On September 14, 2026, Japan's Ministry of Health, Labour and Welfare tightened its crackdown on "kokuho-nogare" — schemes for escaping National Health Insurance. The scheme works like this: you pay a membership fee to a company, it appoints you as a nominal director, and you join the far cheaper employees' health insurance. 38 operators and 11,610 users have now lost that status and been moved back to National Health Insurance, with reports that premiums may be clawed back retroactively. But if you are a sole proprietor, the question that actually matters is different: is the micro-corporation you set up yourself now at risk? The short answer is no — these notices target the fee-based business, not a company with genuine substance. Still, the tests the notices spell out apply to your company too. This article works through where the line was drawn, straight from the text of the notices.
1. On September 14, 2026 the ministry issued two notices: one amending its March notice to close loopholes, and a new one covering the "hire them as a near-zero-hours regular employee" variant.
2. The decisive test is whether you pay the company fees that exceed your director's remuneration. If you do, the remuneration is not treated as consideration for work, and in principle you are not an insured person.
3. The label on the payment does not matter — study fees, advertising fees, listing fees, participation fees, consulting fees, cooperation money and outsourcing fees all count.
4. Losing the status means enrolling retroactively in National Health Insurance and the National Pension, and losing the employees' pension record for that period.
5. A self-owned micro-corporation with real substance is outside the scope — but the two tests (management participation, and remuneration as consideration) are applied the same way.
What happened: two notices on September 14
Here is the mechanism people call kokuho-nogare. A sole proprietor or freelancer is appointed as a director in name only at a company that markets social-insurance savings. Because the company pays a few tens of thousands of yen a month in director's remuneration, on paper the person is "employed by a corporation" and can join employees' health insurance and the employees' pension. Premiums follow the remuneration (the standard monthly remuneration), so they stay at the lowest bracket no matter how large the person's actual income is. In exchange, the person pays the company a fee larger than the remuneration.
The ministry first moved against this structure in its notice of March 18, 2026[MHLW]. It states outright that people used as directors at such establishments "may be receiving employees' health insurance at lower-than-normal premiums even though they should properly be covered by National Health Insurance and the National Pension." Then on September 14 came two notices: an amendment to that notice, and an entirely new one.
| Notice | Date | What it covers |
|---|---|---|
| Ho-Ho-Hatsu No. 0318-1 | March 18, 2026 | Insured status of sole proprietors who are corporate directors (first clarification) |
| Ho-Ho-Hatsu No. 0914-1 | September 14, 2026 | Amendment closing workarounds such as setting the fee below the remuneration |
| Ho-Ho-Hatsu No. 0914-2 | September 14, 2026 | New. Covers hiring people as "regular employees with extremely short hours" instead of directors |
Survey results released the same day identified 38 operators nationwide running this as a business, with 11,610 users. Administrative guidance has already moved them from employees' insurance back to National Health Insurance, and 7 more suspected operators remain under investigation. The ministry has indicated it may seek retroactive payment of premiums from users[Kyodo News].
The line the notices draw: only two things are examined
This is the heart of the matter. The notices say that whether a corporate director qualifies as an insured person is judged comprehensively against two tests. These are not new rules; they put a long-standing principle in writing.
1. Is the work, in substance, a regular provision of labor amounting to participation in the management of the corporation?
2. Is the remuneration paid regularly by that corporation as consideration for that work?
Both are "judged comprehensively in light of the actual situation." Titles and contract wording do not decide it; what you actually do and what you actually receive do.
Test 2: paying fees larger than your remuneration fails
This is the clearest one. The notice states that where a sole proprietor pays the corporation fees exceeding the director's remuneration, the person cannot be said to be receiving remuneration commensurate with the work, and in principle there is no regular payment as consideration. If the net flow is negative, it is not a salary — it is a participation fee.
The September 14 amendment plugged two gaps here.
- Setting the fee below the remuneration does not save you. Even where the fee equals or is lower than the remuneration, if the fee accounts for much of the remuneration and the activity amounts to nothing more than mutual-aid cooperation among directors, a customary employment relationship may not be recognized. This language kills designs like "remuneration 50,000 yen, fee 49,000 yen."
- Routing the payment to another company changes nothing. Even if the fee is paid to an affiliated corporation, where that payment is in substance a condition of becoming a director and the corporations are merely moving money between themselves, they are treated as one and the same corporation. This was already in the March text.
The notices define the term in a footnote: study fees, advertising fees, listing fees, participation fees, consulting fees, cooperation money, outsourcing fees — the name does not matter. Rewriting the line item on an invoice is not a defense.
Test 1: attending a meeting and offering opinions is not management
The other test looks at the substance of the work. The notices list cases that in principle do not amount to management participation:
- Answering questionnaires or attending study sessions for self-improvement — in substance mere self-development
- Simple activity reports or information sharing that involve no concrete supervision or exercise of authority
- Merely cooperating with or being asked to help introduce the corporation's business, with no obligation to provide labor
- Mutual study among directors, or reciprocal referrals of work — nothing more than mutual-aid cooperation (added September 14)
The notices are equally specific about what does count. Are there employees or other directors you supervise? Do you have decision-making authority over an area? Do you attend board meetings and handle coordination and reporting? How often do you come in for work other than meetings? For anyone running their own company, this doubles as a checklist.
The new third notice: "regular employees" working a few hours a week
The notice issued fresh on September 14 covers hiring people as employees rather than directors[MHLW]. Sole proprietors are hired as "regular employees with extremely short working hours" and made to pay fees exceeding their pay — the same scheme, moved from the director's door to the employee's door once the first was shut.
Under this notice, if both (1) fees exceed pay and (2) the work is not a regular provision of labor, the person in principle has no insured status; if only one applies, the case is judged individually. Point (2) explicitly includes working hours that are "constantly extremely short" over a week or a month. The notice also names a further workaround: outsourcing your own business to a third party and then being "hired" by that third party, so that the fee you paid effectively comes back as your pay. That route is closed in advance.
Is your own micro-corporation at risk?
To be direct: these notices target the fee-based business, not a company you set up and actually run yourself. Both notices open by describing establishments that "advertise reductions in social insurance premiums" and "have people pay fees exceeding their remuneration." Nobody pays fees to their own company, so test 2 never bites.
That said, test 1 — is there a regular provision of labor amounting to participation in management? — applies to corporate directors generally, including representatives. A company with almost no revenue, no live transactions and no working books may be found to lack any substance of being "employed by the corporation," fees or no fees. The notices go as far as instructing insurers to have a loss-of-status notification filed and the insured status terminated where no substance is confirmed.
What the notices target
- Paying fees to someone else's company to be made a director
- Fees larger than the director's remuneration
- Duties limited to study sessions and information sharing
- Being a "regular employee" for a few hours a week
- Being hired by the party you outsourced your own work to
Outside the scope (substance still required)
- A company you set up and represent yourself
- Real revenue, transactions, books and contracts
- A business distinct from your sole proprietorship
- Low director's remuneration (the low figure alone is not a violation)
Setting remuneration low enough to land in the lowest bracket is not condemned anywhere in these notices. What they attack is not the size of the remuneration but the existence of fees exceeding it and the thinness of the work. The design itself is covered in Micro-corporations and social insurance premiums.
- Are you paying the corporation fees, participation charges, advertising or consulting fees that exceed your remuneration?
- Does the company have a continuous record of contracts, invoices and receipts (rather than years of zero revenue)?
- Has your work as a director shrunk to attending study sessions and sharing information?
- Is the corporate business genuinely distinct from your sole proprietorship, not the same work split on paper?
- Do you keep minutes, books and transaction records that could demonstrate substance after the fact?
If the first item applies to you, review the arrangement with a professional now. The other four are about keeping yourself in a position to explain your substance.
What losing insured status actually means
Losing the status retroactively affects more than premiums.
| Item | What happens |
|---|---|
| Health insurance | Status terminated. You enroll retroactively in National Health Insurance, which is income-linked — so the larger your income, the sharper the jump |
| Medical costs in that period | The portion the health insurance society paid may have to be settled. You then claim it again from the NHI you were retroactively enrolled in, so check the procedure at your municipal counter |
| Pension | The employees' pension period disappears and becomes National Pension (Category 1) contributions to be paid retroactively. The future employees' pension top-up is lost too |
| Fees you paid | No guarantee of a refund under the system. It becomes a civil matter with the operator |
One thing worth holding onto: most of those 11,610 people were sold this as a legal way to save money. Until the ministry set out its criteria in March, the administration had not drawn a clear line either. The burden still falls on the user. However polished the sales pitch, the system judges substance after the fact and applies that judgment retroactively — that is the real lesson here. For the history of schemes that died this way, see Tax-saving schemes that disappeared.
Why did 11,610 people sign up in the first place?
It is worth looking at the demand side rather than stopping at criticism. National Health Insurance for sole proprietors is linked to the previous year's income, has no concept of dependents, and adds a per-capita levy for every family member. And the cap has been raised almost every year.
| Fiscal year | Annual cap | Increase since FY2000 |
|---|---|---|
| FY2000 | 600,000 yen | — |
| FY2010 | 730,000 yen | +130,000 yen |
| FY2020 | 990,000 yen | +390,000 yen |
| FY2025 | 1,090,000 yen | +490,000 yen |
| FY2026 | 1,130,000 yen | +530,000 yen |
Per the ministry's own materials, the FY2025 cap was 1,090,000 yen (920,000 for medical care plus 170,000 for long-term care)[MHLW, 205th Social Security Council medical insurance subcommittee]. In FY2026 it rises again, to 1,130,000 yen — 670,000 for medical care, 260,000 for latter-stage elderly support and 170,000 for long-term care, plus the newly created child-care support portion of 30,000[Shinjuku Ward (in Japanese)]. That is 530,000 yen above the 600,000 of FY2000, over 26 years. The same document explains the policy behind the increases: raise the cap in stages so that the share of households hitting it approaches 1.5%. In other words, the design deliberately increases the number of households pinned at the ceiling. The policy rationale holds together, but from the ceiling it feels like being charged more for earning more.
That weight is the reason a calculation like "pay 80,000 yen a month in fees and still come out ahead" worked for eleven thousand people. Closing the loophole is fair to everyone who pays their National Health Insurance honestly. But closing it does not remove the demand. Without relief on the weight of the premiums themselves, the next workaround will simply appear.
Here are legitimate options available now — all of them work by reducing the income that drives the premium.
- Take the full 650,000 yen blue-return special deduction. NHI premiums are calculated from total income, so the deduction flows straight through (Blue vs. white tax returns).
- Small Enterprise Mutual Aid contributions are fully deductible; you choose between 1,000 and 70,000 yen a month (Small Enterprise Mutual Aid).
- iDeCo contributions are also fully deductible (The tax effect of iDeCo).
- Many municipalities offer reductions when income drops sharply. If your income fell well below last year's, ask at the municipal NHI counter (How NHI premiums are calculated).
- Depending on your trade, a National Health Insurance Society (arts, medicine, construction and others) may be an option; some charge a flat premium.
To see where your municipality stands nationally, see the NHI premium rankings.
What to do today
What to do today
- Check the past year of bank withdrawals for fees, participation charges, advertising or consulting fees paid to the corporation whose social insurance you are on
- If you find any, set that amount side by side with your director's remuneration or pay. If the fees are larger, contact a pension office or a labor and social security attorney straight away
- If you run your own company, confirm that recent revenue, contracts and minutes exist — and if they are thin, start keeping them properly this fiscal year
Frequently asked questions
Does this crackdown cover a micro-corporation I set up myself?
The two notices target establishments that advertise social-insurance savings, make sole proprietors nominal directors or near-zero-hours employees, and have them pay fees exceeding their remuneration. A company you established, represent, and run with real revenue, transactions and books is not within that scope. However, the test of whether there is a regular provision of labor amounting to participation in management applies to directors generally, so a dormant company with no substance can have its status denied regardless of fees.
Is setting director's remuneration as low as 45,000 yen a month a problem in itself?
No. The notices do not condemn low remuneration. What they target is paying the corporation fees that exceed the remuneration (no consideration) and work whose substance is limited to self-development or information sharing (no management participation). For a representative running a real business, a low remuneration figure is not in itself a ground for losing insured status.
Is it safe if the payment is called an advertising fee or an outsourcing fee rather than a membership fee?
No. The notices state in a footnote that fees include study fees, advertising fees, listing fees, participation fees, consulting fees, cooperation money and outsourcing fees, whatever the name. Payments routed to an affiliated corporation are treated the same where the payment is in substance a condition of becoming a director and the corporations are merely moving money between themselves.
If I already used one of these schemes, will premiums be clawed back?
Reports indicate the ministry intends to seek retroactive payment of National Health Insurance and National Pension premiums from users. When health insurance status is lost retroactively, the medical costs the insurer covered in that period must be settled, and the employees' pension period is replaced by National Pension months, which affects your future pension. Treatment varies by insurer and pension office, so check directly if this may apply to you.
Sources
- MHLW, "Treatment of insured status for sole proprietors who are corporate directors" (March 18, 2026; amended September 14, 2026)
- MHLW, "Treatment of insured status for sole proprietors employed as regular employees with short working hours" (September 14, 2026)
- MHLW, "On the cap for National Health Insurance premiums (tax)" (205th Social Security Council medical insurance subcommittee, document 3)
- Kyodo News, "38 operators in the 'kokuho-nogare' business; 11,000 users, MHLW survey" (September 14, 2026)
The counts of operators and users are as published on September 14, 2026. The investigation is continuing and the figures may change. This article is general information, not social-insurance or tax advice. For your own case, consult a pension office, a labor and social security attorney, or a tax accountant.
