[Asia Economy Reporter Byeon Seon-jin] Next year, the maximum monthly health insurance premium for workplace subscribers is expected to increase by about 260,000 KRW compared to this year, reaching approximately 4 million KRW. This applies to employees earning more than 10 million KRW per month or those earning an additional 50 million KRW per month from side incomes such as interest, dividends, or rental income.
According to the Ministry of Health and Welfare's recently announced amendment to the "Notice on the Upper and Lower Limits of Monthly Health Insurance Premiums," which will apply from January to December 2023, the upper limit of the monthly wage-based insurance premium will rise from 7,307,100 KRW this year to 7,822,560 KRW, an increase of 515,460 KRW (7.1%). Health insurance premiums imposed on employees' monthly wages (wage-based insurance premiums) and those separately imposed on comprehensive taxable income, which includes interest, stock dividends, and real estate rental income earned by employees outside their wages (income-based insurance premiums), are social insurance and thus have set upper and lower limits.
Applying the health insurance premium rate (7.09%) to the upper limit of the wage-based insurance premium for next year (7,822,560 KRW per month) translates to a monthly income well over 105 million KRW. The upper limit is adjusted annually in accordance with Article 32 of the Enforcement Decree of the Health Insurance Act, reflecting socio-economic conditions such as wage increases, and is linked to 30 times the average insurance premium of workplace subscribers two years prior to the year the premium is imposed (15 times for regional subscribers). Since wages have been increasing annually, the upper limit has also shown an upward trend.
Since the wage-based insurance premium is shared equally between the company and the employee, the actual maximum amount paid by a high-income employee themselves will increase from 3,653,550 KRW per month this year to 3,911,280 KRW per month next year. This is an increase of 257,730 KRW per month, resulting in an additional annual burden of 3,092,760 KRW. The lower limit of the wage-based insurance premium will also rise from 19,500 KRW per month this year to 19,780 KRW.
As of November this year, 3,738 workplace subscribers paid the maximum personal share of the wage-based insurance premium (3,653,550 KRW per month). This accounted for 0.019% of the total 19,624,000 workplace subscribers excluding dependents.
The upper limit of the income-based insurance premium will also increase from 3,653,550 KRW per month this year to 3,911,280 KRW per month. Converting the upper limit of 3,911,280 KRW per month into monthly income exceeds 54 million KRW. This means that there are employees who earn more than 54 million KRW per month solely from additional income sources such as financial income or rental income, excluding their salary. As of November, there were 4,804 such employees (0.024%).
The income-based insurance premium was only imposed on comprehensive taxable income exceeding 72 million KRW annually outside of wages starting in 2011. However, from July 2018, the health insurance premium system was restructured to focus on income, lowering the threshold to "exceeding 34 million KRW annually" in the first phase (July 2018 to August 2022), and further lowering it to "exceeding 20 million KRW annually" from September this year. However, additional premiums are only imposed on the portion of annual income exceeding 20 million KRW.
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