The new law was unveiled yesterday, although the full details have yet to be published. It is to be rolled out within three years, in several phases, beginning next year, the Dubai Health Authority said in a statement.
Dubai's passage of a mandatory health insurance law comes after Abu Dhabi, one of the other emirates that comprise the United Arab Emirates, introduced mandatory health insurance in 2007.
"This is really great news for insurance intermediaries such as AES," said Sam Instone, chief executive officer of AES International.
"I am sure there will be a three-year stampede of companies trying to find the best health insurance policies to suit their specific needs."
Jawaid Tabassum, global general manager for general insurance and employee benefits at Globaleye, said the new law would be a “win-win situation for everyone”, including Dubai’s residents as well as advisers and insurance companies, as was the case in Abu Dhabi after it introduced its mandatory health insurance law six years ago.
Explaining why Dubai’s nationals will benefit, Tabassum noted that the law will encourage the expansion of private medical facilities in Dubai, which will increase their options, should they wish to use them as well by going private.
For Katy Hallside, an employee benefits expert with Mondiale Dubai, the Dubai-based advisory business, the Dubai Health Authority's new law shows the government is accepting that "there is a real need for employers to implement employee benefits that put Dubai on an equal par to global business hubs".
"The UAE has become less transient, and the expat population is [increasingly] viewing the region as a long term base," she added. "If employers want to ensure they are attracting and securing quality employees, they need to review their current employee benefit packages to protect their human capital."
80% of residents
According to Gulf press reports, more than 80% of Dubai's residents will be obliged, under the new law, to obtain health insurance, since the emirate's citizens, whose healthcare needs will be provided by the Dubai government, account for less than a fifth of the population.
The National, a Gulf publication, quoted Essa Al Maidoor, director general of the Dubai Health Authority, as saying that the average cost of providing basic insurance to Dubai expat employees would be about 1.5% of their salary, with the option to top up the basic package with extra coverage.
A plan that would insure visitors to Dubai, which has a large and growing tourism industry, is part of the scheme unveiled yesterday, but will be introduced in the later stages of the mandatory health insurance roll-out, The National noted.
Private health insurance providers were studying the new legislation, and several did not respond to requests for comment. But Tim Slee, sales and commercial director for one of the largest insurers, Bupa International, said the company was “pleased” to see the legislation approved. Bupa International is the international arm of London-based private healthcare provider Bupa, and like other non-local insurers operates in the UAE through a partnership with a local company – in Bupa's case, Oman Insurance Co (OIC).
“We will continue to work with OIC to enhance our products to make sure they meet the requirements of this legislation, for the benefit of both employers and employees,” he added.
Slee said employers in the Gulf would benefit from the requirement that their expatriate staff have health insurance, because for such expats, “the reassurance that healthcare is taken care of means employees are likely to settle in more quickly,” and thus were likely to be more productive.