Health Insurance Premiums Reduced by 30% for 3 Months for Bottom 20-40%... Industrial Accident Insurance Premiums Reduced by 30% for 6 Months (Update)

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[Asia Economy Reporter Kwangho Lee] The government will provide a 30% reduction in health insurance premiums for 3 months to subscribers in the lower 20-40% income bracket based on health insurance premium payments, to assist low-income households and small business owners struggling due to the spread of the novel coronavirus infection (COVID-19). Additionally, industrial accident insurance premiums paid by workplaces with fewer than 30 employees will also be reduced by 30% for 6 months. For the National Pension, payment deferrals will be granted for 3 months only to those who wish among all subscribers, and for employment and industrial accident insurance, deferrals will be allowed for workplaces with fewer than 30 employees.

The government announced on the 30th, at the 3rd Emergency Economic Meeting chaired by President Moon Jae-in, that it had prepared measures to ease the burden of social insurance premiums. This is part of livelihood support measures to help low-income groups and small and medium-sized enterprises, small business owners, and self-employed individuals below a certain scale who are facing economic difficulties due to the spread of COVID-19.

Among the four major insurance premiums, the National Pension, Health Insurance, and Employment Insurance premiums are shared equally between workers and employers, while industrial accident insurance premiums are fully borne by employers. Starting from the March premiums, the government will implement premium reductions and deferrals to alleviate the living expenses burden on low-income households and support the management and employment retention of small businesses.

Health Insurance, with 25.58 million subscribers nationwide, will expand the reduction target to the lower 40% based on premium payments. Previously, the lower 20% (and the lower 50% in special disaster areas) were receiving premium reductions through the first supplementary budget.

By expanding the target to the lower 40% of insured employees with a monthly income of 2.23 million KRW or less, approximately 4.88 million people are expected to benefit from a total reduction of 417.1 billion KRW (139 billion KRW per month) over 3 months. The health insurance reduction will apply from the March premiums, and if premiums have already been paid, the reduction will be applied by combining it with the April premiums. Since employers deduct health insurance premiums from employees' wages at source, the deferral effect benefits only employers; therefore, support is focused on premium reductions rather than deferrals.

The National Pension, with 18.84 million subscribers, will allow a 3-month deferral of payments without charging late fees during this period. Workplace subscribers who have experienced income reduction or loss due to COVID-19 through unemployment or leave can apply for deferral. Regional subscribers who have suspended business or incurred losses for 3 months due to COVID-19 can also apply for deferral if damage is proven. Given the nature of the National Pension, where pensions are paid back according to the premiums paid, the government will only pursue payment deferrals rather than premium reductions or support.

Employment Insurance premiums will be exempted from payment for 3 months starting this month for workplaces with fewer than 30 employees that wish to apply. The government estimates that if all 6.12 million eligible subscribers and 2.28 million workplaces apply, a total of 766.6 billion KRW in premium payment deferrals will be provided over 3 months.

For industrial accident insurance, which is fully borne by employers, workplaces with fewer than 30 employees, self-employed individuals with one person, and special employment types will be eligible to apply for either a 3-month payment deferral or a 30% reduction for 6 months.

The government estimates that the total support effect will be approximately 7.5 trillion KRW through premium payment deferrals and 900 billion KRW through reductions for the four major insurance premiums.

Alongside this, the government will implement measures to ease electricity bill burdens for vulnerable groups and small business owners. For 3 months, the payment deadline will be extended for electricity bills billed over 4 to 6 months for 3.2 million small business households and 1.572 million low-income households. After the payment deadline extension ends, installment payments will be allowed until the end of this year according to the number of months desired by the payer. This can provide a maximum payment extension effect of 7 months. Small business owners are defined as those with fewer than 5 regular employees (fewer than 10 for mining and manufacturing industries), and low-income groups include basic livelihood security recipients, near-poverty groups, persons with disabilities, and independent or distinguished veterans.

This content was produced with the assistance of AI translation services.