03 Apr 2017

Dubai Mandatory Health Insurance Scheme Enters Final Phase

Authored by: Hadef & Partners, Sector Groups

The Dubai Health Insurance Law No. 11 of 2013 has now entered its final phase of implementation with the recent passing of Executive Council Resolution No. 6 of 2017.

All employers in the Emirate of Dubai, including its free zones, will be required to have obtained adequate health insurance coverage for their employees by 31 March 2017, the new deadline for the final phase of Dubai’s mandatory health insurance scheme.

The scheme was rolled out in three phases, with the current final phase extending the requirement to smaller companies having less than 100 employees.

The extent of mandatory coverage differs slightly based on an employee’s status as a UAE national or expatriate. Expatriate employees, who are entitled to receive health insurance from their employers, will be entitled to a minimum coverage encompassing general practitioner visits, emergency treatments, specialist referrals and medical procedures, whether surgical, investigative or maternity related. UAE nationals, who receive health insurance from the Government of Dubai, are further entitled to additional coverage for preventative and therapeutic health services.

The fact that UAE nationals are entitled to receive health insurance directly from the Government of Dubai provides an additional incentive to employers to hire UAE nationals, whose employment would not lead to an increase in an employer’s insurance related costs. In the case of expatriates, any attempt by an employer to pass on the costs of insurance to its employees will likely be met with severe financial penalties.

The geographical area of an employee’s insurance coverage was recently expanded by the new resolution. Rather than only covering the Emirate of Dubai as was provided for in the original law, the recent resolution provides that coverage must also extend to the Northern Emirates.

This recent requirement accounts for the fact that many Dubai visa holders physically reside in Sharjah or other Northern Emirates and commute daily to their place of work in Dubai. The expanded geographical coverage means that these individuals will no longer be required to travel to Dubai to seek medical treatment. Not only is this more convenient for the relevant policyholders, but is also more cost-effective for insurance companies given lower costs of healthcare outside Dubai.

One interesting feature of the new law is that employers are not required to provide insurance coverage for their employees’ dependents. Rather, it is the responsibility of the employees themselves to ensure that their dependents are adequately insured. There is an important public policy consideration underlying this facet of the law. Requiring employers to insure the family members of its employees would lead to a hiring bias in favour of single candidates, which, in turn, would lead to a shift in the demographic make-up of Dubai.

The new mandatory health insurance scheme has significant implications for all companies based in Dubai as they will be required to increase expenditure to provide adequate health insurance coverage for all employees. There are additional implications for insurance companies and healthcare service providers who are subject to express obligations under the new law related to implementation of the new scheme.

For more information, please contact us on sectors@hadefpartners.com