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Each year, the National Health Insurance Corporation (NHIC) in South Korea reconciles health insurance premiums to reflect actual income.This process, while standard, has resulted in millions of employees facing unexpected adjustments to thier payments.
The NHIC initially calculates premiums based on the previous year’s income to ease the administrative burden on workplaces. Though, this means that any changes in salary, such as raises, are not immediately reflected in monthly payments. The difference is then settled in April of the following year.
This year, approximately 10.3 million employed individuals are required to make additional payments,averaging ₩200,000 (approximately $150 USD),due to wage increases in the past year. Kim Mo, an office worker, recently received notice to pay an additional ₩14,720. His annual salary increased from ₩36 million in 2023 to ₩40 million in 2024, triggering the adjustment.
Conversely,around 3.35 million individuals who experienced a decrease in remuneration will receive an average refund of ₩120,000. Meanwhile, 2.73 million subscribers whose income remained stable will not experience any changes.
Financial Implications and Payment Options
The total settlement amount for workplace subscribers reached ₩3.3687 trillion, marking an 8.9% increase from the previous year’s ₩3.92 trillion. This significant figure underscores the critically important financial impact of these adjustments on both employees and the NHIC.
additional payers are responsible for half of the additional leading part of the ₩4.19 trillion. The average additional payment per person is ₩203,555, a slight increase from the ₩203,122 in 2023. Those receiving refunds will get half of the total refund of ₩826.5 billion,excluding the user’s portion. The average refund per person is ₩117,181, a decrease from the ₩134,759 refunded in 2023.
Affected individuals must complete their payments by the 12th of the following month. The NHIC offers installment plans (up to 12 months) for those whose additional payment exceeds their regular monthly premium, providing some financial relief.
While the additional payments may seem like an unexpected burden, the NHIC emphasizes that these adjustments are not a premium increase but rather a correction to align payments with actual income.As one NHIC official stated, Additional payment is not an increase in premiums.
This reconciliation process ensures that the National Health Insurance system remains equitable and sustainable, reflecting the economic realities of its contributors. Understanding the nuances of this system is crucial for all South Korean workers to effectively manage their finances and healthcare obligations.
