Employers need to be aware that 30 June 2016 signifies the deadline by which all employees (regardless of the size of the employer) should have compulsory health insurance cover in accordance with the Dubai Health Insurance Law No 11 of 2013 ("the law"). The law applies to both those living or working onshore in Dubai and those living or working in any of the free zones, including the Dubai International Financial Centre.
The law has had a phased implementation since coming into effect in January 2014 and is currently in its final phase, which requires companies with 100 or fewer employees to have cover by the end of June.
What level of coverage is mandatory?
According to the law, every sponsor has a legal obligation to ensure that anyone on their sponsorship has the minimum standard cover afforded by the Essential Benefits Plan ("EBP"). This basic cover includes outpatient consultancy at clinics, referrals to specialists for surgical and pathological investigations, maternity health cover, emergency visits to hospital and any surgery required. Sponsors are of course entitled to top up this insurance cover and provide individuals under their sponsorship with a greater level of coverage.
Where can sponsors purchase the different insurance packages?
The Dubai Health Authority website and www.isahd.ae have a comprehensive list of all 46 registered insurance providers in the United Arab Emirates of which nine provide the EBP package for employees who earn less than AED 4,000. Employers also have the option of taking out group insurance schemes instead of individual cover for each employee.
The link between health insurance and visa renewal
The health insurance scheme has been linked to that of visa issuance and renewal. Ffrom 30 June 2016, individuals who do not have health insurance will be automatically rejected when applying for residence visas. The exception to this is individuals who fall within the categories of "dependant" or "domestic worker", in respect of whom the Dubai Health Authority has announced there will be a further grace period of six months in which to become compliant with the law.
What are the penalties for non-compliance?
Aside from the six month grace period for dependants and domestic workers detailed above, all other sponsors in Dubai who fail to comply with the law will be subject to monthly fines of at least AED 500 from 30 June 2016. Not only will sponsors be subject to fines for non-compliance with the law, they will also be responsible for paying for the health care of those on their sponsorship should they fall ill and lack health insurance. Given that the cost of the basic health insurance package ranges between AED 565 and AED 650, it is advisable for sponsors who have not yet taken out healthcare insurance for those on their sponsorship to do so promptly.
For how long must an employer provide medical insurance cover for an employee?
Employers must provide healthcare insurance for all employees until the employment relationship is terminated by either party or the contract of employment expires. There is no requirement for an employer to continue to cover an individual after the employee's termination date, regardless of whether the individual remains on their sponsorship because the United Arab Emirates exit formalities have not been completed. This means that employees may not have cover for the 30 day grace period which an employer has to cancel former employees' work permits and residence visas. It would be good practice for employers to inform terminated employees of this before their termination date so that they can arrange for alternative cover during the period they remain in country once their employment has officially terminated.