"We Will Catch Fake Employees"... NHIS Introduces Reward Program for Reporting False Subscribers

NHIS Uncovers 9,202 Cases Over Three Years, Recoups 66.6 Billion Won in Premiums
AI-Based Analysis System Introduced to Block Evasive Tactics on Insurance Premiums

Crackdowns and penalties on so-called "fake employee subscribers"—those who register themselves at shell companies or falsely claim employment at acquaintances’ businesses to avoid paying high local health insurance premiums—will be significantly strengthened.

The National Health Insurance Service (NHIS) announced on May 21 that it would substantially intensify its supervision and sanctions against workplaces that falsely report employee status, in order to protect the fairness and financial soundness of the health insurance system.

According to the NHIS, over the past three years (2023–2025), a total of 9,202 individuals were caught falsely obtaining employee subscriber status, which averages more than 3,000 each year. The local insurance premiums imposed on these individuals alone amounted to approximately 66.6 billion won.

Major violations involved: ▲falsely registering as employees at relatives’ or acquaintances’ companies without actually working there; ▲establishing paper companies that do not engage in any business activities, solely to acquire employee subscriber status; and ▲manipulating employment status to avoid high local insurance premiums resulting from substantial assets or income. An NHIS official explained, “The methods—such as using family or acquaintances’ companies and reporting as a paper employee—are becoming increasingly sophisticated, so the currently detected cases likely represent only a portion of the total.”

In response, the NHIS has introduced a self-developed artificial intelligence (AI)-based "fake employee subscriber detection model," utilizing accumulated data. This model comprehensively analyzes factors such as the composition of a company’s workforce, wage levels, and reporting patterns to identify and investigate suspected cases. During the current pilot program, a striking 90.9% of the cases flagged by AI have been confirmed as actual false registrations. NHIS expects that, even with limited personnel, this focused investigation will maximize work efficiency.

Following the revision of the National Health Insurance Act, which passed the National Assembly plenary session in April, penalties for false registration are expected to become even stronger. NHIS plans to introduce a "report reward program," offering incentives to those who report fake employee subscribers, and raise the penalty surcharge for employers who assist in such false registrations from the current 10% to 40%—a fourfold increase—to enforce stricter crackdowns. There will also be guidance and on-site supervision to encourage false subscribers to voluntarily correct their status and convert to legitimate subscribers.

Jung Ki-seok, President of the NHIS, stated, "The finances of the national health insurance are a valuable social asset that must be protected by all citizens," and emphasized, "We will take decisive action against false employee enrollment, which undermines the fairness of premium burdens and causes financial leakage, by leveraging AI-based analysis and thorough on-site inspections until the issue is resolved."

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