All private-sector workers and domestic staff across the UAE must have health insurance paid by their employer from next year, according to a new ruling.
Previously, only employers in Dubai and Abu Dhabi were obliged to pay for their staff's health care.
The ruling marks the establishment of a nationwide standard for health insurance, which was previously left to the discretion of authorities in each emirate. This meant it was optional for workers in the Northern Emirates.
The UAE Cabinet ratified the establishment of the new system "for registered employees in the private sector, and the domestic workers who do not have existing health insurance", according to a statement released by the office of Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai.
Under the new terms, employers of private-sector staff and domestic workers must pay for health insurance coverage for their workers when issuing or renewing a visa.
The nationwide health insurance rule will be enforced from the beginning of January 2025, the statement said.
Boost for workers
"Up to now it was the case that only employers in Abu Dhabi and Dubai had to provide health insurance for employees when they were issuing or renewing a visa," said Neeraj Gupta, chief executive of insurance comparison site Policybazaar.ae.
"This means that from January, every employer across the UAE will have to do so.
"There are some details that we're waiting to hear about such as whether or not it will apply only to new visas and renewals.
"Or will it also apply to those whose visas still have some time to go before being renewed?"
The move to make mandatory health insurance nationwide was a welcome step, another insurance expert said.
"It places a timely responsibility on both public and private sectors to bring all employees, including the largely underserved domestic workers, into the insurance fold," said Faisal Abbas, vice president of employee benefits and general insurance with The Continental Group.
"All companies and institutions, particularly in the Northern Emirates where insurance penetration is relatively low, must earmark a sizeable dedicated budget for corporate health insurance and ensure all employees are insured comprehensively before the deadline.”
Closing healthcare gap
The move has been hailed as an important step for the Northern Emirates, a leading health expert said.
"While healthcare coverage has been prevalent in Abu Dhabi and Dubai, the Northern Emirates have remained underserved in this regard," said Dr Raza Siddiqui, executive director of Ras Al Khaimah Hospital and chief executive of Arabian Healthcare Group.
"The absence of insurance has posed challenges, with many companies failing to provide essential healthcare services.
"Consequently, individuals have often resorted to seeking inadequate treatment from general practitioners or bearing the financial burden of medical expenses themselves.
"Tragically, some have experienced severe consequences due to delayed medical intervention."
How will it work?
There are three tiers to the new system, a senior official from the Ministry of Health and Prevention told The National.
"The basic package will cost around Dh750 [$204) per year,” said Abdullah Ahmed Ahli, acting assistant undersecretary for the support services sector at the ministry.
"The second package costs Dh3,500 and the advanced package starts from Dh7,500. Each package will have different benefits and all provide extensive health coverage."
The ruling will remove the financial burden from domestic workers and those working in the private sector, he said.
“The health insurance system will provide comfort to the employees and their families knowing they will have proper health care in emergencies or when they fall sick," said Mr Ahli.
"It will boost employees' productivity, which will have a positive impact on companies' performance.
“The system will provide health insurance to every individual regardless of their income level.”
The Ministry of Human Resources and Emiratisation will introduce campaigns and programmes in the coming months to raise awareness and educate employers about the new rules.
What are the current rules about health insurance?
It is currently mandatory by law for employers in Abu Dhabi and Dubai to provide each worker with at least a basic level of health insurance under the Essential Benefits Plan for anyone earning less than Dh4,000 a month.
Anyone earning more can benefit from a broader health insurance plan provided by an employer, offering access to more hospitals and services, such as dental and optical coverage.
Basic coverage in Abu Dhabi gives workers access to Dh250,000 of care but pharmacy expenses are capped at Dh1,500 a year.
In Dubai, the annual limit provided by basic care is Dh150,000, with a pharmacy limit of Dh1,500.
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Company name: Letstango.com
Started: June 2013
Founder: Alex Tchablakian
Based: Dubai
Industry: e-commerce
Initial investment: Dh10 million
Investors: Self-funded
Total customers: 300,000 unique customers every month
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Company: Justmop.com
Date started: December 2015
Founders: Kerem Kuyucu and Cagatay Ozcan
Sector: Technology and home services
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
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Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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A High Court judge issued an interim order on Friday suspending a decision by Agriculture Minister Edwin Poots to direct a stop to Brexit agri-food checks at Northern Ireland ports.
Mr Justice Colton said he was making the temporary direction until a judicial review of the minister's unilateral action this week to order a halt to port checks that are required under the Northern Ireland Protocol.
Civil servants have yet to implement the instruction, pending legal clarity on their obligations, and checks are continuing.
