When you leave a company, you choose your health insurance from three options: "voluntary continuation of employee health insurance," "National Health Insurance (NHI)," and "dependent coverage under a family member." Depending on which you choose, your annual premium can vary by tens of thousands to hundreds of thousands of yen. The best answer changes with your annual income, dependents, and reason for leaving. This article compares the three options by premium and conditions, and organizes how to choose them case by case. For the whole picture of taxes and procedures that come with leaving a company, see also Taxes and procedures when changing or leaving a job.
First, compare the three options
| Item | Voluntary continuation | National Health Insurance | Dependent coverage |
|---|---|---|---|
| How the premium is set | Standard monthly remuneration at the time of leaving × rate (fully self-paid) | Prior-year income + number of people in the household | ¥0 |
| Premium for dependents | No extra charge (the concept of dependents applies) | A per-capita levy applies for each person | — |
| Application deadline | Within 20 days from the day after your leaving date | Within 14 days from the day after your leaving date as a guide | Promptly, through your family member's employer |
| Eligibility conditions | Continuous enrollment of 2 months or more before leaving | Not being enrolled in any other insurance | Expected annual income under ¥1.3 million, etc. (see below) |
If you can qualify as a dependent, ¥0 in premiums is the strongest option. If you cannot, estimate both voluntary continuation and NHI and choose the cheaper one.
Key points of voluntary continuation
This is a system that lets you continue your employee health insurance for up to 2 years after leaving[Kyokai Kenpo (in Japanese)].
- Apply within 20 days from the day after your leaving date. If you are even one day late, in principle you cannot enroll.
- Since the employer's share disappears, the premium becomes fully self-paid (roughly double the amount during employment as a guide). However, there is a cap: for Kyokai Kenpo the standard monthly remuneration cap is ¥320,000 for FY Reiwa 7 (calculated using whichever is lower: your standard monthly remuneration at the time of leaving or the cap).
- The premium in principle does not change for 2 years. The higher your salary was during employment, the more likely it is that the cap makes it cheaper than NHI.
- Under the 2022 reform, you can now quit partway through and move to NHI or dependent coverage at your own request.
Key points of National Health Insurance
- The premium is calculated based on your prior-year income (income levy + per-capita levy + a household levy depending on the municipality). In the year after leaving, because the prior-year salary was high, it tends to be expensive. For how NHI works, see Calculating National Health Insurance.
- Because there is no "dependent" concept, a per-capita levy applies for each family member.
- People who left for company reasons or a justified voluntary reason (specified-eligibility recipients or specified-reason leavers under employment insurance) get a reduction that calculates the prior-year salary income as 30%. Since NHI can drop significantly depending on the reason for leaving, be sure to check with your municipality.
- From the second year on, as your income falls the premium falls too, and it is often the case that NHI overtakes voluntary continuation and becomes cheaper.
If you can qualify as a family dependent, it is the strongest option (conditions apply)
If you can become a dependent under the health insurance of a family member working as an employee, such as a spouse or child, the premium is ¥0[Japan Pension Service (in Japanese)]. However, there are requirements.
- Expected annual income under ¥1.3 million (under ¥1.8 million if 60 or older or a person with a disability) and, in principle, less than half of the insured person's income (for those living apart, less than the amount of remittances).
- Be careful while receiving unemployment benefits (basic allowance). If the daily amount is ¥3,612 (¥1.3 million ÷ 360) or more, you cannot be a dependent during the receipt period.
- People aged 75 or over enroll in the Medical Care System for the Latter-Stage Elderly, so they cannot become dependents under a family member.
Even if the income from your previous job is high right after leaving and you cannot become a dependent, there are cases where you can enroll after your unemployment benefits end, and so on. For details on dependent coverage under health insurance, see Dependent coverage under health insurance.
How to choose, case by case
Think of it this way and you won't hesitate
- If you can qualify as a dependent, go with dependent coverage without hesitation (¥0)
- People whose salary was high during employment tend to find voluntary continuation advantageous in the first year thanks to the cap
- If you left for company reasons, first check the NHI reduction (NHI drops sharply)
Points that are easy to overlook
- Voluntary continuation cannot be joined if you miss the 20-day window
- NHI drops in the second year. Moving to NHI can be cheaper than continuing voluntary continuation for 2 years
- You may be unable to become a dependent while receiving unemployment benefits
For voluntary continuation and NHI, the amount changes with your standard monthly remuneration at the time of leaving (voluntary continuation) and your prior-year income and the municipality's rate (NHI). Estimating both and comparing is the sure way.
FAQ
Which is cheaper, voluntary continuation or NHI?
It is not uniform. People whose salary was high during employment tend to find the capped voluntary continuation advantageous in the first year, and from the second year after leaving, NHI—where prior-year income falls—often overtakes it and becomes cheaper. If your reason for leaving is company reasons, the NHI reduction lowers it further. Estimate both and compare.
When is the deadline for the voluntary continuation procedure?
Within 20 days from the day after your leaving date. Since you cannot in principle enroll if you are even one day late, prepare before leaving. You can enroll for up to 2 years, and the premium in principle does not change for 2 years.
Can I become a family dependent while receiving unemployment benefits?
If the daily amount of the basic allowance is ¥3,612 or more, generally you cannot become a dependent during the receipt period. After receipt ends, or if the daily amount is below the threshold, you may be able to become a dependent. Please check with your insurer.
Can I make my 75-year-old parent my dependent?
You cannot. Because those aged 75 or over enroll in the Medical Care System for the Latter-Stage Elderly, they cannot become dependents under an employee family member's health insurance.
Summary
Reference links (sources)
This article is based on the following official materials (neutral, primary sources). Because premiums and requirements differ by insurer, municipality, and fiscal year, please confirm the latest content before applying.
- Kyokai Kenpo — Voluntary continuation (benefits and procedures) (in Japanese)
- Kyokai Kenpo — On the cap on standard monthly remuneration for voluntarily continued insured persons (in Japanese)
- Japan Pension Service — Income requirement for dependents (¥1.3 million) (in Japanese)
- Ministry of Health, Labour and Welfare — Response to the "income wall" (in Japanese)
* This article is general information, not individual tax or social insurance advice. For specific decisions, please confirm with your insurer, municipality, or a professional.