Everybody has heard about the Dubai Health Insurance Law since January 2014, making it mandatory for all businesses in Dubai to provide basic health insurance to its employees. The confusing aspect of this law was determining when your business must fulfill such obligations. Well, by the end of 2016, all businesses of every size within the Emirate of Dubai, including free zones, must have basic health care coverage for its employees. Also, by this date, dependents of sponsors, which includes domestic workers, must also be covered for basic health care insurance.
Specifics of the law
What does “basic health care” insurance or coverage mean under this law? The following elements must be covered:
- General practitioner visits
- Emergency treatments
- Referrals to specialists
- Procedures in the areas of maternity, investigative, and surgical
These elements combined would create the minimum coverage for the individual being covered, employee or dependent. But note, this minimum coverage is only applicable for residents, not nationals. In order to meet minimum standards of health coverage for nationals, the insurance plan must provide additional preventative and therapeutic health services.
One aspect of this particular law that is worthy to note is the employer’s release of covering dependents of its employees. Rather, the coverage of such individuals is the responsibility of their sponsor. The purpose behind implementing such changes is to dissuade companies from being biased in their employee selection process – rather than focusing on the amount they will have to pay to cover other members of that applicant’s family, employers can focus on the individual applicant’s qualifications.
[Related: Why SMEs need to take insurance seriously]
Responsibility and Regulation
Employers, unfortunately, bear the burden of this law being solely responsible for the cost of this health care coverage – meaning employers are not able to simply “pass off” the cost to the employee by any means, including a salary deduction. Such coverage will be regulated by the Dubai Health Authority via the visa renewal process. If an employee does not have the minimum health insurance plan, his/her visa will not be renewed. On top of that, employers that fail to provide insurance will face fines ranging from Dh500 to Dh150,000. Repeated offenses could lead to a maximum fine of Dh500,000.
[Related: New rules don’t have to break the bank!]
How to work with this?
With this law being implemented, a lot of employers have already (and some still need to) rewrite employment contacts or create subsequent contracts to make sure their compliance is documented and adequately covers the minimum requirements. Then the next question becomes: “are you creating a document that is demonstrating compliance” and “is it enforceable?” Wait and see common and yet detrimental mistakes made in contracts everyday throughout this region. Until next edition, make sure you Protect your Business by Protecting their Health!
This article is written by Samantha, a U.S. qualified attorney specializing in Civil Litigation and Dispute Resolution. Samantha carries extensive legal experience in USA and UAE including litigation, corporate, arbitration, criminal (both jurisdictions) and labor law.