Do expatriates need to join the National Health Insurance program?

The promulgation of the National Health Insurance Act in 1994 changed Taiwan from a country where most of the population did not have insured health care to one where most of the population enjoys a health care system that ranks among the best in the world. The program provides both dental and medical coverage, and its premium ratio is 6:3:1, paid by employers, employees, and the government, respectively.

Some expatriates assigned to work in Taiwan question whether they need to pay into Taiwan’s national health insurance system. For example, the expatriate and his or her family already have private health insurance through their employer, or their assignment is on a short-term basis. They might have a preferred practitioner in one of Taiwan’s neighboring countries and only plan on using Taiwan’s health system in the case of an emergency.

According to the National Health Insurance Act, all foreign nationals with work authorization, an employment-based alien residence certificate, and employment contract with a Taiwanese company are required to join Taiwan’s health insurance system from the day they start work. The penalties for employees for not participating in the system range from NTD 3,000-15,000 (approx. USD94-470). Employers who fail to insure employees and their dependents may be subject to a penalty of double any premiums due, as well as potentially have to refund any of the employer’s share of the premiums the employee had to pay by his or herself.

In some cases, an entity outside of Taiwan will send a foreign employee to the island in order to fulfill a construction, sales or technical contract. This expatriate, who has an employment contract with, and is receiving a payroll from an entity outside of Taiwan, will be required to join the health insurance program within four months after receiving their alien residence certificate and work permit. Since the foreigner’s payroll comes from outside of Taiwan, he or she must apply for health insurance at a national health insurance office as well as pay the NTD 659 (USD 20) a month premiums. The government can in fact verify whether income is from a Taiwanese company by checking with the local tax administration.

It should be noted that expatriates who have private health insurance are still allowed to keep and use their policy if they join the national health insurance program. Many larger companies in Taiwan provide employees with additional health insurance via private insurance companies as an additional worker benefit.

For legal guidance on employment law in Taiwan, please contact Christine Chen.

Written June 9, 2009 By Christine Chen.