Only a quarter of small businesses in the UAE offer their employees health insurance – despite the fact that providing coverage for workers is now mandatory in Abu Dhabi and will shortly become compulsory in Dubai.
Twenty-four percent of small and medium-sized enterprises (SMEs) have enrolled their employees in health insurance programmes, while a further 24% said that they would be in the market for insurance in the next 12 months, according to a poll of 700 businesses in Abu Dhabi, Dubai and Sharjah, reported The National newspaper.
In addition, these SMEs do not plan to provide employee health insurance after the deadline for compliance with the law expires at the end of next June.
Currently, SMEs account for 86% of private-sector employment in the UAE. Because of the size of the SME sector, these figures suggest that large numbers of UAE workers do not get health insurance through their employers.
“SMEs remain significantly under-insured, either because they can’t afford to insure workers or because they have done a risk assessment and don’t believe it’s worth the investment,” said Mr John Katsabanis, the head of marketing at the consultancy Potential, which conducted the survey.
Under Dubai’s health insurance law, public-sector firms and private companies with more than 100 employees are required to provide their employees with health insurance in Dubai. Firms with fewer than 100 employees are required to do so by the end of June next year.
Companies that fail to provide health insurance by the relevant deadline could face fines of up to AED500,000 (US$136,138). The Dubai Health Authority has also said that it will refuse to issue or renew work visas to employees who do not have health insurance coverage. This would make compliance difficult to avoid.
In Abu Dhabi, health insurance became mandatory in a 2005 law. Companies in Abu Dhabi that do not offer employee health insurance can face fines of AED10,000 per worker.
AED1 = US$0.27