[Major Health Insurance Premium Reform] 2% of Workplace Insured Pay 50,000 Won More Monthly

Standard for Health Insurance Premium Payment on Non-Salary Income for Conservatives
Strengthened from 34 Million Won to Over 20 Million Won

On the 29th, as the rainy season continues, office workers are heading to work holding umbrellas near City Hall Station in Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kim Young-won] Office worker A receives a monthly salary of 6 million won and earns 24 million won annually from interest and dividend income, yet only paid 210,000 won in health insurance premiums based on his salary. This was because the threshold for additional insurance premiums on income outside of wages for employed subscribers was 34 million won. Going forward, B will have to pay an additional 23,000 won in premiums on income outside of wages.

With the revision of the health insurance premium system, the payment threshold for insurance premiums on income outside of wages such as interest and dividends for employed subscribers has been lowered from exceeding 34 million won to exceeding 20 million won. This revision was made considering the fairness issue raised regarding the income criteria outside of wages between employed subscribers and regional subscribers. Unlike employed subscribers, regional subscribers pay health insurance premiums on all income.

Health insurance premiums for employed subscribers are divided into wage-based monthly premiums and income-based monthly premiums. The wage-based health insurance premium is calculated by multiplying the monthly salary by the annually determined health insurance premium rate, with the subscriber and employer each paying half. The insurance premium on income outside of wages is imposed only on the amount exceeding the annual income threshold.

According to the revision, 450,000 employed subscribers with interest and dividend income exceeding 20 million won will see their monthly premiums increase from 338,000 won to 389,000 won, an average increase of 51,000 won. This means premiums will increase for about 2% of employed subscribers. The remaining 98% of employed subscribers will see no change in their premiums.

The insurance premium on income outside of wages is calculated only on the amount exceeding 20 million won annually after deducting 20 million won. The amount exceeding 20 million won is divided by 12 months and multiplied by this year’s health insurance premium rate of 6.99% to determine the monthly premium on income outside of wages.

Even if income outside of wages occurs, if it is 20 million won or less, no additional health insurance premium is paid. Office worker B, who earns 3 million won monthly in salary and an additional 2 million won annually from a side business, is not subject to health insurance premium payment on the 2 million won side income. B only needs to pay the employed subscriber’s share of 105,000 won monthly, which is half of 6.99% multiplied by the 3 million won salary, as before.

Previously, in the first phase of the health insurance premium system reform on July 2018, the threshold for income outside of wages was strengthened from exceeding 72 million won annually to exceeding 34 million won. At that time, health insurance premiums increased by an average of 129,000 won monthly for 150,000 households.