2022.12.14
The Four Major Social Insurance Schemes in Korea (I)
- What are the four major social insurance schemes in Korea?
- The four social insurance schemes in Korea, based on the Framework Act on Social Security, are part of the socio-economic system created by introducing principles and methods of insurance for the country to carry out social policies. The goal of this socioeconomic system is to prepare for possible social risks (disease, disability, unemployment, death, etc.) to ensure people’s economic life in a stable manner.
- The social insurance system includes National Pension, National Health Insurance, Employment Insurance, and Workers’ Compensation Insurance. The Workers’ Compensation Insurance is also referred to as Industrial Accident Compensation Insurance.
- The four social insurance schemes in Korea, based on the Framework Act on Social Security, are part of the socio-economic system created by introducing principles and methods of insurance for the country to carry out social policies. The goal of this socioeconomic system is to prepare for possible social risks (disease, disability, unemployment, death, etc.) to ensure people’s economic life in a stable manner.
- Can foreigners also benefit from social insurance schemes in Korea?
- Whether a foreign employee is eligible for the 4 major insurances depends on each insurance and their visa status.
- Whether a foreign employee is eligible for the 4 major insurances depends on each insurance and their visa status.
- What does each of the insurances cover and who is or is not eligible to join the insurance? First, on the National Health Insurance.
- National Health Insurance is social security insurance to prevent high medical costs from becoming a household burden and to promote public health by providing insurance services for disease or injury. Like National Pension Service, the government collects insurance premiums paid by the citizens every month and bears part of the medical expenses. Health insurance, which every citizen must subscribe to, is characterized by paying insurance premiums in proportion to their income and benefits being equal.
- All employers should enroll their employees in the National Health Insurance plan. However, if foreign employees receive medical insurance benefits under global medical insurance sponsored by their employer or National Health Insurance plans provided by their home country, they may file an application to get an exemption from the mandatory enrollment.
- The employer and the employee equally bear the cost of insurance contributions. Premiums for local subscribers, those who are not registered under a company in Korea, are calculated based on individual income and property.
- National Health Insurance is social security insurance to prevent high medical costs from becoming a household burden and to promote public health by providing insurance services for disease or injury. Like National Pension Service, the government collects insurance premiums paid by the citizens every month and bears part of the medical expenses. Health insurance, which every citizen must subscribe to, is characterized by paying insurance premiums in proportion to their income and benefits being equal.
- How about the National Pension?
- The National Pension Service is an insurance scheme for the senior years of the citizens or for when income activities are suspended due to sudden accidents or diseases. It is managed by the government, and people pay part of their income as insurance premiums. It protects the life of the elderly so that one can maintain one’s basic life by returning the insurance money to the citizens or their bereaved families. The less you earn, the more money you’ll receive relative to the amount you paid.
- Foreign employees aged between 18 and 60 are eligible to join, but those who are over 60 years old and temporary employees are exempted from the mandatory enrollment. Furthermore, based on the principle of reciprocity between countries, if a foreign employee’s home country does not provide an equivalent national pension option to Korean nationals, the foreign employee may be excluded from joining the national pension as a workplace subscriber.
- The National Pension Service is an insurance scheme for the senior years of the citizens or for when income activities are suspended due to sudden accidents or diseases. It is managed by the government, and people pay part of their income as insurance premiums. It protects the life of the elderly so that one can maintain one’s basic life by returning the insurance money to the citizens or their bereaved families. The less you earn, the more money you’ll receive relative to the amount you paid.
- Shall we talk about the employment insurance next?
- Employment Insurance is social security insurance that supports job security and reemployment by providing the necessary salary for a living when one’s income is lost due to unemployment.
- All employers must enroll all employees in the Employment Insurance. However, employees who are 65 or older, or are part-time workers are exempted from enrollment.
- Foreign employees are not eligible to subscribe in principle. However, those with a residence F-2 visa, permanent residence F-5 visa, and marriage immigration F-6 visa are required to subscribe to the employment insurance if they are employed. And those with a visiting employment H-2 visa, non-professional employment E-9 visa, and a few other cases may join the insurance if they so pref
- Employment Insurance is social security insurance that supports job security and reemployment by providing the necessary salary for a living when one’s income is lost due to unemployment.
