Your April Paycheck: Understanding Health Insurance Adjustments
April’s paycheck might appear different than usual. It could be significantly higher or lower than your regular amount. This is often due to health insurance premium adjustments reflecting the previous year’s income.
How Health Insurance Adjustments Work
The South Korean National Health Insurance Service (NHIS) adjusts health insurance premiums annually. Unlike many systems that base premiums on current income, the NHIS initially calculates premiums based on the previous year’s earnings. In April, the NHIS reconciles this with your actual income from the past year, resulting in a refund or an additional charge.
If your income increased due to a promotion, salary increase, or bonus, you may owe additional premiums. Conversely, if your income decreased, you may receive a refund.
2024 Adjustment Results: A Closer Look
According to the NHIS, approximately 16.56 million people were subject to adjustments in 2024. Around 10.3 million individuals saw their income increase and paid an average of 203,555 won extra. Approximately 3.53 million people experienced a decrease in income and received an average refund of 117,181 won. The remaining 2.73 million individuals had no income changes and therefore no adjustments.
Rising Income, Rising Adjustments
The trend shows that the number of people owing additional premiums is increasing year over year, indicating a general rise in income levels.
Payment Options for Additional Premiums
If the amount you owe is more than your monthly insurance premium, the NHIS offers a convenient installment plan. You can spread the payment over up to 12 months.
Automatic Refunds and Streamlined Processes
Receiving a refund is now simpler. The refund amount will be automatically deducted from your April insurance payment. Previously, companies had to separately report employee income to the NHIS for reconciliation. Now, the process is automated through data linkage with the National Tax Service, reducing errors and streamlining the process.
However, businesses that haven’t submitted data to the National Tax Service, or those with special circumstances, must submit information to the NHIS by the end of January.
Pro Tip
FAQ
What causes my health insurance premium to change in April?
It’s due to an annual reconciliation of your premiums based on your actual income from the previous year.
Will I automatically receive a refund if my income decreased?
Yes, the refund will be automatically deducted from your April insurance payment.
Can I pay the additional premium in installments?
Yes, you can pay the amount in up to 12 monthly installments if it exceeds your regular premium.
What if my employer hasn’t reported my income to the NHIS?
Your employer needs to submit the necessary information to the NHIS by the end of January.
Did you know? The automated data linkage between the NHIS and the National Tax Service significantly reduces errors in premium calculations.
Seek to learn more about managing your finances? Explore our other articles on personal finance.
