08 Oct 2013

HEALTH INSURANCE IN ABU DHABI: EMPLOYERS’ OBLIGATION TO EMPLOYEES’ FAMILY MEMBERS

Authored by: Olaide Esan

HEALTH INSURANCE IN ABU DHABI: EMPLOYERS’ OBLIGATION TO EMPLOYEES’ FAMILY MEMBERS

Olaide Esan, Senior Legal Consultant of Hadef & Partners Abu Dhabi office clarifies some of the obligations for employers in providing medical insurance cover to families of ‘junior’ employees employed on a ‘single status’ contract, but who have decided to bring their spouses and children to the UAE under the employees’ own sponsorship.

In brief:

  • The Law makes it compulsory for employers in Abu Dhabi to provide health insurance coverage for all employees and their families.
  • The ‘Thiqa’ program was launched in 2008 by the Health Authority in Abu Dhabi (HAAD) and the program grants all UAE Nationals and those of similar status, healthcare coverage through a comprehensive network of healthcare providers.
  • The program is compulsory for UAE Nationals that are natives of Abu Dhabi and voluntary for UAE nationals that are natives of other emirates.
  • The employee has an obligation to subscribe to the insurance scheme for any other person under his sponsorship who is not entitled to health insurance coverage by his employer.
  • The employer is held responsible for procuring health insurance coverage for employees’ dependants who are not sponsored by the employer.
  • There are penalties stipulated in the law to deal with violations, for failure to subscribe to the health insurance scheme or renew upon expiry.

The Abu Dhabi Insurance Law, Law No. 23 of 2005 (the ‘Law’) and the Executive Regulations regarding the Health Insurance Scheme in the Emirate of Abu Dhabi (the ‘Regulations’) deal with the responsibilities of employers and sponsors. The Law makes it compulsory for employers in Abu Dhabi to provide health insurance coverage for all employees and their families. The obligation on employers apply to all expatriate employees and will also apply to employees of UAE nationality who are not enrolled on the ‘Thiqa’ program (discussed below), or covered under other health insurance schemes.
 
As part of implementation of the Law, Resolution No. 83 of 2007 on Implementation of Health Insurance for UAE Nationals was issued and by virtue of which the Law is applicable to UAE Nationals. Also, the ‘Thiqa’ program was launched in 2008 by the Health Authority in Abu Dhabi (HAAD). ‘Thiqa’ in Arabic means trust, and the program grants all UAE Nationals and those of similar status, healthcare coverage through a comprehensive network of healthcare providers. Enrolment to the ‘Thiqa’ program is free of charge and is open to all UAE nationals irrespective of age. The program is compulsory for UAE Nationals that are natives of Abu Dhabi and voluntary for UAE nationals that are natives of other emirates. An employer may provide health insurance coverage to UAE national employees that are enrolled on the Thiqa program only if the cover does not duplicate the coverage already provided under the Thiqa program.     
In regard to the responsibility of employers to provide health insurance for employees and their dependants, the Law makes no distinction between ‘junior and senior level employees’ or ‘single and married status contracts’. However the Law makes a distinction in the type of cover applicable to certain categories of employees, which we will briefly cover below. The references in both the Law and Regulations are merely to ‘employer’ and ‘employee’. The Law makes it mandatory for every employer to provide health insurance coverage for all their employees and the employees’ eligible family members, including a wife and three children, under the age of 18 years. It is the employee’s duty to notify his employer of his eligible family members and the employer is responsible by law to the employee to provide health insurance cover for them.  
 
The employee however, has an obligation to subscribe to the insurance scheme for any other person under his sponsorship who is not entitled to health insurance coverage by his employer. This will apply in situations where an employee has more than one wife and / or more than three children. The Regulations provides that ‘Basic Health Insurance’ policies shall be used by expatriates’ dependants who are excluded from the health insurance provided by the employer.
 
As regards on whom the primary responsibility lies for ensuring that employees and their dependants have the appropriate health insurance cover, Article 11(1) of the Regulations states that the employer shall be held responsible even for procuring health insurance coverage for employees’ dependants who are not sponsored by the employer. The employer is responsible for ensuring that the employee and the employee’s dependants are covered by valid health insurance policies at all times. Employers are to meet the cost of providing basic health insurance policies for low salaried employees and their dependants and must not pass on the cost of providing such policies to employees.
 
There are penalties stipulated in the Law to deal with violations, ranging from fines of AED300 per case for failure to subscribe to the health insurance scheme or renew upon expiry, to fines of not less than AED5,000 and not more than AED20,000 in other instances of violations. Provisions that contradict the Law and Regulations are void, including any stipulations in an employment contract which contravenes the Law, unless they are more beneficial to the employee.
 
Conclusion
 
In conclusion, employers in Abu Dhabi should be aware that the Law and Regulations on health insurance in the Emirate of Abu Dhabi places primary responsibility on the employer to provide health insurance for all its employees and their eligible dependants, without making any distinction between employees on the basis of seniority or marital status.

This article, including any advice, commentary or recommendation herein, is provided on a complimentary basis without consideration of any specific objectives, circumstances or facts. It reflects the views of the writer which may, in some cases, differ from those of the firm, especially in the develop jurisdiction of the UAE.