His Highness Sheikh Mohammed issues new decree on Dubai rental increases

In his capacity as the Ruler of Dubai, Vice-President and Prime Minister of the UAE, His Highness Sheikh Mohammed bin Rashid Al Maktoum has issued Decree No. 43 of 2013 concerning the percentages of maximum property rent increase that are allowed upon the renewal of tenancy contracts.

The Decree states that there should not be any rent increase if the rent of the property unit is less than 10 per cent of the average rent of a similar property in the same residential area. If the rent value is between 11 and 20 per cent less than the average rent of a similar property, the maximum rent increase shall be equal to 5 per cent of the rent value.

Additionally, if the rental value of a unit is between 21 and 30 per cent less than the average rent of a similar unit, the maximum rent increase shall be equal to 10 per cent of the rental value.

If the rental value of a property is between 31 and 40 per cent less than the average rental of a similar property, the maximum rent increase shall be equal to 15 per cent of the rental value. A maximum rent increase of 20 per cent is applicable if the rental value of a property unit is less than 40 per cent or more of the average rent of a similar unit.

The Decree applies to landlords from the public and private sectors in the emirate of Dubai including private development areas and free zones.

Article III of the Decree states that the average similar rental value of the property is determined by the Real Estate Regulatory Agency's (Rera) rent index.

The Decree is effective from the date of issuance and shall be published in the Official Gazette.

Annual leave not taken to be paid in cash if employee leaves company -Dubai court issues new ruling.

The Dubai Court of Cassation has established a new legal principle with regards entitlement of annual leave balance of employees.

Employees are entitled to avail cash allowance for balance of annul leave only on two conditions:

First, if the office required the employee to work during his annual leave and could not carry forward the balance leave to the following year.

Secondly, if the employee is required to leave the workplace after the notice period or if the employer terminated the worker without giving the leave due to him.

The court also ruled that the end-of-service gratuity mentioned in the fixed-term contract should be paid fully to the worker if he decides to resign after completing five years in service.

Similarly, employees whose service at least more than one year at the time of resignation are entitled to a-third of end-of-the-service benefits.

The court issued the principles in a case where the employee did not receive vacation allowance as the person had left work without serving a notice period.

A director of a company filed a lawsuit in the labour court in Dubai against his company, demanding the firm pay him dues of Dh765,000 – which included his annual leave allowance for the last two years and end-of-service gratuity.

The court ruled that the employee is eligible for cash allowance for balance annual leave for the last two years and that the person is eligible to receive the full amount of the end-of-service gratuity as he spent 6 years and 4 months in service at the company.

Earlier, the Court of First Instance had dismissed the case and the plaintiff appealed before the Court of Appeal, which ruled in his favour. The Appeals Court ordered the company to pay him Dh347,000 – in cash allowance for annual leave and full end-of-service gratuity.

The company then challenged the ruling before the Court of Cassation.

The court based its ruling to the provisions of Articles 78 and 79 of the Federal Labour Law No. 8 of 1980.

The court said in the reasons for its judgment that the employer had failed to prove that the plaintiff got his dues.

Dubai Health Authority announces mandatory health insurance cover roll-out plan

Dubai: Companies of varying sizes were issued deadlines on Tuesday by the Dubai Health Authority (DHA) to meet mandatory health insurance coverage laws starting in 2014.

Following a meeting between the DHA and health insurance companies in Dubai on Tuesday, a new timetable offers deadlines for three categories of companies based upon the number of employees on their payroll — larger companies with wider profit margins will be required to ensure complete insurance coverage sooner while smaller companies will have until mid-2016 to meet the call.

Companies with more than 1,000 employees, for example, must insure all of its workers by October 2014.

The new Health Insurance Law was approved by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

Eisa Al Maidour, director-general of the DHA, said in a statement on Tuesday that the “health insurance mandate will provide a significant boost to the health insurance industry, it will attract investment in the health care sector and will generate healthy competition between providers as well as health facilities. This only means further improvement in the quality of health services as well as more health care options and competitive premium prices. The mandate will benefit all the stakeholders concerned — this includes insurance providers, health care facilities and most importantly, patients.

Aim of the law.Timetable offers deadlines for three types of companies based on the number of employees on their payroll
The new Health Insurance Law was approved by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
Aim of the law
Our aim is to provide everyone in Dubai with access to essential health cover and to empower them by providing them with the right to choose their health provider within the private or public sector,” Al Maidour said.

According to the new timetable’s Phase 1, companies with more than 1,000 employees will be required by the end of October 2014 to “ensure every employee/dependent has insurance coverage by the stipulated deadline.”

In the second phase of the plan, companies with 100-999 employees must implement full health insurance coverage by July 2016.

Under a third phase, companies with less than 100 employees have until June 2016 to arrange for complete insurance coverage.

The DHA timetable demands that spouses and dependents as well as domestic workers must also be fully insured for basic health coverage by June 2016.

Visa renewal

When it goes into force, the new law will ensure that no work or residence visa will be renewed without a health insurance cover.

David Hedley, CEO of Mediclinic Middle East which runs the Mediclinic City and Welcare Hospitals, said earlier that this “is a giant leap forward for Dubai as everyone will have access to affordable and quality health care. I congratulate the government on its bold step and I am confident the insurance system will be implemented successfully.”

Dr Ahyam Refaat, founder of health care consultant Accumed PM, said in an earlier interview that the “long-awaited legislation is a step in the right direction. It will add to Dubai’s growth and public health and safety.”

Insurers need DHA permit

Meanwhile, the DHA said it will soon be issuing a list of approved health insurers who have applied for and received a permit to offer services in Dubai.

All health care providers will need to obtain a health insurance permit so that they are eligible to provide insurance cover in Dubai, Al Maidour said.

“In order to ensure we have the very best insurance companies on board, the DHA has laid out a set of criteria that all insurance companies need to adhere to, so that they are eligible to receive a health insurance permit, which is mandatory for companies that want to provide a health cover to anyone in Dubai.”

Dr Haider Al Yousuf, director of health, said: “Insurance companies interested in providing the essential health benefits [EHB] package to resident employees with salaries below Dh4,000 will have to undergo further qualifying criteria to ascertain their ability to provide an insurance package at an affordable rate. The premium for this package will range between Dh500-700 per person per year.”

He added that the package will cover all essential health services. “This package will cover emergency care, access to general physician [GP]/family physicians, referral to specialists, tests and investigations, surgical procedures and maternity care. All the necessary health requirements will be covered by this package. Therefore, once the mandatory health insurance is rolled out, people across the board will see the immediate benefits of the system.”

Cost for employers

Al Yousuf said that for employers, this will provide a minimum impact in terms of cost. “On average, health insurance costs 1.5 per cent of the monthly salary. For example, if an employer pays Dh10,000 per month in salaries, if he adds Dh150 per month, it covers the cost of health insurance. This is a minimum impact, adequate benefit plan; clearly, the benefits outweigh the minimum costs involved. The scheme protects both employers and employees from unforeseen health care costs that can arise out of an illness or an emergency.”

He said that as per the law, companies are liable to cover their employees only but the DHA encourages companies to cover the dependents of their employees as well. “It is a known fact that covering dependents of employees directly leads to greater employee satisfaction and better productivity.”

Health insurance made mandatory for all citizens in Dubai

The long-anticipated health insurance law of Dubai has been approved. From next year, health insurance will be mandatory for all citizens, residents and visitors to Dubai.

His Highness Sheikh Mohammad bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, yesterday approved the Health Insurance Law which stipulates rules and regulations for all parties involved in provision and implementation of health insurance in the emirate.

The fundamental basis of the law is to ensure that every national, resident and visitor in Dubai has essential health insurance coverage and access to essential health services.

“The law is fundamental to ensure smooth delivery of essential health insurance to everyone living in the Emirate, which roughly means over three million people, including nationals and residents with Dubai visas,” said Issa Al Maidoor, Director General of the Dubai Health Authority (DHA).

“It will not be possible to be in the emirate without health insurance. Residents will not get a visa without health insurance,” he added.The law stipulates the roles and responsibilities of all the stakeholders involved in the provision and implementation of health insurance.

While the government will be responsible for health insurance of UAE national, employers will be responsible for all their employees. Domestic workers will not be excluded from this scheme, the DHA emphasised.

Spouses of residents in Dubai must be insured by the sponsor of the spouse and not by the employer of the sponsor.  Visitors to Dubai will get health insurance upon entering the country.  Two million people are currently not insured, according to DHA estimates.

“We would like to thank Sheikh Mohammed and we are committed to fulfill his vision and ensure that every individual in Dubai has access to essential health coverage. Health insurance is a form of security and it is important for every individual to know that if he needs access to healthcare, it is easily available,” said Al Maidoor.Essential health coverage means insurance that ensures access to basic healthcare. At the same time, it should not put a burden on the employer, explained Haidar Al Yousuf, Director of Health Funding at the DHA.

Although emergency  and surgical services and maternity care will be included in the basic package, dentistry will not be on the list of essential health care services. “It is a smartly designed package, providing for basic services. Obviously, it does not include luxury services like cosmetic treatment. It provides the patient with basic needs,” Al Yousuf said.

Preventive health care, which has been the blind spot of health insurance, is not part of the basic package, but this is likely to change with the introduction of this law.

“We definitely encourage more and more preventive care to be provided by insurance companies. As the insurance market becomes more mature, companies are expected to stay with insurance companies longer. Insurance companies may then feel comfortable to provide preventive benefits,” said Al Yousuf.

Insurance companies will be permitted to offer competitive packages, with an expected average price tag of Dh600. Companies may also offer varying co-payment possibilities.  However, there is a minimum requirement for the co-payment cap, explains Al Yousuf.

“The co-payment cap is the maximum amount that the patient pays out of the pocket. Anything above this amount should be paid by the insurance company. The minimum requirements of this cap have been made clear to the insurance companies. Currently, there are more than 40 insurance companies approved by the DHA, and the details of the basic packages have already been communicated with these companies. They will be announcing their packages soon,” the DHA said.

Sustainable health care

The health insurance law rests on two pillars. Apart from providing residents with access to basic healthcare, it develops an effective and sustainable health financing system, says the DHA .

“Depending on the insurance companies’ policies, health care will be available at public as well as private hospitals. Public hospitals will act as private hospitals in providing health care to insured patients. The idea is that patients are not bound by financial considerations when selecting the health care of their choice. They will be able to select the services they find most attractive,” explained Al Yousuf.

“We looked at some of the worlds’ best practices and some regionally applied systems. Of course we want the best health care system. What is unique about this law is that it does not only provide access to health care services, but it also ensures quality of these services.

“All parties will be encouraged to perform slightly better, and the results of this will be published. This transparency will guarantee that the focus of health care is on quality, and not only on price,” he added.

The law will go into effect 60 days after signing of the law, but the implementation is expected to be done over a period of two and a half years in phases.  All parties will be expected to comply with the law within a year.

Though details of insurance responsibilities are to be announced to the public soon, some highlights were announced by the DHA on Tuesday.

Residents

For residents in Dubai, the law stipulates the responsibility of the employer to provide with the minimum of a basic health insurance package based on their current health insurance policy.

In doing so, the company must bear the full costs of the procedure and these costs may not be deducted from the beneficiaries.  It is expected that of the total amount spent on salaries, 1.5 per cent will be spent on the insurance scheme providing the basic health insurance coverage, explained Al Yousuf.

As the insurance coverage is linked to residency, companies are obliged to show sufficient evidence of insurance coverage when residence visa are to be renewed.

The insurance contract may not always cover the same period as the residency period. If it happens that due to this the employee is not covered by health insurance and medical treatment is required, the company must bear the full costs of the healthcare services provided.

UAE nationals

UAE nationals will receive insurance cards to replace the existing Dubai Health Authority (DHA) health cards that provide coverage for healthcare services and preventive care. “They will continue to have access to all current healthcare services provided by the DHA and various private healthcare providers,” said Al Yousuf.

Visitors

On entering Dubai, the visitor will be required to purchase health insurance. “The costs of this health insurance package will be very low, covering only emergency cases,” said Al Yousuf.

The costs of this health insurance coverage will be included in the costs of a visa, explained Al Maidoor. “We do not want to duplicate the procedure, we want to simplify it,” he said.

Violations

Violators of the Health Insurance Law  will be fined a minimum of Dh500 and a maximum of Dh150,000. If the violator repeats the violation in the same year, the fine will be doubled, although the fine may not exceed Dh50,000.  In addition to the fine, the DHA may issue a warning and suspend the company’s health insurance activities within the emirate for not more than two years, or cancel the health insurance permit. The violation may also result in civil or criminal cases.

Complete your property transaction in Dubai within 12 minutes-Developers get authority from Land department

Dubai developers will now be able to register property transactions and complete them in mere 12 minutes compared to seven days required previously.Dubai Land Department (DLD) tweeted, saying, “The LD has granted developers the authority to register property transactions. However, the department will carry the auditing process and issue the contracts.”

The department added: “Now your transaction can be completed in just 12 minutes instead of 7 days.”

According to DLD, it has successfully achieved a “new” record in saving the client’s effort and time, achieving its objective of offering client satisfaction, transparent transactions and internationally premium real estate services.Real estate agents say these are primary market transactions between the first purchaser and developer.

Already in July, DLD had launched “registration trustees” service for the secondary market sales, allowing customers to complete transactions outside official working hours through licensed legal offices. The service, however, costs Dh4,000 per transaction.

The department also got a pat on its back when World Bank’s 2013 Doing Business Index ranked it has the fourth best in the world for ease of real estate and property registration. A year back, it was placed at number 12 globally by the same index.

DLD Director-General Sultan Butti bin Mejren said in September that total property transactions crossed Dh162 billion in the first nine months of 2013 compared to Dh90bn same period last year.

Dubai raised registration fee from 2 per cent to 4 per cent of the property value from October 6 aimed at eliminating speculators and controlling price volatility.