Insurance Premiums and Standard Monthly Remuneration
Insurance premiums paid by employers and insured persons cover the largest portion of the costs required to operate a health insurance association. These insurance premiums consist of the health insurance premiums paid by every insured person and the long-term care insurance premiums paid by insured persons age 40 to 64.
The insurance premiums paid by insured persons are not only used to provide insurance benefits and conduct the healthcare business but also to subsidize expenses to support medical care for the elderly.
About Insurance Premiums
Health insurance societies calculate the monthly health insurance premiums by multiplying standard monthly remuneration by the insurance premium rate. Insurance premiums according to bonuses and other additional income are calculated by multiplying the standard amount of bonuses by the insurance premium rate. These premiums are paid by employers and insured persons.
The insurance premium rates of health insurance societies are announced each March in a public announcement (press release) from each health insurance association.
Calculation Method for Insurance Premiums
- Insurance premiums paid monthly:
Standard monthly remuneration × Insurance premium rate - Insurance premiums paid for bonuses:
Standard amount of bonus × Insurance premium rate
*The maximum standard amount of bonuses in total for each fiscal year is 5,730,000 yen (rounded down to the nearest 1,000 yen).
In addition, insurance premiums on income with bonuses are deducted on the month the insured persons receive bonuses.
*A breakdown of the health insurance premiums is provided below.
Insurance Premium Rate
| Health insurance premium rate | Long-term care insurance premium rate | |
|---|---|---|
| Payment ratio of insured persons |
34.024/1000 | 10.000/1000 |
| Payment ratio of employers |
45.976/1000 | 10.000/1000 |
| Total | 80.000/1000 (including adjusted insurance premiums) |
20.000/1000 (paid by insured persons age 40 to 64) |
About Standard Monthly Remuneration
The monthly insurance premiums and paid allowance amounts for social insurance are determined according to the salary and wages of insured persons. “Standard monthly remuneration” refers to the monthly salary and wages. However, monthly remuneration includes overtime and other non-fixed wages as well as various other compensation, and therefore fluctuates on a monthly basis. Accordingly, the Western Digital Technologies Health Insurance Association calculates the standard monthly remuneration by segmenting fixed ranges of monthly salaries to achieve greater efficiency. Standard monthly remuneration is ranked as 50 levels from Class 1 (58,000 yen) to Class 50 (1,390,000 yen), and each class has a monthly compensation range.
The standard monthly remuneration is determined when an individual is hired and becomes an insured person, and then is adjusted each year. Moreover, the standard monthly remuneration is also adjusted with significant changes in compensation.
Period for Determining the Standard Monthly Remuneration
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Upon joining the company (Upon certification as an insured person) |
The standard monthly remuneration is determined together with other procedures for enrolling in the health insurance program based on the initial salary and other compensation. |
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July 1 every year (periodic adjustment) |
The standard monthly remuneration is adjusted every July 1 according to the average remuneration for April, May, and June each year. Health insurance societies apply the adjusted annual standard monthly remuneration for one year from September 1 to August 31 of the following year. However, this excludes individuals who fall within the following items during periodic adjustment:
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Upon significant changes in remuneration (Adjusted as necessary) |
If fixed wages fluctuate (Class 2 or higher) between September and August of the following year due to factors such as increases or decreases in pay, changes in salary systems, or commuting allowance, the standard monthly remuneration is adjusted from the fourth month based on the compensation for the next three months after the month of the change in fixed wages. |
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Upon the end of childcare or other leave (Adjustments at the end of childcare and other leave) |
When compensation declines due to working reduced hours or other such factors, the Western Digital Technologies Health Insurance Association adjusts the standard remuneration of insured persons raising a child under age 3 on the day childcare or other leave ends upon request. |
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Upon the end of maternity leave (Adjustments at the end of maternity leave) |
When compensation declines due to working reduced hours or other such factors, the Western Digital Technologies Health Insurance Association adjusts the standard remuneration of insured persons raising a child before and after maternity leave on the day maternity leave ends upon request. |
The health insurance and long-term care insurance premiums are adjusted when the standard monthly remuneration changes, which may also impact high-cost medical care expenses and other payments as well as co-payment reductions and other additional benefits.
Overview of Standard Amount of Bonuses
There are various names for bonuses, such as year-end lump sum payments, year-end allowances, and settlement allowances. Bonuses paid three times or less per year as compensation for work influence insurance premiums. The standard amount of bonuses determines the insurance premiums for bonuses and other such compensation.
The standard amount of bonuses is the amount of bonuses and other extra wages actually paid rounded down to the nearest 1,000 yen.
However, the amount taken into account for bonus insurance premiums is limited to a cumulative total of 5,730,000 yen for that fiscal year (April 1 to March 31 of the following year). Any bonuses exceeding this upper limit are not reflected in the insurance premiums.
The standard amount of bonuses is not related to the fundamental calculation of injury and illness or maternity allowance.