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Surprising number of Dubai employers have yet to obtain health insurance
Posted on Nov 22, 2016 by Travis Jones
Despite the fact that Dubai's healthcare reform law came into force on June 30th, 2016, some individuals and businesses have been slow to take up the required health insurance, and time is running out. Here, UAE Medical Insurance discusses the reasons behind why so many may not be obtaining health insurance, as well as what the consequences will be if they never do.
The clock is ticking, and time is running out. No, we’re not talking about the coming holiday season or even 2017. In this case we’re talking about the end of the grace period for the new Dubai healthcare reform law, which came into effect on June 30th, 2016. Under the law, every person living in or even visiting Dubai needs to possess their own private health insurance, or else risk a penalty. Some have been slow to adhere to the law, though. Here, UAE Medical Insurance discusses just how many people are currently without insurance, as well as what could happen if a person or business fails to obtain the proper insurance coverage.
It has been reported that 12% of the target population – about 400,000 people - still does not have insurance coverage. Predominant among this group are individuals who are supposed to be provided with health insurance through their employers. Unfortunately for them, their employers have been slow on the uptake of health insurance for their employees, which will present both parties with a problem at the end of the year if no action is taken.
So what is the reason for inaction on the part of employers in Dubai? Is it a statement by businesses that are upset due to the new health law being imposed upon them, or are employers simply opting to pay the fines rather than the cost of health insurance premiums? Neither one of these options is at all likely, as the cost of the fines that will be levied upon any person or business that does not comply with the law will be higher than the cost of the health insurance itself.
No, in fact the most likely reason to explain the situation is a generous helping of procrastination combined with a hint of penny pinching. Some people will simply not act until the last moment, and still others are going to take advantage of not having to pay for health insurance for as long as they can get away with it just in order to bolster their bottom line. Needless to say, people in both of these camps will likely have purchased insurance by the time the grace period ends, with stragglers quickly following after they get struck by the first wave of fines. Furthermore, the government has stated emphatically that there is no additional extension of the grace period. It’s really becoming time to either purchase insurance or pay the piper.
What kind of fines are we talking about here? While the basic health insurance plans available address the government’s requirements and cost AED 550 per person per year, the fines themselves will cost AED 500 per month. It would certainly stand to reason that employers would rather pay AED 550 in 2017 than AED 6000. These figures also show that it will likely be that employers will be incentivized to continue covering their employees, even if health insurance premiums were to rise substantially. Especially when it is considered that these fines will apply to every employee on the payroll, as well as those employees’ dependents. It’s easy to see how some serious fees could be racked up rather quickly.
We're all in this together
For those that may question why everyone in the country should be required to obtain health insurance anyway, there are many good answers to that, but the number one reason is probably that a public mandate for health insurance doesn’t work properly unless everyone is in the risk sharing pool. Only by keeping everyone insured can the insurance companies keep the costs of their offerings low while still covering expensive pre-existing conditions. This is because the risk of expensive healthcare inherent to certain demographics, such as the elderly, can be offset by those that are young and healthy. Some may argue that this isn’t fair to those that don’t often make use of health insurance, but you never know when you might need health insurance, because a critical illness of some type may just rear its ugly head when you least expect it. Even the young aren’t invincible.
If you happen to work for an employer that has yet to obtain health insurance coverage for its employees, as is mandated by Dubai law, keep an eye on December 30th, as this is the last day that the grace period ends for those that have not yet obtained insurance. Also, be wary about unscrupulous businesses that could potentially try to pass the cost of the health insurance onto their employees. The law specifically states that this is illegal, and any attempt to circumvent it should be reported to the government.
Finally, if you still need to purchase an approved health insurance plan for yourself or for others, it would be wise to make the whole process easier on yourself by utilizing an insurance brokerage like UAE Medical Insurance. Not only can our agents present you with an array of options based on your specific needs, they can also give you a free price quotation. Contact us today and make sure you’re covered before any fines are given out.