Employee medical insurance
In one sentenceA health insurance policy the business buys for its employees from an insurance company, covering their treatment under the Cooperative Health Insurance Law. Its cost is part of the employee cost.
Simply put
A private sector employer must provide medical insurance for its employees under the Cooperative Health Insurance Law, which sets which family members are covered and the minimum coverage.
In the accounts: the premium is usually paid for a year in advance, so record it as a prepaid expense and charge each month its share.
Worked example
A distribution company paid the annual medical insurance premium for ten employees, 48,000 SAR, at the start of the year.
Dr Prepaid medical insurance48,000
Cr Bank48,000
Share of each month: 48,000 ÷ 124,000
Share per employee per month: 4,000 ÷ 10400
Monthly medical insurance expense4,000 SAR
Formula: Monthly expense = annual premium ÷ 12
Don't confuse it with
General Organization for Social InsuranceGOSI is a government contribution for annuities, occupational hazards and SANED, while medical insurance is a policy from an insurance company for treatment.