Mandatory Dubai health insurance deadline getting extension

The Dubai Health Authority has made the decision due to the high influx of customers flocking to insurance companies in the last few days and in consideration to those who were not able to get the insurance in time due to one circumstance or another.

One of the key differences of Dubai's health insurance regime is that employers are not required to provide coverage for the dependents of their employees. ... Failure by employers to provide insurance carries fines of between Dh500 and Dh150,000.

Approved by His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, Dubai Health Insurance Law No. 11 of 2013 came into effect on 1 January 2014 (Law).  The aim of the Law is to create an integrated health system for Dubai, based on a sustainable financing system that supports the competitiveness of Dubai and protects the rights of all participants.  The Law phases in the requirement for all employers in Dubai to have in place compliant health insurance cover for their employees.  It applies to all participants in the health insurance arena including health service providers, insurance companies, insurance brokers, claims administration companies, employers, sponsors and beneficiaries. 

Whilst the Law came into effect on 1 January 2014, the provision of health insurance cover will only become mandatory for:

•     companies with more than 1,000 employees, from 31 October 2014;
•     companies with 100-999 employees, from 31 July 2015; and
•     companies with less than 100 employees, from 30 June 2016.

The roll out phase also provides that dependents of sponsors, including domestic workers, must also be covered for the basic health coverage by 30 June 2016.

What does this mean for me as an employee based in Dubai?

The Law’s jurisdiction spreads across the entirety of the Emirate, including its development areas and free zones so eventually all of the nearly three million residents of Dubai, nationals and expatriates alike, should be covered.  That said, the minimum cover offered will differ between residents and nationals with the later also having access to additional preventative and therapeutic health services.  The schemes for both nationals and residents will at a minimum cover general practitioner visits, emergency treatments, referrals to specialists as well as surgical, investigative and maternity procedures. 

What are my obligations as an employer?

Employers are required to put in place health cover for their staff that meets the minimum requirements of the Law.  The Law stipulates that employers cannot simply pass on the cost of the cover to their staff and the Dubai Health Authority (DHA) has made clear that it will treat any attempts to do so seriously.  As a means of ensuring cover is put in place and maintained, the renewal of an employee’s visa will be subject to the employee having health insurance in place.  Employers have to provide a basic health coverage with an annual premium anywhere between Dh500-Dh700 and a maximum insurance cover per person per annum of Dh150,000.

One of the key differences of Dubai’s health insurance regime is that employers are not required to provide coverage for the dependents of their employees.  By making family cover compulsory, companies could be biased towards hiring single executives to save costs which could, in turn, shift the balance of Dubai’s demographic make-up away from its current family-orientated focus.  Instead, cover for dependents falls to the sponsor themselves.  So, where a dependent does not receive cover from an employer, it becomes the responsibility of the sponsor to put in place and maintain the required cover.

Failure by employers to provide insurance carries fines of between Dh500 and Dh150,000.  Repeated breaches carry a maximum fine of Dh 500,000.

Labour Ban and U.A.E Ministerial Decree 766 Rules for Work Permit

Ministerial Decree 766 of 2015 sets out new rules on work permits with result easing of labor bans .Rules and Conditions for granting a permit to a worker for employment by a new employer as per Decree 766

As per Ministerial Decree 766 and effective from January 2016 a new work permit will be issued and hence no labour ban arises in the following circumstances (applicability to each type of contract illustrated in the relevant columns). Clearly the changes provide for a more fluid labour market and greater employee mobility. The circumstances in which labour bans can be issued are so radically.

No	Circumstances	Limited Contract	Un-Limited Contract
1	The contract has expired and not renewed	No Ban
2	Either party unilaterally terminates the employment relationship after the expiry of the first fixed term contract provided that: a)     The terminating party gives notice to the other party as per the MOL Contract; b)     The terminating party continues to honor the contractual obligations for the duration of the notice period; and c)     The terminating party indemnifies the other party in the amount that was agreed to in the MOL Contract. This provision  appears to have been written purely with intention of addressing where an employee resigns during the term of the contract (as otherwise an employee would not be entitled to a new work permit if the employer was in breach of (b) which does not appear to be the intention of the legislation).	No Ban
Our Ban3	Either party unilaterally terminates the employment relationship provided that: a)     The terminating party gives notice to the other party as per the MOL Contract; b)     The terminating party continues to honour the contractual obligations for the duration of the notice period; and c)     The employee has completed a period of no less than six months (if the employee has a high school diploma or higher the 6 month period is waived).		No Ban
4	The parties mutually agree to terminate the contract during the course of its term, provided the employee has completed a period of no less than six months (if the employee has a high school diploma or higher the 6 month period is waived).	No Ban	No Ban
5	Where the employment is terminated by the employer through no fault of the employee; provided the employee has completed a period of no less than six months (again if the employee has a high school diploma or higher the 6 month period is waived).	No Ban	No Ban
6	Where the employer has failed to meet his legal or contractual obligations, including but not limited to when the employer fails to pay the employee’s wages for more than 60 days.	No Ban	No Ban
7	Where the employer is shutting down	No Ban	No Ban
8	Where the labour court provides a final ruling in favor of the employee that attests that is entitled to: ·         Accrued wages for no less than two months of work ·         Arbitrary or early termination compensation, or ·         Any other entitlements that the employer has abstained from granting including end-of-service gratuity.	No Ban	No Ban

The new changes certainly add transparency and clarity for U.A.E Labour Law on issues such as offer letters and termination provisions. The greater workplace mobility provisions are likely to have an immediate impact on the labour market and it will reflect in U.A.E economy

The main beneficiaries of the changes will be blue collar workers and those recruited from aboard by unscrupulous companies offering terms and conditions that are not then honoured in the UAE.