Health insurance premiums increase drastically after company stock options are sold... Court revokes orders below 50 million won (Korea)

A South Korean court ruled that employees of venture companies who exercise stock options cannot claim compensation for losses of up to 50 million won (approximately 5.71 million yen) per year from the National Health Insurance.
Stock options are the right that employees have to purchase company stock at a set price in the future.
If the stock price rises, employees can use this right to buy shares below market price and then sell them at a profit.
According to a Korean legal professional on the 15th, the 5th division of the Seoul Administrative Court recently ruled that venture company A had filed a lawsuit against the National Health Insurance Corporation.
The court ruled in favor of the plaintiff in a lawsuit brought against the Insurance Corporation of Japan to overturn the decision to impose national health insurance premiums.
In May 2022, 14 employees of Company A exercised their stock options and received at least 24 million won and up to 8,000
The National Health Insurance Corporation calculated the employee's compensation including all of the exercise profits and then imposed national health insurance premiums and long-term insurance premiums on Company A.
Company A considers that the profits earned by employees exercising stock options, up to 50 million won per year, are non-taxable income under the Income Tax Act.
The Enforcement Order of the National Health Insurance Law stipulates that non-taxable earned income under the Income Tax Law should be excluded from "remuneration," which is the basis for calculating insurance premiums.
Generally, the profit from exercising stock options is subject to income tax, but in the case of stock options granted by venture companies, the "Tax Exceptions Limitation Act" limits the profit from exercising stock options to 5,000 yen.
On the other hand, the National Health Insurance Corporation is not taxed on income under the Tax Special Restriction Act, and the amount is called "tax-exempt earned income" under the Income Tax Act.
The court argued that the full amount of the exercise profit should be included in the compensation. The tax-exempt income under the Special Taxation Act and the tax-exempt income under the Income Tax Act should be considered separately.
The court supported A's argument and ruled in their favor. The meaning is that non-taxable income under the Taxation Special Limitation Act should also be considered as non-taxable income under the Income Tax Act.
The court said, "The Tax Special Limitation Act is considered a special law of the Income Tax Act, and the Income Tax Act does not include provisions that include the amount of tax-exempt earned income under the Tax Special Limitation Act as the amount of tax-exempt income under the Income Tax Act.
"The 'tax-exempt working income under the Income Tax Law,' which must be excluded from the remuneration used as the basis for calculating national health insurance premiums, includes tax-exempt working income under the Special Taxation Exemption Law,"
"If the Enforcement Order of the National Health Insurance Act was intended to exclude non-taxable income under the Special Taxation Act from non-taxable income under the Income Tax Act, then in the general legal system,
"The text would have clearly specified and limited the specific provisions of the Income Tax Act on non-taxable earned income," he added.