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DHA talks fines for companies eschewing mandatory health insurance
Posted on Aug 24, 2015 by Rob McBroom
Health insurance experts at UMI take a look at the recently reported fines for companies in Dubai who have not already enacted health insurance that meets the now mandatory DHA requirements.
As you no doubt know, the Dubai Health Authority (DHA) has been steadily integrating their plan to ensure that all workers in the city have a viable health insurance plan. With stage two being officially put in place on August 1st, 2015 this initiative has become one of the most, if not the most, important administrative detail that businesses in the Emirate need to be aware of. After all, the idea behind mandatory health insurance is just that: It is mandatory, and business owners need to ensure that their staff all have health insurance or their will be consequences.
With the official adoption of Stage two of the mandatory health insurance initiative, companies with between 100 and 999 employees are now required to provide health insurance for all employees. As was reported in a post by Pacific Prime earlier last month, employees who wish to secure a visa now need to show proof that they have health insurance that meets minimum coverage requirements set by the DHA.
To some, 'mandatory' hasn't quite sunk in yet
This being a mandatory initiative, it would be easy to think that all companies that meet the current and previous health insurance requirements have already ensured that health insurance has been secured for their employees. The thing is, a recent article published in The National has found that despite the fact that almost every employee in Dubai should now have health insurance, some companies are not actually complying with this.
According to the article, "a small number of companies in Dubai were yet to sign up to the scheme and would be contacted and hit with a penalty notice." This ominous warning highlights that the DHA is serious about the reform. However, no word has been officially handed down as to what the severity of these fines will be, with the article quoting Dr Al Yousuf, director of health funding at the DHA, as saying, "The penalties will be greater than the cost of the insurance, so it will make sense for them to comply with the regulations. They have already passed the deadline, so the longer they spend without insurance, the greater the penalties will become. If they are still not responding, we will refer them to the licensing entities to withhold their licence.”
In other words, if you are one of the companies considered to be within stage 1 and stage 2 of the mandatory health insurance scheme who has not implemented health insurance, you can be sure that someone from the General Directorate of Residency or Foreigners Affairs will be contacting you in the near future.
As mentioned above, the fines are fairly ambiguous and, as of the writing of this article, we are unaware of any companies who have been fined. That being said, Colin Ward, Corporate Sales Director at UMI, who has been working in health insurance in Dubai since 2006 talked about his experience with past initiatives and the related fines. "In my experience, when the UAE says "heavy" fines they are talking tens of thousands of dirhams or more. I remember when the HAAD mandatory health insurance initiative went live back in 2008 and I recall seeing one such fine for non-compliance which was AED50,000."
He continued, "A figure such as this may seem like a drop in the bucket for large companies, but for smaller companies this could be enough to push you into the red, especially when it comes to the fact that you will still need to secure health insurance and likely pay the fine which, as stated in the article, will be more than the cost of health insurance and will increase the longer you wait."
The good news is, if you have followed the DHA regulations from the get-go and have implemented a compliant health insurance plan when required, you will be ok. If you have not implemented health insurance and fall into one of the two current stages, then we highly recommend you contact us today. In addition it is also worthwhile reviewing your current arrangements to ensure they are compliant with the law. Our experts can work with you to find the best insurance package for your employees that are not only DHA authorised, but also meet the minimum requirements.