By Oscar Johnson
In plotting their careers in Japan, many - especially younger self-employed, temporary and contract workers - skip two essentials: health insurance and pension. Like bad career moves or a flawed business plan, it can come back to bite you in the end - in more ways than one. Sure, you're fit and trim; and after all you wont be in Japan forever. Wake up and smell the Ocha!
When was the last time you met a veteran ex-pat that told you he or she intended to be here as long as they have? For that matter, how fit and trim do most seem to be in their autumn years? Besides, if you're truly career savvy you know that planning for the future, including the unexpected, is essential for success. That includes health insurance, old age or sudden disability.
So for starters, lets clear up a few misconceptions about things you're supposed to know but no one may have bothered to tell you: Japan may have accepted Admiral Perry's gracious invitation to open its shores to the outside world. But it has not done so for overseas health insurers. Unless you are covered by a government-run or regulated local plan after you've been here a year, you're not legally insured - period.
If skirting the law doesn't faze you consider this: Should something such as a new job or family prompt you to join local National Health Insurance (Kokumin Kenko Hoken) or Employees' Health Insurance (Kenko Hoken) later, you'll likely be hit with a bill for premiums dating back as far as two years. The longer you've been here, the more you could pay for a plan that did not cover you then and will not reimburse you now for past medical expenses.
The bottom line: The lower premiums and 100-percent coverage some overseas insurers offer, versus the lower coverage of more expensive government plans, doesn't count. Not to mention a sudden major medical expense you'll pay out of pocket while waiting months to be reimbursed - all because your insurance is not recognized here. The wise and well-off back their government plans with private ones. If wisdom is your primary asset, this should be part of your long-term strategy for success - not left to chance.
For the record, employees' insurance accounts for most of the nation's insured. It includes plans for public and private school teachers. The national plan is for those ranging from the unemployed to the self-employed. Generally, they cover 70 to 80 percent of medical expenses with an about 300,000-yen payout for childbirths; a similar benefit goes to the insured's family after death. The employee's plan also has benefits for income lost due to pregnancy and illness. It should also be noted that premiums are based not on what you make - but what you made the previous year. How's that for incentive to maintain, if not up, you income level?
Another oft-overlooked essential that can catch up unexpectedly with the self-employed is failing to pay into Japan's mandatory pension system. Lawmakers and even the Prime Minister himself have admitted to this gaffe - all while trying to plug holes in the system before it sinks under the weight of a rapidly aging population. It's enough to spur ducking payments altogether. But that's not a legal option, and chances are the perks that await retiring politicians will not come your way.
Like health insurance, there is a catchall National Pension Plan as well as Employees' Pension Insurance (for which employers foot half the bill) for most full-time salaried workers. About 13,000 yen a month is suppose to guarantee support for old age or disability. It also includes a lump sum for bereaved dependents that is unlikely to cover the cost of even local funeral arrangements.
You should also know that the national pension and health insurance systems are linked - you can't join one without joining the other. So, signing up for a health plan after you've been here a while can mean getting sucker punched with hefty charges for overdue pension payments as well as insurance premiums. By now, your probably thinking: "But I'm not planning to retire here! Why pay for a pension I'll never get?" Well, one reason is you can get some of that hard-earned yen back after you leave!
That's right, qualifying ex-pats working and paying pension premiums here for as little as six months can apply for a lump-sum reimbursement within two years of returning home. Generally, the amount returned will be from 0.4 to 2.4 times the average standard monthly income (depending on how long you paid into the system). You will not get it all back. But consider the remaining balance as a tax for the opportunity to realize your career goals in the world's No. 2 economy.
So before saying sayonara, make arrangements at the national pension section of your local ward or municipal office. You'll likely need to hang on to that local bank account, however. Word has it they will not transfer funds to overseas accounts.
