Under the regulation of the Health Authority of Abu Dhabi (HAAD), Health Insurance for Abu Dhabi residents and visa holders has been mandatory since January 2006. So the rules and regulations are in a mature state, and this market remains relatively stable and unchanged.
During 2017, there were only two notable revisions.
1) The UAE government withdrew subsidies to the National Insurance Company (Daman) in conjunction with their “Basic Plan” offering.
The “Basic Plan” provides the minimum mandatory coverage for low salaried workers (defined as those earning less than AED 5,000 per month). It was previously priced at AED 600 pppa.
Following the withdrawal of government support, the same plan is now charged at AED 800 pppa for those aged 18-59 years and AED 5,500 pppa for those aged 60+ years. At the same time, broker commissions for Basic Plans have been capped at AED 10 per policy. This has naturally encouraged the already commonly accepted practice of obtaining this coverage directly from the insurer.
2) The HAAD regulations impose the responsibility of Health Insurance provision upon the sponsor/employer for the employee, one spouse and up to 3 children under the age of 18.
The rules state that no employer is able to pass on any of the costs of this health insurance provision to the insured lives. However in practice (and whilst this is not encouraged), the regulations have been relaxed and Abu Dhabi employers are allowed to charge back up to 50% of the premium incurred in relation to an employee’s dependants.
Under the regulation of the Dubai Health Authority, (DHA), Health Insurance for Dubai residents and visa holders was phased in over the last 3 years, with the final implementation of fines and links to immigration visas only becoming effective April 1, 2017.
As with any new legislation, aspects of the rules are still evolving, so this market is fast moving and ever changing. As a result there have been a number of changes in 2017.
- The DHA approved another three Participating Insurers (PI’s), taking this to a total of 12 PI’s by mid 2017. The main differentiator of the PIs is that they are the only Insurers entitled to offer health insurance schemes to the LSB employees (Low Salary Band workers earning AED 4k per month and below).
- Dubai Basic Plans (known as EBP’s) have a regulated premium index ranging from AED 500 to AED 700 pppa. Over the past three years, premiums in this space continue to be reduced by insurers, given increased competition alongside a positive claim experience, to the point that in 2017 the majority of PI’s are now offering EBP’s around the premium benchmark of AED 550 pppa.
- Throughout 2017 the market reacted to some of the benefit restrictions that apply to the minimum mandatory requirements. This encouraged many PI’s to create a new range of products called “Enhanced EBPs.” The objective of these new products is to remain price competitive, offer slightly higher benefits/reduced co-pays and some scope for access to a wider network of providers.
- The DHA recently introduced a broker commission cap of 5% on all Health Insurance policies pertaining to LSB workers. It is important to note that this cap does not just apply to EBP policies; it pertains to any Health Insurance policy (including enhanced options) provided to this category of worker. This move has promoted the growing trend of (particularly) EBP policies being placed directly with the insurers.
- Backdating member inception dates is no longer allowed. The only case where backdating is allowed is for New Born children, where an insurer can backdate up to seven days to achieve insuring the child from birth. There are no other circumstances or situations that allow backdating for any reason.
- Member cancelations have also been ruled upon, whereby insurers must now maintain coverage for a period of 30 days after the visa cancelation date, unless the natural policy term expires earlier. The coverage insurers are required to maintain during this period must at least extend to emergency expenses. However the DHA encourages insurers to maintain the existing benefits, and this is the stance that most appear to be taking. The extended cover period seeks to align with the 30-day grace period that expats have for final exit from the country.
- The DHA is very active in raising awareness and achieving the objective of providing high quality health services to everyone living in Dubai. The latest trends and initiatives are promoting wellness and preventative measures.
- The DHA announced the launch of a “Basmah” initiative, making Dubai the first government entity in the world to provide a complete spectrum of care from screening to treatment for three types of cancer, with extended coverage for such under the EBP Mandatory Health Insurance Scheme. Basmah is an initiative of the DHA’s Health Funding department. Under this initiative the EBP (DHA basic benefit plan) now covers screening as well as treatment of breast, colorectal and cervical cancer. Screening is based on international screening criteria. Treatment will no longer be capped to the standard minimum annual limit of AED 150,000 of the EBP plan. Under the scheme, those detected with these cancers receive full coverage throughout treatment at Dubai Hospital or at other recognized centers of excellence in cancer care in Dubai.
VAT in the UAE
As of January 1, 2018 Value Added Tax (VAT) will be applicable across the UAE.
Starting from 1st January 2018, all insurance premiums (except for life insurance), fees and commissions will be subject to VAT applied at a rate of 5%.
In addition, all premiums already invoiced in 2017, but where cover is being provided into 2018, are also subject to VAT under transitional rules published in the Executive Regulations. As a result, insurers are issuing additional invoices to collect VATs due on premiums earned in 2018. Insurers are currently preparing to issue these related invoices during the 1st quarter of 2018.
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