Employees’ Health Insurance and Employees’ Pension Insurance

The Employees’ Health Insurance (EHI) and Employees’ Pension Insurance (EPI) are pension funds that are designed for company workers who make income-based contributions. They provide benefits and support to employees in their old age, as well as in the event of disability or death. Coverage under these insurance systems is mandated by law.

CONTENTS

Overview of Employees’ Health Insurance and Employees’ Pension Insurance schemes in Japan

Coverage

Individuals working in a company or factory with 5 or more workers must be covered by the EHI. The same rule applies for those who work in a HOJIN corporation regardless of nationality or preference. A company is defined as one that conducts business specified by the law.

Foreign nationals are allowed to work in the country depending on their resident status but they are also required to purchase policies and must be insured during their time in Japan.

Part-time work

Part-time staff are required to be covered under EHI if their work hours and monthly work days are at least 75% of the work days of a regular employee. If you work lesser hours, you should still be covered if you satisfy the following conditions:

You work at least 20 hours per week
You expect to be employed for at least one year
Your monthly wage is at least 88,000 yen
You are not a student
You work in a “specific covered workplace”

A “specific covered workplace” is:

One that is under a registered HOJIN number, employing more than 500 workers more than 6 months annually
One that has 500 workers or less but has applied for coverage due to an agreement between the employees and the employer

Enrolment

The employer needs to process the new staff’s enrolment by submitting the “Application to Enroll in Employees’ Health Insurance / Employees’ Pension Insurance” (Shikaku Shutoku Todoke – Kenko Hoken / Kosei Nenkin). This form has to be submitted to the Japan Pension Service (JPS) Branch or to the Processing Center that services the employer.

Coverage for Dependents

Dependent family members may apply for coverage if they are financially supported by the employee. This applies to up to third level family members – great grandparents and grandchildren. Other family members such as uncles, aunts, brothers, sisters, nephews and nieces need to be living with the employee in order to qualify for dependant coverage.

For dependants who also have an income, they are qualified for coverage only if they satisfy the following conditions:

If they live with the employee and their income is less than 1.3 million yen (1.8 million yen for dependants aged 60 and older or who are disabled), and less than half of the employee’s annual income
If they do not live with the employee and they have an income of less than 1.3 million yen and their income is less than the total financial support that the employee gives them

Enrolment for Dependant’s Coverage

Enrolment into the system should be done through the employer. The company will submit the “Application for Dependant’s Coverage” (Hifuyosha Ido Todoke) to the JPS Branch Office or Processing Center which services the company.

Payment Contributions

Contributions to the Employees’ Pension Insurance and Employees’ Health Insurance are calculated based on the employee’s monthly salary (Standard Monthly Remuneration), including bonuses. The total contribution amount is split equally between the employer and the employee.

Contribution computation is as follows:

Contribution for regular months: Contribution amount = Monthly Salary x Contribution rate
Contribution for bonus months: Contribution amount = Monthly Salary x Contribution rate + Standard bonus amount x Contribution rate

where

Monthly Salary (Standard Monthly Remuneration) – is the basis for calculating insurance contributions and benefits for EPI and EHI. Remuneration includes all types of payment made to the employee in the form of salary and allowance in return for services rendered. Bonuses and similar incentives paid at intervals of more than 3 months is not included in the standard monthly remuneration.

Standard Bonus Amount – the bonus received from the employer at intervals of more than 3 months. The amount is rounded down to the nearest 1,000 yen and the maximum total standard bonus amount considered for the calculation of payment contributions under EHI is 5.73 million yen in one fiscal year.
Contribution Rate – different contribution rates apply for EPI and EHI. Visit this website for the EPI contribution table. Meanwhile, for the EHI contribution amount table, please refer to the Japan Health Insurance Association website.

The employer deducts the employee’s share of contribution from his or her salary and bonuses then pays the full amount by the last day of the next month.

When the employee takes childcare or maternity leave, both the employer and employee may be exempt from making contribution payments.

Need more information ?

For more information fill in the form or call us and we connect you to our client servicing team directly.

Enquire Now

Benefits

Old-age Employees’ Pension (60-64 years old)

Individuals can receive Old-age Employees’ Pension from the pensionable age to 65 years under the National Pension System. Pensionable age at the moment is 60 years old and is based on the employee’s date of birth. This age, however, is being raised.

Availing of old-age pension is subject to the following requirements:

You have one year or more of EPI coverage periods
You have satisfied the contribution requirement – that is, you have contributed to the Pension system for at least 10 years

Benefit Amount

The benefit amount for the Old-age Employees’ Pension which is payable between the ages 60 to 64 is computed as follows:

Old-Age Pension = (A) + (B) + (C)

Where:

A is the Fixed Amount = ¥1,628 x 0.998 x multiplier depending on date of birth x number of covered months

B is the Remuneration-related Portion = [Average Standard Monthly Remuneration reassessed to current value x (7,125/1,000) x number of covered months (until March 2003)] + [Average Standard Remuneration x (5,481/1,000 where amount varies depending on date of birth) x Number of Covered months reassessed to current value and divided by the months covered (From April 2003 onwards)

C is for Additional Annual Benefits – For individuals with 20 years of EPI coverage periods or, if the individual has 15 years of coverage after the age of 40 (35 in women), and he or she has a dependant family member. Dependants include the following:

Dependant spouse below the age of 65
Dependant children below 18 as of March 31 or age 20 for children with a certain degree of disability according to the law

You get:

¥224,300 for the dependant spouse – this amount varies according to the date of birth
¥224,300 for each of the first and second child
¥74,800 each subsequent child(ren)

Claiming Your Benefit

You need to submit the “Application for Pension: Old-age Benefits under National Pension / Employees’ Pension Insurance (Nenkin Seikyusho: Kokumin Nenkin / Kosei Nenkin Hoken Rorei Kyufu) to the local JPS Branch or Pension Consultation Center. Required documents include your Pension Handbook and a certified copy of your Family Registry. Please refer to your local JPS office for inquiries regarding your specific case.

Early Payment for Old-Age Employees aged 60-64

Individuals born from April 2, 1941 to April 1, 1949 (or from April 2, 1946 to April 1, 1954 for women) may be eligible to request for early payment (in partial or full) of the Old-Age Basic Pension.

Claiming Old-Age Pension and Continuing Work

If your monthly remuneration and your monthly Pension is more than ¥280,000 in total, your specially provided Old-Age Employees’ Pension may be reduced or suspended while you’re still working.

Disability Employees’ Pension

In the event of an accident resulting in disability, an employee may claim Disability Employees’ Pension or lump-sum payment called Disability Allowance. To qualify, he or she must be covered on the date of his first medical examination for the disability-causing sickness or injury. He or she also needs to satisfy certain contribution requirements for the Disability Basic Pension.

Disability levels range from Grade 1 to 3 depending on the seriousness of the injury. Grades 1 and 2 disability may be eligible for both Disability Basic Pension and Disability Employees’ Pension. Grade 3 disability is qualified for Disability Employees’ Pension only. Higher than Grade 3 disability, meanwhile, is eligible for lump-sum payments or Disability Allowance.

Claiming Disability Benefits

Individuals may claim for disability benefit by submitting the “Application for Pension: Disability Benefits under National Pension / Employees’ Pension Insurance” (Nenkin Seikyusho – Kokumin Nenkin / Kosei Nenkin Hoken – Shogai Kyufu) to the local JPS office. Required documents include the Pension Handbook, medical report indicating the individual’s medical history and certificate of diagnosis from the doctor, including how the disability could affect daily life and work.

Survivors’ Employees’ Pension

Surviving family of a deceased employee may receive Survivors’ Employees’ Pension subject to the following eligibility requirements:

The surviving kin is financially dependent on the deceased at the time of his or her death
The deceased is insured or was previously insured and died 5 years from the first medical examination of this injury or sickness. He or she must be covered under the EPI system and satisfied the contribution requirements for Survivors’ Basic Pension at the time of death.
The insured person is eligible for Old-age Employees’ Pension
He should also be eligible for Disability Employees’ Pension (Grade 1 or 2 disability level)

In addition to the Survivors’ Employees’ Pension, the surviving spouse of the deceased may claim for Survivors’ Basic Pension if he or she still takes care of their dependent children. The benefit is given to the following survivors in this order of priority:

Deceased person’s spouse or under age children (below 18 or 20 for children with disabilities according to the law)
Deceased person’s parents who are at least 55 years of age
Deceased person’s grandchildren who are aged 18 and below (or 20 for children with disabilities according to the law)
Deceased person’s grandparents who are at least 55 years of age

Benefits awarded to children will be paid until the first March 31 following the child’s 18th birthday.

Claiming for Survivors’ Employees’ Pension

Surviving kin needs to submit the “Application for Pension: Survivors’ Benefits under National Pension / Employees’ Pension Insurance” (Nenkin Seikyusho – Kokumin Nenkin / Kosei Nenkin Hoken – Izoku Kyufu) to the local JPS Branch office. Required documents include the deceased person’s Pension Handbook, a certified copy of the family registry and medical certificates.

Lump-sum Withdrawal Payments

Non-Japanese citizens who have been covered by the EPI during their stay in the country may claim payments within 2 years after they leave Japan. They can claim payments for at least 6 months of coverage and if they are not eligible for pension benefits.

Summary

The Employees’ Health Insurance and Employees’ Pension Insurance is a government mandated system designed to provide old-age, disability and death benefits to workers regardless of nationality. It is compulsory for all employees working in a company composed of at least 5 workers. It is important for every worker in Japan, including foreign nationals, to understand their rights and responsibilities towards contributing into this system and making benefit claims under the EHI and EPI.

Employees' Health Insurance and Pension Insurance FAQs

Do I need to be a certain age to enrol into the EPI and EHI?

All residents of Japan aged 20 years to 59 years are required by law to enrol into the National Pension and Health Insurance System. The same rule applies if you want to be enrolled into the Employees’ Pension Insurance and Employees’ Health Insurance systems. The only other basic requirement is that you should be employed by a company.

My employer does not support health insurance and pension coverage. Can I contribute to the National Pension System voluntarily?

All companies and workplaces that employ 5 or more workers are required by law to enrol their staff into a health insurance and pension insurance scheme. If your company, for some reason, does not provide this benefit, please contact your local Japan Pension Service branch for assistance.

I will be on maternity leave soon. How do I apply for exemption of contribution until I'm ready to go back to work?

You need to update your status with the Japan Pension Service to be able to get exemptions from making contribution while you’re on maternity or childcare leave. The application can be forwarded through your employer.

I work part-time. Am I covered with the insurance?

Part-time staff is required to be covered under EHI if their work hours and monthly work days are at least 75% of the work days of a regular employee. If you work lesser hours, you should still be covered if you satisfy the following conditions:

You work at least 20 hours per week
You expect to be employed for at least one year
Your monthly wage is at least 88,000 yen
You are not a student
You work in a “specific covered workplace”

What is a "specific covered workplace"?