Dubai deadline for mandatory health insurance has companies and insurers scrambling

Despite regular information bulletins and deadline extensions for compliance, some companies have waited until the last minute to obtain health insurance for employees.

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DUBAI // Understaffed insurers and a deluge of last-minute applications from small businesses has caused a bottleneck before tomorrow’s deadline for all workers to be covered with health insurance.

“There has been big pressure on insurers and their workload to get everyone through and processed before the deadline,” said Stephen Maclaren, a senior executive at insurer Al Futtaim Willis.

Mandatory health insurance for employees has been phased in over three years by the Dubai Health Authority.

The Dubai Health Insurance Law that came into effect in January 2014 introduced a legal liability for every sponsor to provide an essential benefits package, which costs between Dh550 and Dh750 a year.

This week, it was announced that 99 per cent of businesses had employees insured, with the rest scrambling to get cover before the March 31 cut-off or face fines of Dh500 a month.

Dubai’s population is almost 2.8 million, but about 4.3 million people should be covered because many employees with Dubai visas live in other emirates and companies registered in Dubai can have staff who only work there for short periods.

“Insurers have also discovered there were a lot more people needing insurance than anticipated,” Mr Maclaren said.

“There are lot of people in Sharjah and Ajman commuting into Dubai and that has added extra pressure to the system.”

There has also been a discrepancy between the plans offered by some employers and their employees’ expectations.

This has led to confusion as to which benefits the sponsors pay for, and which to omit.

Expert advice has been offered to businesses by Bayzat, a technology company providing insurance and HR solutions.

Vice president of sales Hassan Erakat said it would have been difficult to anticipate the amount of applicants because many sponsors waited until the last minute.

“Our heaviest traffic came in the last two weeks of December and again in these past few weeks,” Mr Erakat said. “That’s a factor no one could have expected. Insurance companies were not properly staffed for the amount of applicants coming down the pipe.”