Health Insurance in Dubai is becoming obligatory, what does that mean for SMEs?

Health Insurance for your Employees

Of course the implementation of compulsory health insurance for employees is a fantastic advance. However, it leaves SME owners to foot a very large possibly unexpected bill. The first phase of the Dubai Health Authority’s compulsory health insurance cover came to an end back in October 2014 and involved approximately companies with over 1000 employees. The second phase ran from October and is to end in July this year and aims to ensure companies with 100-999 employees have organized basic health insurance for all staff. Phase three is targeting smaller companies with less than 100 employees later this year, aiming to finish mid-2016. Here is a quick guide to some of the regulations that may affect you and your company:

  • Employers are responsible for providing health insurance for their employees.
  • Employers must restructure their existing arrangements where necessary to meet the set criteria by the first renewal date after the implementation deadline based upon company size.
  • For workers earning less than AED 4,000 per month, the cost of the essential benefits plan (EBP) package is expected to be around AED 500-700 per year and can only be purchased from qualified Participating Insurers (PIs).
  • For workers earning over AED 4,000, it is at the employers discretion on which insurance company to use, given it has been granted a Dubai Health Insurance Permit. This group will be on the Enhanced Plan and employers are able to set benefit levels and special conditions as they choose.
  • An employer is entitled to cover all of its employees with a PI is desired. Or they may choose to cover lower salary employees with a PI and other employees with another insurance company.
  • Employers will not, however, be responsible for an employee’s dependents.

This could raise concerns for small companies with employees who have pre-existing medical conditions, as premium costs will considerably increase for those employees who earn over AED 4,000. Some small firms report the fear that these new legislations may force them into closure.
The aim of Dubai’s new concept is to ensure universal access to quality health care services and to expand its health insurance system by attracting quality market players and investment in the healthcare sector.

Financial penalties may be imposed on employers who do not comply with obligations under the new Health Insurance Scheme Law. Therefore, it may be beneficial to assess current health insurance plans to determine whether they are sufficient under the new law. Employers should also evaluate the cost of providing health insurance cover to their employees, to the company and the most effective options available. Do your research.

 

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