Individuals caught evading health insurance premiums through false employment or fabricated eligibility will face retroactive collection of up to six years' worth of unpaid premiums, under a newly passed law. While the previous lack of legal grounds made it virtually impossible to impose premiums more than three years old, the revision is being credited with closing a blind spot in Korea's health insurance premium assessment system.
The National Health Insurance Service (NHIS) said Tuesday that the National Assembly passed amendments to the National Health Insurance Act and the Long-Term Care Insurance for the Elderly Act at its plenary session on November 23. The amendments will take effect six months after promulgation.
The amendments, proposed by People Power Party lawmaker Kim Mi-ae, codify the "exclusion period" for premium assessment — the statutory deadline within which health insurance premiums can be imposed. An exclusion period is the legal timeframe during which the state or a public institution may exercise certain rights. Once the period lapses, the right to impose premiums itself is extinguished.
Until now, the NHIS had applied only a three-year statute of limitations to its collection rights, which are the rights to actually collect premiums. For assessment rights — the rights to levy the premiums themselves — there were no separate provisions, so in accordance with Supreme Court precedent, the same three-year period used for collection was applied.
The problem was that this framework was frequently abused. Company A, for instance, falsely reported that four people were working at the business despite having no workplace-based subscribers, thereby reducing its premium payments. The scheme was uncovered only after seven years. The NHIS should have imposed a total of 84.15 million won ($61,000) in regional premiums on the four falsely registered subscribers, but under the existing standard, it could only impose approximately 34.89 million won covering the most recent three years. The remaining 49.26 million won was effectively uncollectible due to the exclusion period.
To address this issue, the amendment sets the exclusion period at three years as a general rule but extends it to up to six years in cases where premiums were evaded through deception or fraudulent means. This represents a tightening of sanctions against fraudulent benefit claims and false eligibility acquisitions.
A special provision was also newly established for cases requiring premium recalculation based on the outcome of lawsuits or administrative appeals. Premiums can now be reassessed within one year from the date a ruling or decision becomes final.
As a result, problems in cases such as ordinary wage lawsuits — where the NHIS had been unable to impose premiums despite winning after years of litigation — are expected to improve. In lawsuits over whether workers' bonuses should be recognized as ordinary wages, health insurance financial losses from such delays have been estimated at more than 30 billion won.
The method for calculating long-term care insurance premiums will also be clarified. Long-term care insurance premiums are calculated by multiplying health insurance premiums by a certain ratio, but until now, the absence of a standard for handling decimal points had caused confusion in the field. The amendment specifies that figures should be rounded at the fifth decimal place.
"This is the first time among the four major social insurance programs that an exclusion period has been clearly introduced by law," an NHIS official said. "It will serve as an opportunity to reduce blind spots in the premium assessment process and enhance the fairness of the system."
