More on the “Free Choicers” (Free Riders?) in the Japan expat health insurance debate

This is inspired by the recent discussion on the Japan immigration bureau’s prospective checking to make sure that visa renewers here in Japan are enrolled in an acceptable insurance program.

Again, the acceptable ones are National Health Insurance (kokumin kenko hoken) or the employer health insurance (kosei kenko hoken) portion of Social Insurance (shakai hoken). Someone also mentioned about certain health cooperatives, which not a lot of people discuss. These are rare but the strong indication is that they count, too.

The ones that are suspect are the private “gap” insurers. Even if they are “approved by the Japanese government”, it is really to sell insurance on the part that the regular insurance doesn’t cover (usually 30% of the charge and any specifically excluded charges).

Gap insurance is legal. But this means if you want coverage for the part of health insurance that is the 30%, the co-pay, then this is what you would cover through gap insurance. But everyone resident in Japan (here more than 90 days) is required to have a real health insurance—a kokumin kenko hoken or the health insurance portion of shakai hoken.

An e-mail came to me about the Free Choice Foundation website. Somewhere on there, according to the mail, “Keiko Chiba [the new Minister of Justice] is willing to discuss this issue”. The immigration bureau is under the Ministry of Justice, and so I guess this is what they are getting at.

When I popped into the site the other day, though, I didn’t see anything about Minister Chiba endorsing or even dialoguing with the Free Choice Foundation. (That “Foundation” part still cracks me up—I have got to see that building some day before my years are by. I still think the “Foundation” is a corner of the guy’s apartment.)

What Ron Kessler is putting out is that he apparently contacted a member of the House of Councilors (the upper house here in Japan), and that member agreed to be an intermediary between Ron’s group and the Ministry of Justice. This either happened before the election or shortly after, but the sense I get is that it happened before—because the turnover on a request like that is probably not just two weeks.

So right away, I don’t think that Minister Chiba has a clue about what the issues are that the Free Choicers are pushing. Minister Chiba has only been minister for a week-and-a-half. And I doubt some underling is going into her office saying, “Minister, the Free Choice Foundation people need your assistance!”

But this could, in fact, turn into something serious. Because Ron Kessler points out that he received a TWO page letter from the House of Councilor member. Not just ONE page. So you know this is something serious when they go to that second page. This isn’t just “thank you for your concerns”, which would easily just fit on just one page.

So let’s go with this a bit.

Minister Chiba has oversight of the immigration bureau, which would concern people’s visas and whether they get one.

But Minister Akira Nagatsuma, a/k/a “Mister Nenkin“, who I’ve written about before, is the new Minister of Health and Labor. And special minister for the “pension issue” (the fact that the records are screwed up and, again, that people haven’t been paying).

OK, so here it is: Minister Chiba has a reputation for being lenient on the illegal immigrant issue, according to Ron. The takeaway from that is that Minister Chiba is going to go light on the directive to kick out people who don’t have the proper health and pension enrollments.

BUT Minister Nagatsuma (remember, “Mister Nenkin”) is the head of the Health and Labor ministry. The key issue here is that people have been cheated out of pensions, and that the health insurance system of Japan must be reformed to expand coverage and make the payments more equal.

How likely is it that Nagatsuma is going to agree that it’s OK to let resident foreigners slide like in Ron Kessler’s olden days?

Not likely at all, right? The minister expressly pointed in his inaugural address that it is time to clean the “grime and pus” out of the ministry. For Americans, this might be translated as Perot’s, “time to clean the shit out of the barn”. Or President Truman’s “the buck stops here!”

Mister Nenkin is not messing around. Seriously. For sure.

So you can see where Minister Chiba, on Ron Kessler’s sunniest of days, might decide that people can have their visa anyway—even if they don’t follow Japan’s rules. And Minister Nagatsuma’s people will insist that the people be enrolled in the pension program and legitimate health insurance in any event.

(Leaving aside the issue of non-enrollments of foreigners in shakai hoken, which I would hope the Minister would also quickly address.)

The clear end-result in this scenario is that people might get their visa renewed, but, additionally, they will be required to be in the proper pension and health insurance. I don’t see any other way the new Minshuto-led government could resolve that question and still keep its campaign pledges.

So the bottom line, if you listen to the Free Choicers’ talk about the new DPJ government, is that you still would want to enroll in the correct things, even if you can’t pay it all up by the day you submit your application for renewal.
You would want to show that you are doing the correct and respectful thing, even if your employer or other people aren’t. Right?

Anyway . . .

Oh, oh, I want to say this, too: About the “lifer” gaikokujin here, they tend to live in their own special world. AND, they don’t seem to have a good sense anymore about their home country. In some cases, they seem to forget where they came from. In others, they don’t think the home country’s rules apply to them anymore. This is just saying in general—not about the Free Choice guy, who I’ve never met.

With the lifer-jin, the line is usually the same: “Look it, I’ve been around here a lonnnnnnnnnnnnnng time, and I know the Japanese MUCH better than you!” Like somehow there is no learning curve with Japanese society. Or, they will bring up how it used to be way, way, back-in-the-day. As if it will always have relevance to any issue of the moment.

Like on this pension/insurance thing. The government just changed. That means the Japanese people want NEW people making DIFFERENT decisions about things. So what good is arguing how things used to be? Isn’t that a little disrespectful of the latest polling results out of the election booths?

But I digress.

Back to the lifers.

I am surprised at how I am still shocked when I hear something some out of an American who has been here a long time. I really think these people forgot they are an American, and that America is still their country. There is no Gaikokujin-i-a. Gaikokuland.

“Lifers” who fail to file a tax return. This astounds me. (Not just because I am a CPA).

An American must file a tax return annually. This is your obligation under our law. Your common exceptions are if you earned under a certain amount of income (I think it’s $8,950 for 2008 but you can check) or if you’ve paid in so much that you would get a refund.

Years with no filing are always open when it comes to an IRS audit. (It’s like the old Denny’s Restaurant signs: “Always open”.) Otherwise, the IRS has 3 years from the filing or due date (whichever is later) to come at you for a deficiency. Unless there is material underreporting on the return. Then the IRS gets more time.

A foreign corporation that you own ( a one-yen “K.K.” for example ) may be a “controlled foreign corporation”. In those cases, there are special tax rules.

For self-employment tax (the social security tax for people who make self-employment income): Unless you have a J/USA6 form exemption, your self-employment income in Japan is subject to 15.3% tax in America, up to the social security limit for that year. I think the J/USA6 just helps you after October 2005, when the totalization treaty became effective. Before then, if you haven’t filed, technically you still owe that tax. Plus penalties and interest.

This one cracks me up:

Of course, the Foreign Earned Income Exclusion is legitimate. In fact, for 2009, the exclusion is over $90,000. $91,400, I saw. But you only get this exclusion IF you file.

There are Americans here who have twisted this into, “if you don’t make $80,000 (the old limit) then you don’t have to file!” No! No! That’s wrong! You have to file to get the exemption! If you don’t file, you don’t the exemption. And plus the year is always open to IRS audit.

You won’t be taxed (for income tax) on the first $91,400 because you file and claim the Foreign Earned Income Exclusion (Section 911). So you put your earned income in line 7. And then you claim your exclusion in line twenty-something (filling out form 2255 or the EZ version). Then, now, your tax is zero—provided you only had that wage income and not anything else.

If you don’t do that, the tax is due in America, and chances are your Japan tax credits don’t cover it. So stupid! But a number of “lifers” here forget where they came from.

A report referred to as “F-BAR” must be filed by every June of the year after you controlled accounts outside of America with a combined balance of $10,000 or more, at any time in the prior year. “Controlled” is its own defined term.

A lot of people blow that one off.

There are numerous laws going into a foreign corporation (which would be a kabushiki kaisha or K.K. here) doing business back in America. Usually, at one point or another, it requires a Form 1120 to be filed. A lot of small potatoes people doing business here ignore this.

American corporate officers of big American multinational corporations seem to feel that they are exempt from the laws of Congress, for one bullshit reason or another. That, frankly, is another post.

So like I say—and not going specifically to any one “lifer” gaikokujin—but a number of these people are really in their own world.

I myself am not a “lifer” and I think mathematically at this point it might be hard to spend the majority of my life in Japan. This means I know a lot more about the outside world than the “lifers” here do.

They hate when I point that out.