The biggest English conversation school in Japan was recently accused of treating its non-Japanese instructors illegally. It is said that the giant Eikaiwa breaks the law by not enrolling eligible teachers into either the Employee's Health Insurance Programme (Shakai Kenko Hoken) or the Employee's Welfare Pension Insurance Programme (Kosei Nenkin). The school, in its own defence, insists that the current Japanese public insurance system is NOT appropriate for most foreign teachers, who return to their home countries within three years. The company claims that these systems are not beneficial for foreigners who stay for a short term. In fact, most English conversation schools don't enrol their employees into the insurance system. Are their pleas justified? Is it really a waste of money for foreigners, who are only planning to stay for a short time, to enrol in the system?

To answer some of these questions and others about this complicated system, I'll give you the basics of the Japanese Social Insurance System.

What Type of Insurance Can I Get?

In Japan, there exist two major public insurance systems, National Insurance and Social Insurance. The former is for the self-employed, farmers or part-time employees, and the latter is for full-time employees. Both systems provide health insurance and a welfare pension. You cannot enrol into the health insurance separately. It is mandatory to enrol in both parts of each system.

What are the Benefits of Social Insurance?

If you are a full-time employee, and covered by Social Insurance, you have the following two major benefits.

Employee's Health Insurance

This health insurance entitles employees and their family members to receive medical and dental treatment, such as consultation with doctors, treatment, prescriptions, medicine, and hospitalization at 30% of the actual costs. This insurance also covers 60% of lost wages due to sickness or injuries.

On top of these, there are also other cash benefits for events such as childbirth (\300,000 after the birth of each child), maternity leave (60% of your wages for 42 days prior to the birth and 56 days after the birth), and death (for the funeral arrangement).

Employee's Welfare Pension Insurance (Kosei Nenkin)

If you have paid into the pension system for more than 25 years, this insurance provides pension benefits when employees reach 65 years of age or become disabled until their death.

What Are The Monthly Premiums?

Every July, employers are required to determine the appropriate social insurance premiums for each employee and report the amounts to the social insurance office. The employer is required to report to the social insurance office the amount of remuneration paid to each employee during the three-month period from April to June. The office determines the Monthly Standard Remuneration (MSR) based upon the MSR table.

The employee's portion of the social insurance premiums is withheld from salary and paid, along with the employer's portion, to the social insurance office in the following month.

Employee's Health Insurance

If your salary is \250,000, 82/1000 of your salary is paid 50/50 employee/employer. You pay \250,000 × 82/1000 × 50% = \10,250/month

Employee's Welfare Pension Insurance (Kosei Nenkin)

If your salary is \250,000, 135.8/1000 of your salary is paid 50/50 employee/employer. You pay \250,000 × 135.8/1000 × 50% = \16,975/month

You can't join each insurance system separately, you need to join both systems. That means your total monthly premium becomes \27,225/month (\10,250 ＋ \16,975).

Am I Eligible for Social Insurance?

It is mandatory for the employer to enrol the employees who work for more than 30 hours per week, or more than 75% of the hours of a full time worker in the same job as you. You don't have to apply for it on your own. Your employer has to enrol you if you are eligible for the insurance.

Do I Get Some Money Back If I Go Back To My Country?

Yes. There is a withdrawal refund system for people who withdraw from either the National Welfare Pension Scheme or the Employee's Welfare Pension Scheme (employers don't get money back). Through this system, foreign nationals who, while living in Japan, entered a pension scheme and paid more than 6 months insurance premiums can receive lump-sum withdrawal benefits if he/she makes a proper application within 2 years after returning to their country or leaving Japan permanently

For some of you who are very healthy and have a plan to return to your home country, travel insurance is much cheaper than the public insurance. For these people, the public insurance is basically like paying a tax, and you get mandatory social insurance as a benefit.

It is true that the current Japanese system is not suitable for the majority of non-Japanese populations. However, enthusiastic debate regarding social insurance enrolment would likely evoke public interest and perhaps even help change the system into a more foreign user friendly system. So if you have an opinion, let it be heard, speak loud and clear and more importantly, be polite about it.