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Mandatory health insurance for residents and tourists in Dubai

Under the law, which will be implemented in three phases from 2014-2016, employees will be entitled to a basic health-care plan provided directly by their employers.

The new law making health insurance mandatory for every resident and tourist in Dubai is being hailed as an admirable and ambitious step towards delivering a high-quality universal health-care service in the Emirate. But according to law experts, the transition towards the new system under a single unifying regime raises challenges that must be addressed if the initiative is to be a success.
Under the law, which will be implemented in three phases from 2014-2016, employees will be entitled to a basic health-care plan provided directly by their employers. Insurance companies must not deny anyone coverage under the basic plan due to pre-existing medical conditions, while employers are prohibited from passing health insurance costs to staff by deducting from salaries. Visitors to Dubai will also be required to purchase health insurance when they arrive.

Eli Hyder, Managing Partner of Bond Lawyers, says, “The new healthcare regime shows much promise. We have seen already how as a result of comprehensive health-care reform introduced in Abu Dhabi in 2006, 98% of the Emirate’s residents now enjoy coverage. But as well as emulating the capital’s success, it is important that measures are taken in protecting against health-care price inflation and abuse of the system, ensuring the city’s infrastructure can support the changes, and keeping all stakeholders – including residents, employers and tourists – fully informed about their rights and obligations.”

Mr. Hyder adds, “One obstacle to overcome is ensuring that all employers are able to finance their new obligations. By 2014, health-care spending in Dubai is projected to rise to AED40bn, 11 per cent higher than in 2011. Smaller companies are being given more time to adjust to the rule changes. Those with more than 1,000 staff must provide health cover first by October of this year while companies with up to 100 employees have until June 2016 to comply.”

Employers are strongly encouraged, but not mandated, to provide insurance cover for their workers’ spouses and dependents, but the ultimate responsibility for that lies with the employee. Thus another hurdle will be around developing packages that allow employees to affordably cover their families’ health-care expenses.

On balance, however, Hyder says that the new health-care regime seems to be a major positive development in the sector and, bolstered by Dubai’s already strong reputation for medical tourism, underlines the Emirate’s position as a burgeoning hub for health-care in the Middle East.