Government insurance hikes capped

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Government insurance hikes capped

The Regulatory Reform Committee announced yesterday that it would cap increases in premiums for two state-run insurance programs at 15 percent over the next three years.

Labor Ministry guidelines coming into effect on Jan. 1, 2011 would have called for hikes of 40 percent in Occupational Health and Safety Insurance premiums and of 44 percent for the National Employment Insurance. An average employee’s contribution to both policies would also have increased by 43 percent. The steep hike would have been due to a broadening of the definition of income, the basis for calculating insurance premiums.

But the committee’s cap will ensure corporations and employees only pay 15 percent more until 2013, even if other agencies call for higher rises.

The agency may go even further. “If the increased insurance premiums under the 15 percent cap are still too burdensome to corporations and employees, we are willing to consider lowering the premium rates for work insurance,” said Kim Je-rak, head of the Industrial Accident Compensation Division at the Labor Ministry.

The cap may not be enough for businesses. Ryu Gi-jung, Social Policy Bureau Chief at the Korea Employers’ Federation, said, “Even if there is an upper limit on how much insurance premiums can increase, there is no legitimate reason for a 15 percent increase.”

By Kim Ki-chan []
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