Some foreign workers leaving South Korea are reportedly handing their foreigner registration cards and health insurance eligibility documents to people who stay behind. Those individuals then use the credentials to access medical treatment, or to obtain prescription-only drugs for export overseas.
That is the fraud mechanism identified in a National Assembly Budget Office report released on October 5.
Under South Korean law, National Health Insurance Service (NHIS) benefits are suspended while a policyholder is abroad, but suspension depends on a timely update to the member's status. Where that update is delayed, coverage can remain active after the worker has gone, and the gap between departure and suspension is where credential misuse occurs.
Foreign employees at Korean companies are enrolled as workplace-insured NHIS members from their first day of employment, with the employer responsible for reporting eligibility changes to the NHIS, according to Crowe Korea's November 2025 statutory social insurance guidance. That makes prompt reporting when a worker leaves a compliance point for employers with foreign workforces.
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The Budget Office report also highlights a separate issue: unpaid premiums from foreign nationals. Delinquent NHIS premiums from foreign nationals and overseas Koreans reached 37.5 billion won (US$27.9 million) at the end of 2025, according to The Korea Times. Over the preceding five years, 134,505 cases totalling 47.7 billion won were written off as uncollectible.
These are not premiums under active pursuit. They represent money the NHIS has stopped trying to recover, largely because the people who owe it have already left the country.
Unpaid premiums from foreign nationals rose 42% between 2021 and 2025, from 26.4 billion won. The number of households in arrears climbed 58.1% over the same period, from 21,728 to 34,349. Foreign nationals account for 33,725 of those households, owing 34.4 billion won of the outstanding total.
Arrears of this kind typically build up among members who pay their own premiums as individually enrolled residents, rather than among workplace-insured employees, whose premiums are deducted through payroll.
The NHIS has expanded enforcement across its wider delinquent base. Property seizures for overdue premiums rose 67% between 2021 and 2025, but revenue recovered through those seizures fell by nearly half over the same period, as IB has previously reported. The foreign national data reflects a specific part of that problem: debt that becomes unrecoverable once a member leaves the country.
The Budget Office has called on authorities to strengthen premium collection before foreign nationals depart, and to build a real-time monitoring system that suspends coverage as soon as residency status changes. That would address both problems at once: closing the window for credential misuse and stopping arrears building up before departure.
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South Korea's foreign resident population passed 2.8 million in October 2025 for the first time, about 5.5% of the national population, according to Ministry of Justice figures. Of those, 1,109,000 were employed as of May 2025, the highest count since Statistics Korea began tracking in 2012. Medical expenses for NHIS-covered foreign nationals reached about 1.6 trillion won in 2024, up 68% from 948 billion won in 2019.
Rising use of the system alongside rising arrears suggests the NHIS's enrolment and exit controls are not keeping pace with workforce mobility.
For employers with foreign workforces in Korea, the immediate point is compliance. Reporting departures to the NHIS promptly closes the window the Budget Office identified, and is part of the employer's statutory obligations. Brokers and advisers placing supplementary group health cover for those employers can raise it as part of wider workforce risk conversations.
The wider context is a public system under pressure. According to the OECD's Health at a Glance 2025 Korea country note, only 60% of health spending in South Korea is covered through mandatory prepayment schemes, against an OECD average of 75%. That gap already drives demand for private and supplementary health cover in Korea. The NHIS's collection and control problems are unlikely to reduce that demand.
