The UAE Cabinet recently approved an extension of compulsory employer-funded health insurance for private sector employers to provide health insurance coverage to their employees and domestic workers to the remaining five Emirates, where the scheme is not currently compulsory, effective 1 January 2025. This will ensure that mandatory employer-funded health insurance, which was first implemented in Abu Dhabi in 2005, will now cover the entire United Arab Emirates.

The current law requires private sector employers in Dubai and Abu Dhabi to provide at least a basic level of health insurance coverage to their employees upon issuing or renewing their residency visa. However, this did not apply to employers based in Sharjah, Ras Al Khaimah, Ajman, Fujairah, and Umm Al Quwain. This significant decision extends this requirement to the remaining five Emirates, where it was previously optional for employers to provide health insurance for their workers. 

At this stage, we await further details on the rollout of the nationwide mandatory health insurance scheme, including how it will be implemented and whether it will be rolled out in phases, as was the case in Dubai and Abu Dhabi. We also await further details on the regulatory regime to be applied to insurers, brokers and TPAs, which health authority will be responsible for overseeing the scheme in the northern Emirates, as well as the different types of benefit packages that will be available and the associated costs. We anticipate this will be made clear in the regulations to be issued. 

With the UAE's population projected to grow, the decision to establish a nationwide health insurance scheme is a positive announcement for the health insurance sector, with health insurers' risk pools set to expand and health insurers capitalising on the expansion of the compulsory health insurance scheme across the northern Emirates. 

While we await more details on the scheme's specifics, we recommend that health insurers, brokers and TPAs assess their licensing and distribution structure in these additional Emirates. Foreign health reinsurers that currently provide health insurance coverage outside Dubai and Abu Dhabi on a non-admitted basis should be discussing their offerings in these northern Emirates with their local partners to ensure they are well-positioned to benefit from this legislative change.

For further information, please reach out to one of our specialists, Wayne Jones and Nasteho Muse.