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Dubai Dubai News Jafza firms must get staff health insurance
Dubai Dubai News Jafza firms must get staff health insurance
| Jafza firms must get staff health insurance |
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| Tuesday, 03 November 2009 00:00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. Companies in the Jebel Ali Free Zone Authority (Jafza) have been given time until the end of the year to obtain compulsory health insurance cover for their employees by the free zone authority, Emirates Business has learnt.Fatma Salem, Executive Vice-President and Commercial Director, Jafza Operations Department, said in an official communiqué on Sunday that there is no relaxation in the mandatory Group Medical Insurance Scheme, announced earlier by Jafza on October 21. Since most companies could not comply with the requirement within the stipulated time of one week, they have been given until the end of December to comply with the compulsory health insurance scheme. The companies have been given two options – those with less than 20 employees can buy individual medical insurance and those with more than 20 can buy a private medical agreement. "There are about 6,000 companies in Jafza and many could not comply with the official order issued two weeks ago. We could not submit GMI certificates within a week because it is an expensive programme and needs a lot of paper work. An average company with 100 employees would need to pay a minimum of Dh60,000 per year as premium," said an official from a free zone company. Insurance brokers said the annual premium amount varies from company to company depending on the number of employees, nationality, age and the claim limit set by the company. Many firms are finding it difficult to raise cash within such a short notice during a slowdown. "This announcement came as a shock because many companies are reeling under the impact of recession. There were similar plans earlier, but they were put on hold due to recession. For a company with 2,000 or 4,000 employees, the insurance premium amount would require a huge cash outflow. This year has been a bad one for business and some insurance companies are demanding premium payments of Dh6,000 per employee. Most of the small- and medium-sized companies have been caught unawares by this announcement," said a representative of a trading firm in Jafza. Now, the free zone authority has stipulated that the private medical agreements must cover both in-patient and out-patient treatment. "Companies and employees sponsored by Jafza have to get compulsory medical insurance. Medical insurance from all the UAE-based insurance companies are acceptable. We haven't finalised the penalty or fine to be imposed against companies that do not comply with the rule," a Jafza official said. The penalty can range from a fine to non-renewal of trade licences, he said. On October 21, Jafza informed companies that a Group Medical Insurance was compulsory for operating in the free zone and the authority had advised free zone companies to process GMI from insurance firms. The authority advised firms to submit the GMI Certificate to it within a week to avoid any inconvenience. Fareed Lutfi, Secretary General, Co-ordination Commission for Gulf Insurance/Reinsurance Companies, said the compulsory group insurance scheme has been pending implementation in Dubai due to the economic situation. "The scheme was supposed to have started in January this year. The formation of a Medical Management Company, to manage the scheme, has been delayed. There is also a halt on the formation of new insurance companies outside the DIFC." He said many European and US firms have started operations in the DIFC to give wholesale insurance products to the UAE market.
SOURCE business24-7
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