National Health Insurance Scheme in Korea

Introduction

National Health Insurance Scheme in Korea

1. Introduction

Korea operates a compulsory National Health Insurance Scheme (“NHIS”) under the National Health Insurance Act to promote public health and social security by providing insurance benefits for medical treatment, childbirth, and health promotion.

Insured persons are broadly classified into employee-insured and self-employed insured. As employers are legally required to bear part of the insurance contributions for employee-insured persons, foreign-invested enterprises operating in Korea should be aware of the related obligations.

2. Main content

#1 Overview of the NHIS

Under the NHIS, individuals pay monthly insurance contributions based on their income and assets. Enrollment enables insured persons to access medical services at relatively low out-of-pocket costs and to receive periodic health check-ups.

In principle, all residents of Korea, including Korean nationals and eligible foreign nationals, are required to enroll in the NHIS, except for recipients of Medical Aid under separate welfare legislation.

All employees and employers of business entities, as well as public officials and educational personnel, are classified as employee-insured. Insurance contributions are levied from the month following the acquisition of insured status until the month in which such status is lost. Persons who are neither employee-insured nor their dependents are classified as self-employed insured.

#2 Insurance Contributions and Employer Obligations

For employee-insured persons, insurance contributions are calculated based on monthly remuneration and are shared equally between the employer and the employee (50% each). Employers are required to withhold the employee’s portion from salary and remit the total amount to the National Health Insurance Service.

The insurance contribution rate and the upper and lower limits for remuneration-based contributions are announced annually by the Ministry of Health and Welfare. As of 2026, the contribution rate is 7.19%, with a monthly contribution cap of approximately KRW 9 million and a minimum contribution of approximately KRW 20,000.

3. Conclusion

Under Korea’s NHIS, employers and employees are subject to mandatory insurance contribution obligations. Failure to properly withhold or remit contributions may result in financial penalties, labor disputes, and adverse implications in investment or compliance reviews.

Accordingly, foreign-invested enterprises entering the Korean market should ensure that health insurance contributions are properly managed as part of their payroll and compliance framework.