Introduction of Health Insurance
Package for Employees

Regulatory Information:

Notification/Circular no: Launch of Basic health Insurance Package

Notification date: December 16, 2024

Updates in Compliance:

Summary:

The Ministry of Human Resource & Emiratisation has launched a competitively priced basic health insurance package for private sector employees and domestic workers across the UAE who are not currently covered by any insurance, as part of the Health Insurance Scheme approved by the UAE Cabinet.

This package was earlier mandated only for Dubai and Abu Dhabi. The new mandate extends this to the remaining five emirates as well making it applicable across UAE.

The package starts from AED 320 per year, ensuring comprehensive health care benefits for employees nationwide. The amount of benefit shall be provided subject to the type of care (inpatient and outpatient) and co-pay amount payable.

Effective Date: January 01, 2025

Amendment:

1. The health insurance scheme will extend coverage to workers in Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah.
2. The policy is valid for two years, and the second-year premium can be refunded if the visa is cancelled.
3. The basic insurance package costs AED 320 per year, with no waiting period for workers suffering from chronic illnesses. It covers individuals aged 1 to 64 years, while those over this age must complete a medical disclosure form and attach recent medical reports.
4. The package covers treatment expenses with a 20% co-payment for inpatient care (i.e. patients hospitalised for medical treatment or surgeries). The insured pays a maximum of AED 500 per visit with an annual cap of AED1,000, including medications.
5. Beyond these limits, the insurance company covers 100% of treatment costs.
6. As for outpatient care (patients requiring medical visits, diagnostic tests, or minor procedures that do not necessitate a hospital stay), the co-payment is 25%, where the insured pays a maximum of AED 100 per visit. No co-payment is required for follow-up visits for the same condition within seven days, while co-payments for medications are capped at 30%, with an annual cap of AED 1,500.
7. Dependents from the worker’s family can access the same benefits and pricing, as specified in the insurance policy.
8. The newly introduced insurance package targeting private sector workers and domestic workers is available through the Dubai Care Network.

Our Analysis:

1. The UAE’s new health insurance scheme is a progressive step toward universal health coverage, addressing gaps in the current system and enhancing the well-being of its workforce.
2. Employers are now required to provide the above health insurance package to all private sector employees and domestic workers, including those in the Northern Emirates (Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, Fujairah). This ensure that 100% of workers in UAE are covered by Health Insurance.
3. Employers must provide valid health insurance for their employees as a precondition for obtaining or renewing work permits. Applications for new work permits or visa renewals will not be processed without proof of active health insurance coverage.
4. The basic health insurance package does not apply to employees with work permits issued before 1 January 2025 that remain valid and will only become mandatory when their residency permits are due for renewal.
5. Thus, obtaining Health insurance package and incurring additional expenses for managing and renewing policies adds to the cost of the company.