Mandatory Insurance Grace Period Coming to an End
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Mandatory Insurance Grace Period Coming to an End

Despite the new Dubai health insurance reform coming into effect on June 30th, 2016, people and companies in the emirate still have time to obtain medical insurance before they get fined. Find out more here.

The end of the year is nearly upon us now and, as some might say, the chickens are coming home to roost. This idiom may be peculiar to some, so to spell it out for everyone, the roost in this metaphor is Dubai, and the chickens are the penalties that will have to be paid by those in the emirate that do not have health insurance. This all comes after a new law was introduced in Dubai that has upended the way that health insurance in the area works. Read on to find out more about the situation and how it may affect you, especially if you do not currently have health insurance.

The law

Countries in the Middle East are catching up to many other countries when it comes to ensuring that their citizens have access to affordable healthcare, and the United Arab Emirates are no different. In fact, Abu Dhabi has had a law in place making it mandatory for employers to provide employees with insurance since 2006, and the law only expanded from there. Following Abu Dhabi’s lead, Dubai enacted its own mandatory health insurance reform law. The law provides that employers all across Dubai arrange and pay for health insurance for their employees and their employees’ dependents. Those that do not have employer sponsored health insurance are required to arrange private health insurance for themselves and their dependents. Additionally, domestic helpers must also have insurance provided for them by their employer.

The law was rolled out in stages, starting with the largest employers and then progressively rolling out to smaller companies, and then individuals. Finally, as of June 30th, all people in Dubai, whether they are residents or visitors, are required to have private medical insurance. The law even goes so far as to prohibit entry to the emirate by uninsured individuals.

The reasons for implementing such a law are varied. The main argument, of course, is an ethical one, as making sure that people have access to healthcare that won’t break the bank is simply good sense. Beyond this, making it mandatory for all people in the emirate to have insurance is necessary to guarantee the solvency of the system. Whereas insurance companies are being depended upon to support the whole system, only by making sure that young, healthy people have insurance can we be sure that funds will be there for insurers to address the costs of taking care of the chronically sick and elderly.

Grace period and penalties

While the law did, indeed, take effect on June 30th, 2016, the government of Dubai saw fit to give employers and individuals alike time to adjust to the new system, which was generous given that there was much forewarning and public outreach concerning the law for a great deal of time prior to it being enacted. Per the government’s arrangement, no penalties would be levied upon uninsured people or organizations for 6 months, thereby making the first day of 2017 the day that insurance ultimately needs to be obtained. This means that fines are coming down the pike for many soon, so it’s time to get serious about purchasing insurance for those that have yet to do so.

This is due to the substantial costs associated with non-compliance with the new law. The government has made it clear that it simply does not make sense based on the cost of health insurance premiums vis-à-vis the level of fines incurred. The lowest annual premium for an individual’s health insurance that meets the minimum requirements are set forth by the Dubai government comes to AED 550 annually, while the fines for each uninsured individual will accrue at a rate of AED 500 monthly. It doesn’t take a math wizard to see that cost of non-compliance can quickly become a burden to those responsible, as two months of fines will already be significantly higher than an entire year’s worth of insurance coverage.

The next step

As it stands, it has been estimated that 12 per cent of people in Dubai are still without health insurance. And while some individuals are responsible for this figure being as high as it is, the majority of it is employers that are waiting until the last moment to secure medical insurance for their employees. No doubt this trend is caused by company’s doing what it takes to help their bottom line, but as was mentioned above, the time is quickly coming that the best way for a company to protect their bottom line is to purchase insurance. Specifically, December is the month that this insurance must be obtained in order to avoid being fined.

With that being said, buying a group health insurance plan is no laughing matter, and it simply is not done in a day. For this reason, companies should act quickly to ensure that they not only have group medical insurance in place by the end of December, but also a plan that works for them and makes sense for their employees.

The best way to quickly and efficiently obtain health insurance, especially for something more complex like group insurance, is to utilize the services of an insurance broker like UAE Medical Insurance. They can quickly present you with options from a number of insurance providers that are custom tailored to your needs; and that’s just the tip of the iceberg when it comes to the value added services that we provide. For more information on plans and pricing, and to make sure that you get insurance that is compliant with Dubai law before fines begin to be given out, contact us today!


UAE-Medical-Insurance is owned and operated by Pacific Prime Insurance Brokers LLC who is regulated and licensed by the UAE Insurance Authority (license number 266).

Registered Office: PO Box 391195, Dubai, UAE