1. Industrial Accident Compensation Insurance (IACI)
(1) Concept
IACI is a social insurance system in which the government provides, under the Labor Standards Act, an employee (who has been injured or become ill at a workplace), with compensation paid by their employer. Types of IACI benefits include for medical care, suspension, disability, nursing care, survivor, injury compensation pension, funeral expenses, and vocational rehabilitation. The term 'medical care benefit' refers to an insurance benefit paid to a worker for medical treatment if the worker is injured or sick due to work-related reasons. It should be noted, however, that if the injury or illness can be cured through medical treatment within 3 days, the medical care benefit will not be paid. In order to receive the medical care benefits, the person who suffered the industrial accident (or a family member) should claim the cause as an industrial accident, and the medical doctor of the Workers’ Compensation and Welfare Service (WCWS) should recognize that it was an industrial accident.
(2) Industrial Accident Compensation Insurance Premium Korea Labor Welfare Corporation, “Handbook of Workers' Compensation and Employment Insurance in 2023”
IACI premiums that an employer must pay are calculated by multiplying the sum of the individual total income of workers engaged in the business run by the employer with the accident insurance premium rate. The rate of industrial accident compensation premiums is determined by the Ministry of Employment and Labor based on the ratio of the total amount of compensation for industrial accident compensation insurance for the past three years as of June 30 of each year depending on the risk of the business sector.
1) General Premium
A single premium shall be applied within the same workplace. In a workplace that operates more than two businesses at different rates, the business that determines the applicable rate shall be as follows:
① The business with the larger number of employees
② If there is an equal number of employees, or the number of employees cannot be determined, the business with the higher total wages: or
③ If it is impossible to determine the principal business by 1) or 2) above, the rate shall be determined according to the business with the higher sales of manufactured products or services.
2) Adjustment of Premiums in Exceptional Cases
Applying the same rate for identical industries is designed to create a balance between employers taking significant steps to avoid occupational accidents and employers who do not. In cases where the insurance benefits paid during the previous three years exceeds 85%, or is less than 75%, of the premiums for the same years, the applicable rate for that industry shall be adjusted up or down by a maximum of 50%. This new rate will be applied at the beginning of the following year.
(ⅰ) Application of the Premium
This special premium rate applies to companies that hire 30 employees or more, excluding the construction and logging industries. However, as of July 30, which is the period when the premiums for individual companies are calculated, if the type of industry to which the premiums apply has changed within the previous three years, this special premium application shall not be reflected.
(ⅱ) Method of Calculation
① Ratio of benefits vs. premiums = total insurance benefits paid during the previous three years / total premiums paid during the previous three years × 100
② The insurance benefits paid for unavoidable reasons due to occupational accidents by a third party, natural disasters, power outages, etc. shall be excluded in calculation.
(ⅲ) Date of Application : within 10 days after determination of the general premium rate.
2. Employment Insurance Korea Labor Welfare Corporation, “Handbook of Workers' Compensation and Employment Insurance in 2023”
(1) Concept
Employment insurance includes the traditional social security insurance that provides unemployment benefits to unemployed employees, in addition to employment security insurance, which promotes re-employment through government vocational guidance, which exists to improve employee job security, the employment structure, employee vocational skills development, etc.
(2) Employment Insurance Premium
Premium is charged according to the unemployment benefits premium rate and the employment security & vocational ability development premium rate. The unemployment benefits premium is shared equally between employee and employer, whereas the employment security and vocational skills development premiums are charged only to the employer.
3. National Health Insurance National Health Insurance Corporation, “Handbook of National Health Insurance in 2023”
(1) Concept
The National Health Insurance Program is designed to improve national health and promote social security by implementing insurance benefits for the prevention, diagnosis, and treatment of, and rehabilitation from, disease or injury, care before and during and recovery from childbirth and the overall promotion of health. Health insurance is a mandatory insurance combining both corporate and local membership, with 97% of the entire population enrolled, while others are covered by the Medical Care Assistance Act, which supports recipients of medical benefits under the National Basic Living Security Act. Lee, Chulwoo, 『Study on Migrant Residents』, Kyungin Printing, 2017, p 299.
Those excluded from corporate insurance coverage are ① those who are self-employed and do not employ any workers; ② daily workers employed for less than one month; ③ workers or employees working at seasonal or temporary jobs; and ④ irregular workers or part-timers (who work less than 60 hours per month) who do not attend a work place regularly.
Long-term care insurance is automatically granted upon subscription to the National Health Insurance Program. Long-term care insurance is designed to ease the burden on families of caring for the elderly with chronic conditions such as dementia or stroke. It encompasses a broad range of assistance needed for a prolonged period of time by older people with chronic disabilities, such as with bathing, dressing, eating, etc.
(2) National Health Insurance Premium
The premium is calculated by multiplying the premium rate by the standard monthly wage. The premium calculated is shared equally by the employee and the employer.
Employee’s premium = National Health Insurance Premium(①) + Long-Term Care Insurance Premium(②)
① National Health Insurance Premium = (Total income – non-taxable income) × 3.545%
② Long-Term Care Insurance Premium = ① × 12.81%
1) National Health Insurance Premium
- Monthly income (monthly average income) = Yearly total income (Total income – non-taxable income) ÷ Number of months served
- Premium: 7.09% (3.545% for employer; 3.545% for employee)
- In cases where the employee receives wages from two different companies, the monthly premium shall be calculated based on each company’s income and paid separately.
2) Long-Term Care Insurance Premium
Long-Term Care Insurance Premium = National Health Insurance Premium × 12.81% (Long-Term Care Insurance Premium)
4. National Pension National Pension Corporation, “Handbook of National Pension in 2023,”
(1) Concept
The National Pension System is designed to provide a pension for employees who reach a certain age, and to provide a pension to help support surviving family members after the sudden death or injury of an employee. All persons residing in the country who are between the ages of 18 and 60 are subject to subscription to the National Pension. However, civil servants, soldiers, employees of private schools, and other employees described by Presidential Decree are ineligible for the pension under the Civil Servants' Pension Act, the Veteran's Pension Act, or the Private School Teachers Pension Act.
The scope of application is divided between the company and the individual. For companies ordinarily hiring one or more workers, enrollment in the national pension plan is mandatory. Those excluded from corporate insurance coverage are ① the self-employed who do not hire any workers; ② daily workers employed for less than one month; ③ workers or employees working at seasonal or temporary jobs; and ④ irregular workers or part-timers (who work less than 60 hours per month) who do not attend a work place regularly.
(2) National Pension Premium
The National Pension premium is shared equally by the employee and the employer, in proportion to the employee’s income.
Standard monthly income = Annual total income (Total income – non-taxable income) ÷ Number of months worked
Premium: 9% (4.5% for employer; 4.5% for employee)
