHI, pregnancies are not covered directly but rather in the form of a 420,000yen lump sum reimbursement.

One important benefit is the ability to recoup 2/3rds of your salary after 3 consecutive, non-paid sick days. Naturally, you need to submit proof from work and a doctor that you are not at work and not earning a wage for your sick leave. Consult your work or insurance institution regarding how to claim your benefits.

As we have covered in the previous section, companies and organizations are obliged to enroll their employees in an EHI scheme if they have 5 or more full time employees and/or you work at least 2/3rds the hours of a regular employee.

To avoid the extra costs associated with EHI, many dispatch firms and ALT companies classify their employees as contractors or state that mandatory work hours are just below the 2/3rds limit. Therefore, even if you work for a big company, you may not be covered by EHI insurance. 

EHI is also available to immediate family members including spouses and children as well as grandparents directly related to the primary insuree (i.e. not your wife's parents etc) so long as they are under 75 and live in the same household. Children or spouses making over 1,300,000 yen a year (1,800,000 if disabled) must enroll in their own insurance scheme. 

EHI rates differ by institution but the rates are generally a fixed portion of your pre-tax salary. For instance, the All-Japan Health Insurance Association's rates are set by individual prefectures, although in theory they don't differ too widely. You can look at all the rates by prefecture and salary level here.  Costs are shouldered equally between you and your employer so you are technically only paying half of the full fee.

The right side of the table covers insurance rates which is broken down into salary (標準報酬 hyojun hoshu) by month (月額) and day (日額). The two rates represent regular insurance rates (the lower percentage) and insurance rates with nursing insurance (only for those 40 and over). There may be small adjustments for children and spouses depending on your insurer. Contact your work place's HR department or insurance group for exact rates. 

Out-of-Pocket Costs
Like NHI, all procedures are billed with the "insurance point" system and insurees must shoulder 30 percent of all out of pocket costs. Children 6 and under only need to cover 20 percent of costs. 

Also, like NHI, there is a maximum cap on out of pocket expenditures of 81,000 yen + (Total Medical Bill - 267,000) x 1% or 44,000 if you receive multiple procedures in a short period of time. This applies if you earn less than 530,000 yen a month. Those who fall in the high earner category have their maximum expenditure cap calculated 150,000 + (Total Medical bill - 500,000) x 1% with a recurring treatment cap of 83,400. Low income earners have a fixed 35,000 yen cap and a 24,600 yen cap of recurring treatments.See the NHI article for more details.

Changing Jobs and Unemployment
Since EHI is directly linked to your employment, quitting or being otherwise terminated means that you have to change insurance. 

If you quit, are fired, or otherwise rendered unemployed, then you have two available options: the first is continuing your coverage for up to two years. The other option is to join the NHI. 

In the cast of the All-Japan Health Insurance Association, you must pay for both your own portion of the premium as well as the portion covered by your work. If you opt to go to the NHI system, your health insurance organization will send you a card in the mail (usually called a 被保険者資格喪失届 hihoken-sha shikaku hoshitsu todoke) within 20 days of your termination. You can take this to the city hall and use it as proof of unemployment to apply for NHI or bring it to your new work place in the event you are enrolled in a different insurance group. 

The ability to continue you insurance while not working may differ between insurance groups so make sure to consult your EHI provider in the event that you become unemployed.

Well that about covers the important points of the EHI system. Check back to AccessJ soon as we look at optional medical treatment insurance.

Other posts in this series

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