The implementation date for the first phase of Dubai's compulsory health insurance regime is looming. From 31 October, employers with over 1000 employees will need to ensure that their workforce is provided with health insurance in compliance with the requirements of the regime.
The regime was launched early this year when Dubai's compulsory health insurance Law No. 11 of 2013 came into force on 13 February (the Law). It was expected that the detail of the regime would be addressed in implementing regulations. However, implementing regulations have not been issued to date. Nevertheless, the Dubai Health Authority (DHA) has been active in communicating its requirements to market participants. At the end of last year the DHA held a briefing session for payers (insurers and TPAs) and subsequently shared with them answers to questions compiled from payers. Earlier this year the DHA issued an Employer Pack (updated on 1 October 2014) containing information designed to assist employers with preparing for compliance with the regime, followed up with an employers' briefing meeting. In the last few weeks, the DHA have issued a number of General Circulars and Policy Directives, the first communications of this kind from the DHA in relation to the health insurance regime.
The Employer Pack
The Employer Pack was intended as a useful information guide to employers on the Law and on the compulsory health insurance regime in general. It covers the requirements set out in the Law as well as additional details in terms of how the scheme is being implemented. The Employer Pack is an informational document only – it does not have the force of law. The DHA has relied on insurers, TPAs, intermediaries and other services providers in the market to distribute the Employer Pack to employers.
The Employer Pack sets out details which are not set out in the Law with regard to how the compulsory health insurance scheme is to be structured. Insurers are divided into two categories: (i) DHA permit holders; and (ii) and a subset that have been awarded "Participating Insurer" (PI) status. The PIs have been granted exclusive access to the lower salary band workers (LSB) pool (i.e. those earning less than AED 4,000 per month). However, buyers are free to contract with one insurer for their LSB pool and a non-PI for the remainder of their employees. The Employer Pack included the list of 43 insurance companies with health insurance permits (HIPs) and the 7 PIs. We understand that the DHA is planning to re-open applications for PI status, which will provide an opportunity for other insurers to apply for PI status for next year.
Although the Law states that all medical policies issued to residents of Dubai need to provide a minimum level of benefits, it provides no detail in relation to the prescribed benefits. So, there is presently no mandated package of cover that has been legislated by the Dubai Government. Instead, the DHA has communicated the details of the basic package, the Essential Benefits Plan (EBP) through various briefing sessions and the Employer Pack. The Employer Pack sets out at Appendix A the EBP's minimum benefit levels and policy exclusions permitted. Health insurance policies that offer benefits over and above the EBP are known as Enhanced Products. The types of additional benefits may be:
- Lower coinsurance
- Additional benefits e.g. dental or optical
- Significantly greater geographical coverage
- Higher annual aggregate cover limits
- Higher sub-limits
- Fewer exclusions
- Significantly wider healthcare provider networks
According to the Employer Pack, the EBP for LSB workers can only be purchased from a PI, although non-PI insurers holding a DHA Health Insurance Permit (HIP), may be permitted to entered into DHA approved facilitation arrangements with PIs, thereby assisting their clients in arranging the necessary cover with the PI. The DHA has set a premium price range for the EBP of between AED 500 to AED 700 per insured member per year. PIs are required to submit the premium that they will charge for the EBP, to be called their Index Rate. PI will only be permitted to deviate from their Index rate by plus or minus AED 25. It will be possible to apply to amend the Index rate annually at the end of September for the following year. The DHA maintains that the premium range was set in consultation with the PIs. There are currently no restrictions on premium for Enhanced Products. However, it is anticipated that the DHA will issue rules on premium and service provider pricing in general to apply in 2015.
We would expect that the EBP requirements will be subject to legislative enactment in due course.
The updated Employer Pack has also introduced reporting requirements for employers. Employers are required to provide certain details in relation to each insured member to their insurer, who is required to upload the data to the Persons Register on the DHA eClaimslink portal. This is in anticipation of the link that it is intended will be established between the DHA and the General Directorate of Residency and Foreigners' Affairs (GDRFA). At some future date, during the next two years, work and residence visas will not be issued if the linked DHA electronic records do not show that the individual is insured.
DHA communication going forward
The DHA has indicated that going forward it will issue the following forms of communications:
- Policy Directives: Policy Directives will be statements of policy advising the recipients what they must comply with e.g. what should be contained in a complaints handling procedure or compliance with specific aspects of the Law such as minimum benefits levels and their implementation.
- Standards Notices: Standard Notices will set down specific standards that must be met e.g. reporting standards, standards of business conduct or standards of customer care.
- Procedural Notices: Procedural Notices will provide details on specific procedures to be followed e.g. in making applications for permits or methods of reporting data or information.
- General Circulars: General Circulars will be communications of a general or informative nature.
These communications will be issued with a view to providing further information in relation to the practical implementation of the compulsory health insurance regime. Once again, they are not laws or regulations and have no legislative standing. They appear to be administrative guidelines as to how the DHA intends to implement the regime at a practical level. In due course we would expect that the regime outlined in the communications will be subject to legislative enactment through regulations issued by the Dubai Government.
The DHA has issued two General Circulars to date. The first Circular deals with communications from the Health Funding Department of the DHA; and the second Circular addresses the matter of self-funded schemes and other issues.
General Circular Number 1 of 2014 has been issued to explain the four types of written communications that the DHA will be issuing to the market as outlined above.
These communications will be sent by email to the listed point of contact (Single Points of Contact) that the DHA have for insurers, TPAs and intermediaries and to nominated / registered persons at healthcare providers. Insurers, TPAs and intermediaries should insure that their contact details are up to date and that the relevant person will ensure that the communications are distributed within the company. Where the communications are of a sensitive, serious or urgent nature, the recipients will be directed to acknowledge receipt. All of these communications will be made available at http://www.isahd.ae altho,ugh this is not yet the case. Communications through the eClaimslink portal will continue for matters of a technical or procedural nature that relate specifically to users of the portal.
General Circular Number 2 of 2014 has been issued to addresses issues related to self-funded (i.e. non-insured) schemes; insurance for LSB workers, the implementation of the minimum benefits requirements and to articulate the DHA's views on marketing activities that they perceive as not in the spirit of the Law. The following is a summary of the key directives:
- No new self-funded schemes are to be established (existing self-funded schemes are dealt with in Policy Directive Number 2)
- All new insurance schemes established from 1 January 2015 must comply with EBP benefits standards regardless of the employer's implementation date
- Only PIs can issue new policies to insure LSB workers regardless of employer's implementation dates (this does not apply to existing policies which are dealt with in Policy Directive Number 2)
Policy Directive Number 1 of 2014 sets out the DHA's minimum requirements and standards regarding complaints handling. All insurers and TPAs are required to have a formally documented complaints procedure. All complaints must be logged, and the minimum level of detail required is listed (including categories of complaints). The DHA prefers complaints to be logged in an automated system. The ownership of complaints must be clear, to the level of a clearly identifiable staff member with a clear complaints escalation process. There are minimum reporting requirements and some additional requirements set out in the Policy.
Policy Directive Number 2 of 2014 addresses compliance with the minimum benefits for all health insurance policies. Although the implementation schedule for the compulsory requirements (Phase 1, 2 and 3) remains in place, the timing by which policies must meet the EBP minimum benefits has been amended. Meeting the EBP minimum benefits means that policies just meet or exceed the benefits provided by the EBP and the policy's exclusions must not go beyond those listed in the EBP. The following is a summary of the amended requirements:
- All new policies issued on or after 1 January 2015 must meet the EBP's minimum benefits
- Phase 1, existing policies (including new members added) must meet the EBP minimum benefits by the first renewal date (and no later than 12 months) after the implementation deadline of 31 October 2014
- Phase 1, where an existing policy covers LSB workers with a non-PI this can continue until by the first renewal date (and no later than 12 months) after the implementation deadline of 31 October 2014
- Phase 2 and 3, existing policies (including new members added) must meet the EBP minimum benefits by the first renewal date after 30 June 2015. This means that by the final deadline of 30 June 2016, all insured members will have benefits that meet the EBP's minimum benefits
- Phase 2 and 3, where an existing policy covers LSB workers with a non-PI this can continue until the first renewal date after 30 June 2015
- Existing self-funded schemes must convert to full insured schemes in accordance with the original implementation dates
Implications for the Market
Although the anticipated legislation to expand on the Law in the form of implementing regulations has not emerged, this does not appear to be delaying the DHA's phased in implementation deadlines. The DHA is relying on its briefing sessions and information documents to get its message out to the market. The more structured approach of issuing formal communications is a positive step forward and it will be advantageous to the market as a whole when these are available online at www.isahd.ae. One issue that has arisen to date is that the DHA has had to rely on insurers, TPAs and intermediaries to get their message out to the insurance buyers, which has not always proved successful.
Insurers and buyers should be aware that the recent General Circulars and Policy Directives have amended the implementation timelines. Although the original implementation schedule for the compulsory requirements (Phase 1, 2 and 3) remains in place, the timing by which policies (new and existing) must meet the EBP minimum benefits that has been amended. By bringing forward the requirement for policies to comply with the ESP's minimum benefits, the DHA have significantly altered the implementation timeline for insurers. Insurers will need to review, and potentially revise, their internal plans and timelines to ensure new policies and existing Phase 2 and 3 policies will comply with the ESP's minimum benefits requirements in line with the revised timelines. The recent General Circulars and Policy Directives also seek to curb the types of arrangements that may be put in place, and the types of policies that can be issued to insurance buyers in advance of implementation dates. The DHA's position, particularly on self-funded schemes, may adversely impact some TPAs, intermediaries and group buyers. Some insurers and buyer may need to reconsider their interim / pre-implementation arrangements.
Insurers, TPAs and intermediaries will need to ensure that their complaints handling processes comply with the requirements set out in Policy Directive 1. We would expect that most insurers and TPAs will have a complaints handling process broadly in compliance having been through the application for the HIP earlier this year. However, existing policies and procedures will need to be reviewed for compliance with Policy Directive Number 1 and some work may be required.
The DHA recently held a briefing session for health insurance intermediaries and introduced the requirements that:
- all intermediaries advising on, marketing or selling health insurance in Dubai will need to have a Health Insurance Intermediary Permit (HIIP); and
- all individuals within the intermediary that advise on, market or sell health insurance in Dubai will need to be registered as a Permitted Health Insurance Representative (PHIR).
We understand that the DHA's online application system will be open for applications from 1 December 2014 and that intermediaries are required to submitted completed applications by 31 December 2014. Incomplete applications will be rejected and there will be no opportunity to resubmit following a rejection. Evaluation of the applications will occur in January 2015 with the results announced shortly after. As a pre-requisite to obtaining a HIIP the intermediary must have a Federal Insurance Authority licence. Intermediaries that are not registered and approved by the DHA will not be permitted to operate in Dubai. Third party administrators have already had to comply with registration requirements along with the insurers.