Dubai’s new compulsory health insurance legislation, which came into effect on 1 January, will ‘make the market more competitive and boost employee productivity’, according a senior industry executive. “The market is big enough for everyone,” added Ashok Sardana, managing director of Continental Group, responding to concerns that the new law runs the risk of phasing out smaller players. “[However], we will see big and established players benefit more as they will be able to provide a better quality of service and value due to the established infrastructure,” he said. The Health Insurance Law for the Emirate of Dubai, which was signed on 24 November 2013, stipulates that health insurance coverage will be mandatory for all visitors to, and residents of, Dubai. This includes all the ‘free zones’ within the Emirate.

Under the law, which is similar to the law in Abu Dhabi, employers will be required to cover the cost of medical insurance for their employees, although unlike Abu Dhabi’s compulsory requirements, employers will not need to provide cover for spouses and dependants. Employers will need to pay a minimum annual premium of AED500 (US$135) per staff member, and provide annual cover of AED150,000. This has led to fears, however, that medical insurance premiums will be hiked as a result, although Dubai Health Authority (DHA) spokespeople have stated that they will not allow this to happen. “The minimum requirements will be defined by law and cannot be changed,” said Dr Haidar Al Yousuf, director of health funding at the DHA, “No insurance company can shift the burden to the common man. Only insurance companies that can provide the basic health benefits with these premiums and the annual health cover can register with us.” The new system, registration for which at least two-thirds of approved Dubai-based insurance companies have reportedly applied, will be rolled out in three phases, with full implementation expected by the end of June 2016.  

“Cost of treatment in Dubai is dramatically increasing, and many employers still don’t supply enough cover for staff,” commented Sarah Dennis, of Sarah Dennis Consulting. “Currently, you tend to see international firms taking the steps to ensure staff have adequate cover, but smaller firms often take the route for staff to find their own insurance by giving them money into their salary package. This will ensure that all staff have adequate cover. It is likely that cover will be required for inpatient, maternity and outpatient, although dental is not mentioned at this point.” An area of interest, Dennis said, is that ‘insurers will not be allowed to decline cover to anyone with pre-existing conditions, although there may be a mini-moratorium of six months on chronic and pre-existing conditions’. She went on to say that ‘companies will not be allowed to continue to offer staff a cash option so they purchase their own cover’. “They must adhere to the rules and put the cover in place on behalf of the employee,” she explained.

A report on the new legislation from international law firm Clyde & Co, meanwhile, states that ‘compliance with the compulsory health insurance requirements is intended to be linked to the Emirate’s immigration and trade licensing processes, which will require employers and employees to provide suitable evidence that they have local health insurance in place in order to obtain trade licenses and residency visas’. “This will have knock-on effects for companies with global health insurance plans in place,” the report continues, “and how these are arranged and delivered to employees in Dubai. The new regime will also increase the regulatory burden for insurers issuing health plans for residents of Dubai. This will impact on all who are managing health plans in Dubai. Going forward, health plans will need to comply with mandatory requirements for essential cover. In addition, health insurance plans will also need to be approved, not only by the UAE Insurance Authority, but also by the DHA.”