Thenji Macanda on the new mandatory health insurance law
A new sense of optimism gripped the UAE when Dubai secured the rights to host World Expo 2020 in November last year. Several reports suggest a strong probability of a further ‘boom’ within the job market sector, with the potential of creating well over 200,000 jobs, as a direct result of Dubai being chosen as the host city for the Expo.
As employment lawyers, we are aware that proactive facilities management companies are starting to prepare for the possibility of a sudden increase of their existing workforce.
Several employers are expressing a greater concern about corporate responsibility and employee welfare and are seeking to explore ways in which they can retain their existing workforce but also attract the best talent going forward. One of the most obvious mechanisms to encourage high staff retention is to offer competitive compensation and benefits packages.
The new Health Insurance Law for the Emirate of Dubai 2013 is a recent legal development that will positively impact corporate benefits by the end of June 2016. The implications of the new legislation are that health insurance will be mandatory for all visitors and residents in Dubai (including the various free zones).
Dubai is most likely to implement a similar approach to its neighbouring Emirate, Abu Dhabi, where holding health insurance is a precondition to obtaining a valid residency permit.
The employer will have the discretion to choose the insurance package that is best suited to its business. However, there is a minimum basic level of coverage which includes GP visits, maternity, essential surgery and medical emergencies.
The new law does not extend to the employees’ dependants and, as such, the responsibility will be on each employee to ensure that his/her sponsored dependants (spouse, children, domestic workers and drivers) are covered.
One might say that the benefit of this approach is that it will not deter smaller companies (with perhaps more limited budgets) from only recruiting single employees. Employers, however, could consider enhancing their medical insurance coverage package to include the employee’s dependants in order to make their offers more alluring.
The law will be rolled out in three phases that will be directly linked to the size of the business: employers with 1,000 or more employees will be expected to be compliant by October 2014, employers with 100 to 999 employees have time until 31 July 2015, and employers with less than 100 employees have a deadline of 30 June 2016.
Overall, we believe that these developments are progressive and are in line with the dynamic environment we live in and will surely be welcomed by not only the private insurance sector, but also by the residents of Dubai.
While the primary objective of any healthcare initiative is to produce healthier employees, a good insurance scheme can result in a happier workforce, due to a greater feeling of security.
About the author
Thenji Macanda is the head of the employment law department at James Berry and Associates Legal Consultants.