Pay More or Get Refund Based on Previous Year's Salary Change
Additional Payment per Person in 2022: 200,000 Won
If Burden Is High, 10 Installments Payment Available
With April marking the reflection of the health insurance premium year-end settlement, office workers are closely monitoring their paychecks this month.
Employees whose salaries increased last year will have to pay higher health insurance premiums this month. Conversely, those whose salaries decreased will receive a refund of the excess premiums they paid.
According to the National Health Insurance Service (NHIS) on the 13th, the year-end settlement process for health insurance premiums for workplace subscribers has recently been completed and will soon be notified to each workplace.
The year-end settlement for workplace subscribers is a procedure implemented since 2000, where the difference between the 2022 insurance premium initially charged based on the total wages of the previous year and the finalized premium calculated based on the actual total wages received in 2022 is either additionally charged or refunded in the April 2023 premium.
During the settlement process, employees whose income increased due to salary raises, step increases, or promotions must pay additional health insurance premiums, while those whose income decreased will receive refunds.
This differs from a uniform increase in premiums, where the premiums that should have been paid last year are deferred until April of the following year and paid later according to actual wages.
However, since the settlement occurs shortly after the year-end tax adjustment, employees who have to pay additional premiums often feel like their premiums have increased, leading to annual controversies over the so-called "health insurance premium bomb" every April.
In 2022, 9.65 million people whose wages increased in 2021 paid an average additional 200,000 KRW per person. Meanwhile, 3.1 million people whose wages decreased received an average refund of 88,000 KRW per person, and 2.84 million people who accurately reported their wages with no changes did not require any settlement.
If Additional Premiums Are Burdensome, Payment in 10 Installments Is Possible
The NHIS operates an installment payment system to reduce the burden of paying additional premiums all at once.
Initially, the NHIS guided that payments could be split into 5 installments, but recently finalized allowing up to 10 installments.
The NHIS explained that this measure aims to alleviate the public's burden amid the ongoing 'serious' stage of the COVID-19 crisis and recent inflation.
However, if requested by the user, the payment method can be changed to a lump sum or between 1 to 9 installments for the additional premiums.
Health Insurance Premiums Alone Reach 4 Million KRW... 3,326 Workplace Subscribers Earning Over 110 Million KRW Monthly
Meanwhile, it has been revealed that more than 3,300 workplace subscribers pay nearly 4 million KRW monthly in health insurance premiums.
According to data titled "Status of Subjects Subject to the Maximum Monthly Wage Insurance Premium" submitted by the NHIS to the office of National Assembly Health and Welfare Committee member Choi Hye-young, as of January this year, 3,326 ultra-high-income workplace subscribers pay the maximum personal health insurance premium of 3,911,280 KRW per month based on their salaries.
This represents about 0.017% of the total 19.59 million workplace subscribers as of December 2022, excluding dependents, making it a very small minority.
The monthly wage insurance premium for workplace subscribers is the premium levied on the salary received from the company, and there is a set upper limit.
The maximum monthly wage insurance premium applicable from January to December this year is 7,822,560 KRW, which is an increase of 515,460 KRW per month compared to last year (7,307,100 KRW per month).
The maximum monthly wage insurance premium (7,822,560 KRW) corresponds to a monthly salary of approximately 101.33 million KRW.
Since the monthly wage insurance premium is split evenly between the employee and the company, the actual maximum amount paid by the workplace subscriber is 3,911,280 KRW per month.
Considering the monthly premiums paid, ultra-high-income workplace subscribers earning around 110 million KRW monthly are mostly owners of large or small-to-medium enterprises with annual salaries in the tens or hundreds of billions of KRW, executives, professional CEOs, or chaebol heads.
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