The Society's insurance premiums

You must pay insurance premiums when you join a health insurance program. While insurance premiums are based on your income (e.g., total remuneration including salary and bonuses), methods for calculating the premiums differ between monthly salary and bonuses.

Tips

Payment for insurance premiums is shared by the insured person and his or her employer. The amount paid by the insured person is deducted from salary and bonuses.
After you reach age 40, premiums for long-term care insurance will be collected as well.

Method of calculating insurance premiums

Since the amounts of remuneration received by insured persons are not perfectly uniform and fluctuate from month to month, calculating premiums based on each individual's actual remuneration amount is impractical. For this reason, insurance premiums are calculated based on a standard value (standard monthly remuneration) determined corresponding to a certain ranges of remuneration amounts.

“The standard bonus” is the bonus amount (for these purposes capped at a cumulative annual maximum of 5.73 million yen) rounded down to the nearest 1,000 yen.

Standard monthly remuneration

The amounts of insurance premiums will be determined based on the amounts of your salary and other remuneration. However, the amount of remuneration received by each of you is not equal and may vary each month, and it would be extremely complicated in terms of clerical work if the calculation of insurance premiums was simply based on the amount of remuneration of each of you. Therefore, the amounts of insurance premiums will be calculated after determining the standard amounts according to a certain range of remuneration. These standard amounts are referred to as the “standard monthly remuneration,” and these monthly amounts are currently categorized into 50 grades, ranging from the minimum of 58,000 yen to the maximum of 1,390,000 yen.
The standard monthly remuneration serves as a calculation basis not only for insurance premiums but also for childbirth allowance, injury and sickness allowance, and other insurance benefits.

Tax-included, calculated by combining commuting transportation expenses with salary

The scope of remuneration that serves as a basis for determining the standard monthly remuneration includes all payments made to you in exchange for your labor. The calculation considers the amounts of salary and other compensation to be tax-inclusive, and combines costs for commuter passes, and so forth.
First, such as when you join a company, you will be enrolled in the health insurance society, and the standard monthly remuneration as of the acquisition of insurance status is determined. After that, on July 1 of every year, the health insurance society will fix an average amount of remuneration in the preceding three months, i.e., April, May, and June, and this amount will be considered the standard monthly remuneration for the period from September of that year to August of the following year. This determination of average amount is called 'regular determination.'
If any situation, such as an increase in your salary, results in a difference of two grades or more between the average amount of your three months' remuneration and your standard monthly remuneration already fixed, then your standard monthly remuneration for the following months may be revised; this situation is referred to as 'whenever revision becomes necessary.'

The Society's insurance premium rates

参考リンク

Monthly insurance premium table (Japanese version only)

	General insurance premium rate	Long-term care insurance premium rate
Percentage paid by insured person	3.2％	0.825％
Percentage paid by employer	4.8％	0.825%
Total	8.0％ (Including regulation insurance premium rate)	1.65％ (Paid by insured persons aged 40-64)

コラム

Reference dates for determining your standard monthly remuneration

Your standard monthly remuneration is first determined when you obtain your eligibility as an insured person. However, the standard monthly remuneration is revised every year. It is also revised if your remuneration changes significantly.

Upon hiring (date on which eligibility begins)	Determined based on your starting pay and other factors
As of July 1 each year (updated periodically)	In principle, the standard monthly remuneration for all insured persons is revised as of July 1, based on their remuneration for April, May, and June of that year. The revised standard monthly remuneration will apply to the period from September 1 through August 31 of the following year.
When your remuneration changes significantly (revised as needed)	Your standard monthly remuneration will be revised if your average monthly remuneration over a period of three consecutive months changes by two or more grades due to a change in fixed wages: for example, when you receive a raise.
End of childcare or other leave (revised upon end of leave)	When an insured person caring for a child less than three years of age on the date childcare or other leave ends has experienced a change of one or more grades in average monthly remuneration over the three-month period starting at the end of the leave, for reasons including reduced working hours, he or she may apply for revision.
End of maternity leave (revised upon end of leave)	When an insured person caring for a child covered by maternity leave on the date maternity leave ends has experienced a change of one or more grades in average monthly remuneration over the three-month period starting at the end of the leave, for reasons including reduced working hours, he or she may apply for revision.

Types of insurance premiums

Health insurance premiums consist of general insurance premiums, long-term care insurance premiums, and regulation insurance premiums. The amount of each premium is determined by multiplying the standard monthly remuneration and standard bonus by the insurance premium rate for each type of insurance.

General insurance premiums (base premiums + specific premiums)

General insurance premiums are generally used to help defray health insurance benefits. They also serve as financial resources for paying the cost of support for medical care for the elderly. To clarify the portion of the premiums that help defray support for the elderly, general insurance premiums are separated into base premiums and specific premiums.

Base premiums: premiums applied to services such as medical care benefits and health activities
Specific premiums: premiums applied to uses such as support payments to the medical care system for the advanced elderly and benefits for persons in the earlier stage of old age

The Society is free to determine its general insurance premium rate within the range of 3-13%, based on its specific needs and circumstances. Based on its specific needs and circumstances, it is also free to determine the shares paid by the employer and insured persons.

Long-term care insurance premiums

Long-term care insurance premiums are premiums for long-term care insurance. While the long-term care insurance system is run by each municipality across Japan, each medical care insurer is required to collect premiums from insured persons and dependents aged 40-64 who join the medical care scheme (both are regarded as category 2 insured persons under long-term care insurance). The Society collects premiums from insured persons aged 40-64.

Regulation insurance premiums

The health insurance societies in Japan jointly operate systems providing joint coverage of high-cost medical expenses and aid for societies facing dire financial circumstances (financial adjustments). Regulation insurance premiums fund these systems.

The insurance premium rate for these premiums is determined by multiplying the basic regulation insurance premium rate (0.13%) by the rate of slight variation (i.e., the rate of adjustment) based on the financial state of each society.

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What are insurance premiums used for?

For insurance benefits

Insurance premiums are used to pay for medical care benefits and other benefits, a Health Insurance Society's central mission. They are also used to promote health activities and to help fund mutual aid systems among health insurance societies.

To support medical care for the elderly and other individuals

Insurance premiums are used not just to cover the costs of the various services provided by health insurance societies, but to cover the cost of supporting medical care for the elderly. Significant support payments are made to medical care systems for the elderly, including the Medical Care System for the Advanced Elderly. The rising costs accompanying aging throughout society are a major cause of financial difficulties facing health insurance societies.