Starting on August 1st, 2015, every company with 100 to 999 employees must have purchased medical insurance for their staff. This will mark the end of Phase II of ISAHD – the mandatory health insurance program introduced by the Dubai Health Authority in November 2013. Phase II of the roll out will affect an estimated 600,000 employees, here are some important points for companies in Dubai to consider:
How is it being enforced?
The issuance and renewal of residency visas in Dubai (including freezones) will be linked to medical insurance. The DHA is cooperating with the General Directorate of Residency and Foreigners Affairs so that employers have to provide health insurance to an employee before applying for a residency visa; otherwise the application will be rejected.
Who exactly does this affect?
The mandatory health insurance law requires employers to provide medical benefits to their employees only, and not their dependents. While an employee’s family will need to be insured by June 2016, it will be the responsibility of the sponsor (i.e. employee) to provide medical insurance for dependents and domestic workers.
What type of medical coverage do employers need to provide?
For employees with a gross salary of AED 4,000 or less, companies can purchase the Essential Benefits Plan, which costs around AED 650 (you can find out more in our article “A Detailed Look at Dubai's Basic Health Insurance Scheme”). Employers will need to buy a regular health insurance policy for employees earning more than AED 4,000 per month.
What are the penalties for companies that do not comply?
The Dubai Health Authority is under the process of issuing a list of penalties for companies that do not provide mandatory health insurance to their employees. While this list has not yet been finalized, Dr. Al Yousuf, a director at the DHA, has indicated that employers will be fined each month for each employee that is not insured.
Other penalties may include:
- Significant financial penalties
- Black listing
- Non-renewal of trade licenses
When do I need to buy health insurance?
If you are an employer that falls under Phase II of ISAHD (i.e. 100 to 999 employees), penalties will be imposed starting on August 1st, 2015. In other words, time is of the essence and you should get the process started as soon as possible.
What is the process for buying medical coverage?
For a company of over 100 employees, you should give yourself 3 to 4 weeks to go through the entire process if you want to be sure you are getting the best deal.
You will need to prepare a census of all your employees who you wish to insure as well as provide a copy of your trade license. The census should include their age, gender and salary. To simplify the process, bayzat lets you compare options from numerous insurance companies in the UAE – you can apply for group medical insurance by clicking here.
Is the new law working?
According to authorities, only 1.1 million residents in Dubai had health insurance when the law was introduced in November 2013. The latest count is that 2.3 million residents are now insured, so it seems that companies are in fact responding to these new measures.