Types of Industrial Accident Compensation Insurance and How to Make Insurance Claims
Table of contents
What is Industrial Accident Compensation Insurance?
Insurance Coverage: Who is Covered by Industrial Accident Compensation Insurance?
Types of Industrial Accident Compensation Insurance Benefits and Their Amounts
Employment and Commuting Injuries: Injury/Illness Caused by Work and Injury/Illness Occurring While Commuting
How to Apply for Industrial Accident Compensation Insurance Benefits
Employers (such as companies) who hire workers are obliged to have Industrial Accident Compensation Insurance. This is a summary of types of Industrial Accident Compensation Insurance, eligible persons (who can make insurance claims), and how to make insurance claims, as well as other basic knowledge of the insurance that workers should be familiar with.
What is Industrial Accident Compensation Insurance?
Foreign nationals working in Japan are also eligible for Industrial Accident Compensation Insurance, which can cover their medical expenses.
An injury or illness that occurs at work or while commuting is called an “industrial accident.” The payment, or insurance benefits, provided by the Industrial Accident Compensation Insurance for treating work-related injuries and illnesses is called “compensation.” The insurance provides various types of compensation, including coverage for treatment and hospitalization expenses for injuries and illnesses, compensation for salary when employees are unable to work due to injuries and illnesses, and compensation for lasting disabilities.
The term ‘benefits’ refers to the money paid out. When this money comes from insurance, it is known as ‘insurance benefits.’ Specifically, these payments are called ‘kyufu-kin’ in Japanese. Some kyufu-kin benefits are one-time payments, while others are recurring, paid annually until no longer necessary. hese recurring benefits are known as ‘pensions.’ The act of paying out these pensions is sometimes referred to as ‘pension benefits.’
Difference Between Industrial Accident Compensation Insurance and Health Insurance
Public health insurance, which includes both health insurance and national health insurance, also covers the costs of treating injuries and illnesses. The differences between Industrial Accident Compensation Insurance and health insurance are as follows:
| Industrial Accident Compensation Insurance | Covers medical expenses for injuries and illnesses that occur at work or while commuting. |
| Health Insurance and National Health Insurance | Covers medical expenses for injuries and illnesses that are not related to work or commuting. |
Insurance Coverage: Who is Covered by Industrial Accident Compensation Insurance?
Industrial Accident Compensation Insurance is a legally mandated system, and any employer, even those with just one worker (such as a company), is required to enroll in Industrial Accident Compensation Insurance. The employer is responsible for paying all of the insurance premiums.
Generally, workers who are under labor contracts and are subject to the instructions or orders of their employers, based on a hierarchical relationship are covered by Industrial Accident Compensation Insurance. This includes all types of workers: part-timers, contract employees, dispatched workers, and day laborers, are eligible for Industrial Accident Compensation Insurance. In the case of dispatched (temp) employees, the dispatching agency (the company that sends them to work for other companies) s the one enrolled in Industrial Accident Compensation Insurance.
The compensation insurance can also be applicable to those working under subcontracting or outsourcing contracts if they are effectively considered as “workers” by the Labour Standards Act.
Typically, company representatives, executives, and self-employed individuals do not qualify as “workers” in this context and are therefore not eligible for Industrial Accident Compensation. However, they can opt into the insurance through a special enrollment system if they complete the necessary application procedures.
Types of Industrial Accident Compensation Insurance Benefits and Their Amounts
Types of Industrial Accident Compensation Insurance benefits
There are seven types of insurance benefits under Industrial Accident Compensation Insurance, as outlined in the table below. Additionally, there are benefits for secondary health examinations, among others.
| Medical (Compensation) and Related Benefits | Compensation for the treatment of injuries and illnesses resulting from work or while commuting. |
| Temporary Absence from Work (Compensation) and Related Benefits | Benefits for employees who are unable to work and do not receive salary due to injuries or illnesses caused by work or commuting. Benefits are payable from the fourth day of absence, with the amount typically being 60% of their average daily wage (basic daily benefit). Compensation for the first three days of absence is the responsibility of the employer (such as a company). |
| Injury and Disease (Compensation) Pension | This pension is provided after transitioning from (2) when an injury or illness caused by work or commuting does not heal even after one year and six months and is accompanied by disability of a certain level or higher. |
| Disability (Compensation) Benefits | Benefits (including pensions) are provided for injuries and illnesses resulting from work or commuting, which have stabilized symptoms and result in a certain degree of permanent physical disability. |
| Surviving Family (Compensation) Benefits | Pensions or lump-sum payments provided to a certain range of bereaved families in the event of an employee’s death due to an industrial accident. |
| Funeral Expenses etc. (Funeral Rites Benefits) | Partial reimbursement of funeral expenses for the individual responsible for the funeral in the event of an employee’s death due to an industrial accident. |
| Nursing Care (Compensation) Benefits | These benefits are for individuals who receive the Disability (Compensation) Pension or the Injury and Disease (Compensation) Pension and are currently receiving nursing care due to a severe disability. |
Not Everything is Compensated
The benefits of Industrial Accident Compensation Insurance are calculated based on factors such as the number of treatment days and wages. However, the insurance does not cover certain expenses (e.g., pajamas purchased during hospitalization). In addition, “consolation money” is not included in this insurance. Costs not covered by Industrial Accident Compensation Insurance and consolation money must be negotiated with the employer, and, if necessary, legal action may be required to claim compensation for damages. However, the employer’s obligation to pay arises only in the cases of a breach of its duty to ensure safety. It should be noted that not all amounts claimed will necessarily be paid.
Employment and Commuting Injuries: Injury/Illness Caused by Work and Injury/Illness Occurring While Commuting
Work-related accidents covered by Industrial Accident Compensation Insurance benefits are categorized into two types: “employment injuries”, which are caused by work-related activities, and “commuting injuries”, which occur during commuting.
Employment Injury
For an incident to be recognized as an employment injury, it must meet both conditions of being under the employer’s control and being work-related.
| Control by the Employer | The worker is under the control of the employer, such as a company, by virtue of a labor contract. |
| Work-Related Accident | The danger becomes a reality while the worker is under the control of the employer such as a company. |
[Example of Employment Injury]
- Injuries occurring during work
- Injuries occurring temporary interruptions of work (e.g., bathroom break)
- Injuries while preparing for or clearing up after work
- Injuries while on business trips
In addition to the above examples, psychiatric disorders, brain and heart diseases may be a work-related accident. If you think an accident may be work-related, consult with a labor standards inspection office.
Commuting Injury
Commuting injuries and illnesses are those that occur while commuting. For a commuting accident to be recognized as an industrial accident, the following conditions (1) through (4) must be met.
(1) Mode of Travel
- Travel between home and the workplace
- Moving from one work location to another
- Commuting between a temporary residence (a place lived in for work, away from family) and a family home
If a worker deviates from the normal travel route or interrupts and later resumes their travel, it is not considered commuting. For example, if a worker spends a long time drinking alcohol on their way home from work, the actions after drinking are not considered ‘commuting.’ However, actions necessary for daily life, such as shopping for essentials or going to the doctor, are still considered ‘commuting,’ even if they involve deviating from the usual route or interrupting the journey.
(2) Work-Related Travel
For ‘travel between home and the workplace’ or ‘moving from one work location to another,’ the employee must have been scheduled to work or actually worked, on the day the injury or illness occurred.
In the case of ‘traveling between a temporary residence away from the family and the family home,’ the travel must have been scheduled for the day before a workday, the day of work, or the next day.
(3) Traveling via a ‘Reasonable Route and Means’
This refers to routes or means of travel that are normally permissible for workers. A detour or a side trip is not considered ‘commuting’ unless it is for a reasonable purpose.
(4) Traveling Outside of Work
Accidents that occur during work-related travel are considered employment accidents. For instance, if a company arranges a bus exclusively for its employees and an accident occurs while traveling to work on that bus.
How to Apply for Industrial Accident Compensation Insurance Benefits
To receive Industrial Accident Compensation Insurance benefits, an application (benefit claim) must be submitted to a labor standards inspection office. Generally, instead of a worker or their family, the company fills out and submits the application (benefit claim) form to the labor standards inspection office. However, if the company does not undertake this process, workers or their families can complete the procedures themselves.
If you are injured during work or while commuting, or suspect that your illness is work-related, please first report to your company and consult about applying for industrial accident compensation benefits.
When applying for Industrial Accident Compensation Insurance benefits other than medical (compensation) benefits, it is necessary to submit an application form to a labor standards inspection office. The application format can be found on the website of the Ministry of Health, Labour and Welfare. If you have any questions, it’s advisable to consult with your labor standards inspection office.
Here is a summary of the general procedure for applying for industrial accident compensation benefits:
- Report the work-related accident to the company and consult with them.
- Complete an Industrial Accident Compensation Insurance benefits application form and submit it along with the necessary documents to the labor standards inspection office near your company.
- Investigation of the accident: The labor standards office will conduct an investigation into the accident.
- Payment of insurance benefits: If the incident is recognized as an industrial accident, payment will be made to your account.
If you visit a hospital before your industrial accident is confirmed, inform the hospital that it was an industrial accident. If the hospital is a designated ‘Industrial Accident Compensation Insurance medical facility,’ you can receive treatment under medical (compensation) benefits without any personal expense. If the industrial accident claim is not recognized after your visit, your medical expenses will be considered to have been covered by other means, such as health insurance. In this case, you will need to later pay the portion of the expenses not covered by health insurance.
If you choose a non-designated medical facility, you will initially need to pay the medical expenses yourself. If the accident is later recognized as work-related, these expenses will be reimbursed.
Search for Designated Medical Facilities | Ministry of Health, Labour and Welfare (mhlw.go.jp)
There is a statute of limitations of either 2 years or 5 years for filing a compensation claim, depending on the type of benefits, so it’s advisable to apply early. For more detailed information on the application process, please refer to the brochure prepared by the Ministry of Health, Labour and Welfare.
Japanese Insurance System
Foreigners living in Japan must have a pension and medical insurance (health insurance). If you show your health insurance card at a hospital, your self-payment will be reduced. This page explains pension, medical insurance, etc.
