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Companies that have not complied with Dubai's new health insurance law could face early penalties, says expert

Large Dubai-based companies that have not yet complied with their duty to provide a basic level of medical insurance to their employees could face financial penalties and visa sanctions, an expert has said.

The new law came into force in February and its requirements will apply to all companies on a staggered basis dependent on size. Ahead of the 31 October 2014 deadline for firms with 1,000 employees or more, Dubai Health Authority (DHA) director general Essa Al Maidoor said that some employers did not yet comply with the law.

"This is a major milestone in ensuring access to healthcare," Al Maidoor said. "This phase of implementation applies to approximately 700,000 employees in Dubai. By mid-2016, everyone in Dubai will have mandatory access to health insurance."

"So far, we are pleased with the results of the roll-out and are thankful to all those employers who have supported us by adhering to the deadline, however there are still some employers who have not yet met the deadline and we urge them to act promptly," he said.

According to DHA figures, approximately 60-70% of large companies had either completed or were in the process of completing their registration as of the start of last week. Companies that do not comply with the new requirements could be fined, while the provision of medical insurance will also be linked to the visa application and renewal process for new and existing employees.

The Dubai Health Insurance Law No. 11 of 2013 was finalised in November 2013 and requires all employers operating in Dubai to provide their employees with minimum levels of medical insurance. The requirements come into force by the end of July 2015 for employers with 100-999 employees; and by the end of June 2016 for employers with fewer than 100 employees.

Under the new law, medical insurance companies which intend to provide cover to Dubai employers must apply for a DHA permit. The insurance policies that they provide will also have to comply with the legislation and with DHA requirements. Only approved insurers can provide full plans, while companies with 'participating' status are able to provide basic plans for low-paid workers.

Employment law expert Luke Tapp of Pinsent Masons, the law firm behind Out-Law.com, said that it was "surprising" that such a high proportion of large employers had failed to meet the 31 October deadline.

"The list of 'approved' and 'participating' insurance companies was published in April of this year and the 31 October deadline has been on the horizon for several months," he said.

"The mandatory insurance requirements will be rolled out to smaller employers over the next two years. Therefore, it will be important for the DHA to be robust at this stage to ensure that the policy is properly implemented by all Dubai-based employers going forwards. I expect it to use a combination of financial penalties and visa sanctions to encourage those companies that have failed to comply," he said.

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