In Good Health

Photograph by Kohji Shiiki

It was quite a shocker for many in the foreign community when the Japan Times posted an article in late July about new visa renewal guidelines involving a topic that is touchy for some and barely worth a thought for others – national healthcare. In a pdf file, buried on the Ministry of Justice’s website, was a Japanese announcement in bold san-serif font that, as of April 1, 2010, all non-Japanese residents must show proof of registration in Japan’s national healthcare system when applying for renewal of their visa.

The motives for the change, orchestrated by the “Council for Regulatory Reform,” are somewhat opaque, and the foreign community quickly began to snowball the issue, trying to determine how this bureaucratic bullying would affect their short- and long-term plans in Japan. But what does the legalese mean? Is it a law, as was echoed around the Internet, or a guideline? Had the time finally come for system-dodging foreigners to face the music?

So what exactly is the Council for Regulatory Reform? Originally a deregulation subcommittee formed in 1995 with Orix’s chairman Yoshihiko Miyaura at the helm, it was reorganized and renamed several times, with the most recent incarnation formed in 2007 by Shinzo Abe’s cabinet after a complex and turbulent 10-year history within the Department for the Promotion of Administrative Reform (gyosei kaikaku suishin honbu). The council has been involved in changes such as lifting the ban on temporary workers in the manufacturing industry and abolishing the minimum capital requirement for joint-stock and limited-liability companies. It is currently a 15-member committee headed by Nippon Yusen K.K. president Takao Kusakari, with members comprised of academics, an economist, and representatives from shipping and utilities companies, and management consulting and private equity firms.

The piece of legislature in question is part of the committee’s “Three-year Program for Promoting Regulatory Reform,” a plan that, in true bureaucratic style, has been in the works since 2001. While the program dips into an array of issues – including the increase of illegal parking fines, 24-hour operation of ports, and better multi-language support in official matters – the health insurance addendum to visa renewal guidelines has garnered the most attention.

The previous guidelines for visa renewal were based on seven criteria, including past criminal behavior, tax liability and financial independence. Added to that was the clause: “Applicants who have an obligation to join social insurance must do so. As of April 1, 2010, applicants will be asked to provide proof of health insurance at the time of application.”

Enrollment in the social insurance system is required by Japanese law for everyone over 20 years of age, of that there is no debate. Those working “full time” for a company, Japanese or not, are required to join the Kenko Hoken (Social Health Insurance) system, while self-employed and “part time” workers not covered by a spouse or parent’s insurance are to join the Kokumin Hoken (National Health Insurance). The insurance is accepted at all nationally-licensed medical facilities and members are required to pay 30 percent of their fees up to a certain amount.

What sounds like an acceptable system to pay the medical bills is not so cut-and-dry for many expatriates, however. Complaints range from exorbitant monthly fees to a lack of English-speaking doctors and, regardless of the legal word, health insurance is a real and immediate issue for a large number of expats. While many dodge the law with private or traveler’s insurance on the grounds that the national system is inappropriate for non-lifers, a good number remain illegally uninsured with no support from their companies, who are technically required by law to enroll their employees.

A common example of obligation-dodgers are language schools, which use loopholes and lack of enforcement to avoid paying premiums for the foreign teachers they employ. Using contracts that stipulate working hours as 29.5 per week – half an hour less than what is generally, but not officially, considered the minimum working time for health insurance to be a company obligation – employers neglect to enroll staff in Kenko Hoken, a system that would provide them with not only health insurance but also wage protection and maternity allowance.

“It’s an instance of the government pushing off responsibilities from companies onto individuals,” says Dennis Tesolat, secretary of the General Union, a labor organization that represents a number of language schools throughout the country. And indeed many of the uninsured are more victim of their company’s negligence regarding health care enrollment than tax slackers in outright defiance of the law.

The General Union operates on the belief that workers should not be punished for lacking proper insurance by being forced to pay their own way in what Tesolat calls the “inferior Kokumin [Hoken] system.” Meant for the self-employed and others who do not fall under the umbrella of “full-time employee,” the Kokumin Hoken system provides none of the bonuses of Kenko Hoken and forces enrollees to pay for all of their insurance premiums.

Some companies “just simply buy into the notion that foreigners don’t want it, and why would anyone want to spend such a large sum of money each month for something that they have never had explained to them,” explains Tesolat. For others who are on a temporary transfer, avoiding the healthcare system and pension altogether in trade for private insurance that is accepted at English-speaking hospitals and clinics simply makes sense.

“The Japanese go to Singapore, then want to go to a Japanese doctor, and foreigners want that same kind of option,” points out Free Choice founder and Chairman Ronald Kessler, who believes that the country’s health care system is fundamentally inappropriate for an increasing number of expatriates.

Free Choice, an organization established in June 2009 after word of the guideline changes got out, has been riding lawmakers about the reform, citing its lack of transparency and general vagueness as a concern that the government could abuse the new rule as a “broken tail light” to catch undesirables.

The guidelines simply don’t state specifically whether or not a visa application can be accepted or rejected based on enrollment in health insurance. “It lets immigration officers throw the cards any way they want,” says Kessler, “and gives them an excuse to throw out people they didn’t want to keep.” He brought the issue to the Kobe City Assembly, which then approached the central government out of concern of the ambiguous language in the guideline.

According to Kessler, the Ministry of Justice was “overwhelmed by the amount of resistance shown to the planned guideline” and has pulled the guideline for review. However as of the time of writing there has yet to be any official announcement.

Both the Social Insurance Agency (SIA) and Immigration Bureau insist that the change in the guidelines are only designed to encourage people to enter the system by voluntarily signing up. Yet even as it faces the reality that a large portion of the foreign population is not legally insured, the government itself seems to be taking a rather hands-off approach to the issue.

“We urge everyone to join the correct type of insurance for their form of employment, regardless of whether they’re subcontractors or full-time employees,” explains Takafumi Yoneda of the SIA. But a lack of enforcement makes it easy for employers to avoid enrolling foreign workers in Kenko Hoken, even if it is within their right to demand so. Dangerous-sounding penalties do exist – six months in prison or a 500,000 yen fine for entrepreneurs who neglect to enroll their employees – but they are rarely, if ever, enforced.

If the loopholes were closed and the guidelines enforced, it could spell financial disaster for SMEs who would suddenly have to foot 50 percent of each employee’s health insurance fees (and 50 percent of back payments, up to two years). Even so, aside from a “consultation,” the SIA indicated they have no plans to incorporate a system to lessen the financial burden.

Even if Free Choice claims the guideline has been temporarily taken off the books for review, it’s likely only a matter of time until the issue returns to the spotlight. While it isn’t down to “pay up or go home” just yet, the new visa guidelines are causing a number of expats to re-think their plans for the next few years.

One fact definitely deserves more scrutiny: The government has no plans to increase the number of bilingual staff on hand in order to deal with all these new inquiries. “We’ve got people who can speak English, of course,” Yoneda says, “but we ask all those who come for consultation to bring an interpreter.” If Kessler has created the commotion in the MOJ that he claims, then somewhere on the horizon an expat-friendly health insurance system may be waiting.