UAE: Compulsory occupational health insurance – new law for expatriate lower-paid workers

The UAE has seen constant improvements in healthcare provision, which are still ongoing. However healthcare costs are also on the rise, and were up by 40% in the last three years. The government has successfully controlled increases in drug prices, but hospital fees continue to climb, up by well over 20% in the last three years. The UAE is now the costliest country for healthcare in the GCC region.

This level of costs has resulted in certain sections of population being deprived of healthcare. Although some employers provide basic medical insurance, residents often spend considerable sums on medical care, and many expatriates, especially blue-collar workers, have no healthcare cover at all. With government spending on healthcare already a quarter of the federal budget and predicted to rise strongly, the Ministry of Health is pushing the private sector to share the burden by requiring employers to purchase health insurance for their employees.

In 2006, Abu Dhabi made it compulsory for employers to provide healthcare for all their employees and their dependents. Now, in 2014, another significant development for the less well-off sectors of the population has been implemented.

Following legislation signed into law by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, in November, 2013, the Dubai Health Authority enacted legislation for Dubai’s mandatory health insurance on January 27, 2014, which became effective at the end of March.

The program is called ‘ISAHD’ – Insurance System for Advancing Healthcare in Dubai, which also means “happiness” in Arabic. The law must be completely implemented by June 2016. It defines the minimum coverage that employers must provide to all employees earning less than AED 4,000 (about USD 1,088 per month).

Date of compliance depends on size

The larger the number of employees, the earlier the employer needs to comply. The law requires that companies with 1,000 or more employees must provide them with cover by October 2014. Companies with 100 to 999 employees have until the end of July 2015 to comply, and those with fewer than 100 workers have until the end of June 2016. The law further requires that the cost of insurance must be AED 500 to AED 700 (i.e. USD 136 to USD 190) p.a. per insured employee, with aggregate claims cover of AED 150,000 (USD 40,800).
Under the law, employers are only required to cover the cost of health insurance for their employees. They are not obliged to provide insurance or bear the costs for dependents. The law only applies to expatriate employees, as Emirati citizens are covered by the government.

There are currently 50 insurers registered with the Dubai Health Authority offering medical insurance in Dubai. For the first year of this program, seven have been approved to provide the basic required health benefits that comply with the law. While Swiss Life Network Partner Dubai Insurance is not among the seven insurers registered for mandatory cover so far, we will be glad to provide information and advice on compliance as required.