Brace for a possible spring shock

by Jenny Uechi

When spring approaches next year, many foreigners in Japan could be in for a rude awakening: From April 1, all those who apply to extend their visa in Japan will be asked to show proof of enrollment in one or other of Japan’s main national health systems, the shakai hoken (social health insurance and pension) or kokumin kenko hoken (national health insurance).

When that time comes, it won’t help to present details of your own private health plan, or to argue about the inefficiencies of the system for foreigners. Japan has had a mandatory universal health care system in place since 1961, meaning that any resident over 20 must be enrolled, whether employed or unemployed, Japanese or non-Japanese. That’s the law, and it’s unlikely to undergo any radical changes between now and April.

What exactly this new Immigration Bureau guideline means is open to interpretation: Is it a sign of equality, bringing foreigners under the same system of social security and legal responsibility that applies to Japanese? Or is it just a cynical money-grubbing scheme to collect from foreigners who have little say in the way things are run?

Before we begin, here’s a recap of Japan’s principal health care programs.

If you are working for a company in Japan, chances are that you are (or need to be) enrolled in shakai hoken, in which you pay half of your health insurance premiums and your company pays the rest. There isn’t much ambiguity about shakai hoken: If a company employs more than five people, and an employee is working more than 30 hours a week for a period longer than 2 months, the company is obligated to submit paperwork for an employee’s health insurance and pension to the Social Insurance Agency within five days of hiring. With shakai hoken comes the kosei nenkin, or pension plan; the two are a set, and enrollment is mandatory whether you plan to retire in Japan or not.

Meanwhile, people who are unemployed, self-employed, employed by a small firm or retired should be enrolled in kokumin kenko hoken (national health insurance). People paying into this system have to sign up on their own for kokumin nenkin (the national pension) at their city ward office.

Those are the rules — rules the government knows are widely flouted.

“In the first place, the idea of a health insurance check during visa renewal was proposed because even though foreigners have to be enrolled, there’s little enforcement of this in the workplace,” says Ritsuko Sugimoto, an official at the Immigration Bureau’s Entry and Status Division. “The labor ministry doesn’t have sufficient means to check regularly on the situation of foreign workers, so they asked our ministry last year if we could check for proof of health insurance at the time of visa renewal,” she explains.

Sugimoto is quick to point out that the health insurance requirement is just a guideline, and only one of many factors to be considered when issuing visas. “If you didn’t have it, we’d give you a pamphlet on how to apply, and you can decide what to do from there.”

It sounds like a breeze, but the real pain could kick in once the government sets you straight about mandatory enrollment. Even if you have been paying into private health insurance the whole time you have been in Japan, you would have to join the Japanese system and possibly even stump up for premiums you have missed during your stay in Japan.

Patrick Johnson (not his real name), an assistant language teacher, has recently had to fork out over ¥700,000 in back payments for the last two years he has been living in Japan without national health insurance. He has just paid his final monthly installment of ¥75,000, he explains with a tired sigh of relief. He used to pay for private insurance, but has left the scheme now he is covered by kokumin kenko hoken.

Johnson, who works for a large corporation with far more than five employees, believes that he should be enrolled in shakai hoken, where his company pays 50 percent of his premiums. But because his contract states that he only works 29.5 hours — well over the 20-hour limit where shakai hoken enrollment is optional but .5 of an hour below the threshold where it becomes mandatory — the company can instead oblige him to sign up for the other option, where he has to bear 100 percent of the cost.

“You know how the system works,” he says wearily, as though hour-fudging is a given in Japan’s language-teaching industry.

Johnson reflects on his experience with more resignation than rage. Last year, he says, the city started sending letters asking him to pay health insurance. Since he already had private coverage through his company, he did not think much of it, but started panicking when the city approached his company asking for his bank information. Then one day it happened — he saw ¥50,000 had vanished from his bank account.

When he confronted his company, it responded that the city was within its rights to seize payment. From now on, they said, the city would deduct from his salary every month until he had paid the full amount.

“The money deductions just started happening,” he recalls. “I was powerless.”

While the government says the new visa guideline will push companies to enroll their employees in shakai hoken, Johnson’s story suggests that in practice it could be the individual worker who is punished for a dodgy employer’s neglect. The silver lining is that the government can only bill you for a maximum of two years in back payments — still a huge chunk of money.

Johnson’s experience is hardly unique: He ends his story with a warning that this could happen to anyone, and that more foreigners will likely have to swallow the same bitter pill when the health insurance checks start in spring.

While it’s tempting to call out gaijin-discrimination on companies that don’t provide shakai hoken to foreign staff, the reality is more nuanced.

“Many foreigners themselves try go get out of shakai hoken. They see it as a waste of money,” says Hideo Yano, president of Arrowfield, an Osaka-based dispatch company that requires enrollment of its foreign staff. “They especially have a problem with the pension, where you pay for 25 years before getting the money back.”

Foreigners can in fact claim a maximum of three years of pension premiums (minus a 20 percent charge) back by applying for a lump-sum withdrawal payment when they leave the country. And workers with a pension scheme in one of the countries (Germany, Britain, the U.S., South Korea, Belgium, France, Canada, Australia, the Netherlands and the Czech Republic) that have signed pension treaties with Japan can exempt themselves from paying into the Japanese system provided their stay is seen to be five years or less.

Companies naturally want to avoid enrollment because of the cost: Paying the equivalent of around 10 percent of an employee’s wage toward health insurance and pension premiums may be fine for long-term employees, but can seem like too much to invest in a worker who may leave the country at any time, even if it is the law.

On the positive side, the new guidelines will at least force the issue into the open so that there are fewer people like Johnson blindsided by back payments, says Yujiro Hiraga, president of the National Union of General Workers, Tokyo Nambu. “I think it will be a good source of pressure for employers to enroll their staff.” But, he adds, “The negative effect is that it might encourage more secrecy among people and companies without it.”

He notes that the number of employers who enroll their staff in insurance is shrinking with the economic downturn, and that things could get worse: A labor ministry survey last year found that over 100,000 companies had not enrolled their staff in shakai hoken as of March 2008.

So should foreigners be pushing for private insurance instead? This prompts the question of why social security is becoming an issue in the first place.

Sugimoto mentions that many foreigners working in Japan get injured or sick on the job, and forgo necessary treatment because they have no insurance.

“Without enrollment in proper public insurance, you have situations where people aren’t going to hospitals because they can’t pay the upfront costs, and hospitals can’t collect money from a patient. It’s a lot of trouble,” she says. “You might prefer the private coverage, but at least public health insurance is recognized by hospitals across the country,” she adds.

While private coverage may give foreigners the option of being treated by English-speaking staff, people can’t choose where they get sick or injured. For all its flaws, the public option will have you covered if you happen to get in an accident in the backwoods of Akita and are rushed to the nearest non-foreigner-specialized hospital.

Also, unlike most private health-care options, public health care is not reimbursement-based. You only have to pay 30 percent of the costs (as opposed to paying the full whack upfront and having it paid back by insurance), and moreover there is a cap on high-cost medical expenses of ¥80,100 a month. Beyond the subsidized hospital meals and payment of 60 percent of your wages in the event of extended leave from work, the fact that the public option does not exist for profit is a source of relief for many with serious health problems.

Under the new Democratic Party of Japan regime there may be some changes to the guidelines, but with the number of foreigners increasing and the population aging, the government looks unlikely to abandon its plan to get more non-Japanese paying into the national insurance system any time soon.