Dubai: Health insurance has become a big issue here in the UAE — the cost of both the amount paid by the member for their cover, and by the insurance company for the treatment has been increasing significantly, and until relatively recently this had not been regulated. There was also little consistency of cover, so it was difficult to compare different products to make sure the policies offered the same level of cover.
Abu Dhabi introduced mandatory health insurance for all residents over 5 years ago, and Dubai is currently going through this process now. While the Law came into effect on 1st January 2014, the provision of health insurance cover has been introduced in phases, and become mandatory as follows:
• companies with more than 1,000 employees, from October 31, 2014;
• companies with 100-999 employees, from July 31, 2015; and
• companies with less than 100 employees, from June 30, 2016.
The roll out phase also provides that dependents of sponsors, including domestic workers, must also be covered for the basic health coverage by 30th June 2016.
Employers are required to put in place health cover for their staff that meets the minimum requirements of the Law. The Law stipulates that employers cannot simply pass on the cost of the cover to their staff, and the Dubai Health Authority (DHA) has made clear that it will treat any attempts to do so seriously. As a means of ensuring cover is put in place and maintained, the renewal of an employee’s visa will be subject to the employee having health insurance in place. Employers have to provide a basic health coverage with an annual premium anywhere between Dh500-Dh700 and a maximum insurance cover per person per annum of Dh150,000.
Coverage for dependents
One of the key differences of Dubai’s health insurance rules is that employers are not required to provide coverage for the dependents of their employees, whereas this is the case in Abu Dhabi. The reasoning behind this is that by making family cover compulsory, companies could be biased towards hiring single executives to save costs, which could in turn shift the balance of Dubai’s demographic make-up away from its current family-orientated focus. Instead, cover for dependents falls to the sponsor themselves. So where a dependent does not receive cover from an employer, it becomes the responsibility of the sponsor to put in place and maintain the required cover (though this does not apply until July 2016).
Failure by employers to provide insurance carries fines of between Dh500 and Dh150,000. Repeated breaches carry a maximum fine of Dh500,000.
The minimum level of coverage stipulated by Dubai Health Authority under the Essential benefits plan will cover the Emirate of Dubai territorial limit only; including In-patient and Out-patient treatment. Pre-existing conditions are subject to a 6 month waiting period. Maternity coverage for married females will be subject to a 6 month waiting period. This is aimed at employees with salaries of less that Dh4,000 per month, while for employees with salaries above this level more comprehensive cover can be offered, with a minimum cover level of Dh250,000 per annum.
While the new legislation is obviously welcomed, there are some points of caution to be aware of. Firstly the area of cover — the basic cover is only for the Emirate of Dubai, so travel anywhere outside of Dubai is not covered. Also, Dh150,000 does not cover a huge amount of treatment, and you could easily find this limit being exceeded.
Therefore as with all areas of financial planning, this important subject needs to be studied to make sure you have the cover you actually need, rather than simply taking what is offered to you.
The author is a Managing Partner at DeVere Acuma.