Choosing the Right Employee Insurance Coverage in the UAE

insurance for employees in uae

The insurance for employees in UAE is a key aspect of the management of the country’s human resources. The reason is not only to comply with legal obligations. It also contributes to the motivation, satisfaction, and retention of talents. There is a real challenge and that is choosing the right coverage for your company. In the United Arab Emirates, you can find a multitude of different types of insurance available on the market. Each one, with different benefits, characteristics, and costs.

In this article, we will help you choose the most suitable insurance for employees in UAE coverage for your company. The first thing is to study different aspects, which must be taken into account. For instance, activity sector, payroll size, budget, risk profile, and preference of your employees. In addition, we will explain how to compare the different insurance options. Finally, you will see all the programs and initiatives that the government has with these issues.

Legal Requirements for Employee Insurance in the UAE

insurance for employees in uae

There is currently no labor law in the UAE that requires employers to provide employee wellness insurance. However, the issue of compulsory health insurance is a matter of discretion for the emirate authorities. For this reason, Abu Dhabi and Dubai are the emirates with mandatory health insurance laws for employees.

Thus, the law requires employers and sponsors to provide health insurance to their employees. On the other hand, emirates like Sharjah, Umm Al Quwain, Ajman, Fujairah, and Ajman have no laws regarding compulsory health insurance. Now, we will introduce you to everything related to compulsory health insurance in Abu Dhabi and Dubai in more detail.

Abu Dhabi: The law requires the employer to provide health insurance coverage to the employee. In addition, it is also mandatory to provide your family, which includes your spouse and up to a maximum of 3 children.  In Abu Dhabi Health Insurance Act No. 23 of 2005, you will find everything regarding this. It clearly states that health insurance is mandatory for employers.

Dubai: In 2023 the Dubai Health Authority passed legislation making health insurance mandatory for people living in Dubai. Under the law, employers or visa sponsors must provide health insurance coverage. In addition, the health insurance must have the minimum benefits stipulated by the DHA to the employee or the person who is sponsored.

Mandatory employee Insurance laws in the UAE

In the UAE, Different regulatory bodies administer public health services. Among these, you find the Ministry of Health, the Dubai Health Authority, the Abu Dhabi Health Authority, and the Emirates Health Authority. Both companies and individuals need to have a good understanding of the legal conditions when applying for health insurance in the UAE.

The progress of the UAE regarding health insurance systems can be seen in the year 2013 when a federal law was written solely for this purpose. If you look closely, it is only mandatory in Dubai and Abu Dhabi, while in the other emirates, it is not. The Dubai health insurance law in 2013 was influenced by the Dubai Health Care Advancement Insurance Scheme.

For the year 2016, the government gave its support to the implementation of compulsory medical coverage. All this is for all employees of small and medium-sized companies. In addition, according to the labor laws of the UAE, you have the right to a health card. This gives you access to a wide variety of clinics and hospitals that are Dubai Health Authority facilities.

The Dubai government is the one that issues the health card. Granting the holder, the right to receive affordable medical treatment at government hospitals in Dubai. In addition, it is a requirement that the employer or employing company must cover health insurance. The law also clarifies that the employer does not have the right to make deductions from the employee’s salary so that he can comply with his legal obligations.

Government Initiatives for Employee Insurance in the UAE

One of the initiatives by the UAE government is the unemployment insurance scheme. In this way, residents and Emiratis working in both the federal and private sectors receive financial support in the event of losing their jobs. All this is a result of a layoff by their employer. To guarantee a dignified life for the unemployed,

The employee will have access to this financial support in exchange for monthly insurance premium that the worker pays during his employment. Those workers who have a basic salary of AED 16,000 or less must pay AED 5 monthly. Which translates into about AED 60 per year, obtaining compensation that does not exceed AED 10,000.

On the other hand, those with a salary above AED 16,000 must pay AED 10 per month, which translates to AED 120 per year. In this category, the compensation should not exceed AED 20,000 per month. Additionally, the employee can decide whether to pay the premium on a monthly, quarterly, semi-annual, or annual basis.

In coordination with the insurance company, the employee may subscribe additional benefits to the aforementioned basic package. For this reason, it is important to know about the insurance policies for manpower in Dubai and blue-collar worker insurance. In addition, the value of the insurance policy is subject to VAT.

Public-Private partnerships in Employee Insurance programs

Among the alliances, you can find a contractual relationship between one or more government entities and one or more Industries belonging to the private sector, where each of the parties plays a role. Which are part of a development framework. In addition, this is an initiative that is unique and pioneering in the region, where the main companies of the private sector are involved.

In this way, companies participate actively in the preparation and design of the future of the UAE. Finding areas such as health, education, construction, transportation, and the environment. One of the ways to make large-scale investments in social and economic infrastructure is where the private sector assumes part of the responsibility and risk of design, financing, and operation.

Meanwhile, the public sector is in charge of supervising and regulating the performance and quality of the services. If you want to participate in this, you must take into account that there are legal and regulatory requirements. These are set by the relevant government entities, which can change depending on the sector and the emirate you are in.

In addition, you must participate in a public bidding process for most project cases. However, if the project was created exclusively by your company, the above will not be necessary. The reason for this is to ensure transparency, fair competition, and the public interest. Finally, you must demonstrate technical capacity to be able to assume all the risks of the project.

Steps to Implementing Effective UAE Employee Insurance

insurance for employees in uae

No employee belonging to the private sector is exempt from this new law, state government, or federal government. However, there is an exception for investors, that is, the owners of the establishments in which they work. In addition, there are domestic employees, contractual employees, minors under 18 years of age, and retirees who are pensioners who have joined a new employer.

It is important to clarify that this plan does not currently apply to employees of the free zones of the UAE. However, this does not mean that it can be applied in the future. At present the policies have contributions that are static. If the monthly basic salary is AED 16,000 or less you pay AED 5 per month and if you earn more than this, you must pay AED 10 per month.

These two modes are known as Category 1 and Category 2 contributions. On the other hand, those employees who have commission salaries can choose either of these two categories. If an employee wishes to sign up for this plan, they must do so online through Dubai Insurance. When doing this you will need to provide your Emirates ID and your mobile phone number.

To pay for this subscription you must do it through various channels. Among them are banks, ATMs, online, and many more. In addition, these payments may be made monthly, quarterly, semi-annually, or annually as decided by the beneficiary of the insurance. On the other hand, the providers of this service are private insurance companies authorized by the Central Bank.

Enforcement Mechanisms for Mandatory Employee Insurance

Currently, there are many application mechanisms for insurance for employees in UAE. It is important to know that companies in the UAE must implement these mechanisms in their policies. Next, you will see a description with details about this process.

Register employees: All employees must be registered, regardless of whether they are residents or Emirati. Companies in the private sector or the federal government sector must register all workers. This registration must be done in the unemployment insurance scheme, of course, taking into account certain exceptions.

To register, you have to visit the ILOE Insurance Pool website. In the portal, look for the Subscribe button to access the registration page. Subsequently, you have to select the option to start a company session and enter the company data. Once you are in your session, you have to enroll all the employees that are on the payroll, selecting the sector to which they belong, that is, the federal government sector or private sector.

Pay the monthly premium: Every month, you must pay a monthly premium of 0.5% of the employee’s base salary to the Unemployment Insurance Fund. Importantly, this amount will be automatically deducted from salary and transferred to the employer’s fund. Thus, when you need it, you will have access to insurance for employees in UAE.

Present a bank guarantee: Each new worker must present a bank guarantee of 3000 AED. Of course, according to the regulations and rules of the bank guarantee system or insure them under the new insurance policy. This policy will cover repatriation expenses, annual vacations, sickness benefits, and end-of-service severance pay.

Innovation & Technology in Government Insurance Initiatives

There are some innovation and technology initiatives for manpower insurance Dubai or insurance for employees in UAE. All these by the government to be able to promote the use of these tools in companies that provide great advantages to workers. Below you will see some of the main initiatives.

Artificial intelligence: One of the most interesting initiatives is the use of artificial intelligence. This includes blockchain and internet tools. Specifically, those of data analysis. Thus, you can access insurance for employees in UAE with all the important features for companies. For instance, customization, efficiency, transparency, and security of insurance services.

Sustainable investment plan: Another of the most common is the creation of a sustainable investment plan in human capital. As a result, it will boost economic development beyond the oil sector, one of the government’s biggest goals. In addition, this will foster global competitiveness and the development of innovation. Not only in insurance for employees in UAE but also in other sectors.

Corporate methodologies: It is good to introduce corporate methodologies and a digital platform. With this, you can monitor and evaluate the funds of the insurance for employees in UAE. In addition, to be able to be aware of other business activities. For instance, education, transportation, environment, and security.

Adopt a factor-based approach: The company should adopt a factor-based, social, environmental, and governance approach. With this, you can respond to the risks and opportunities that can be presented to you about good insurance for employees in UAE. In addition, this facilitates decision-making in risk management, services, products, reporting, and communication.

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