Dubai moves fast on all-inclusive health insurance
Its full implementation would have a qualitative impact on provision of health care.
With the growing expatriate population, we have seen a strategic move by Dubai Health Authority (DHA) to provide residents with access to health care through a long-awaited mandatory legislation.
The cover was implemented as of October 31, 2014, and is being rolled out in phases, with the aim of having all Dubai residents insured under private medical policies by the end of June 2016.
In recent years, we have seen the implementation of mandatory health care in Saudi Arabia and Abu Dhabi.
In Dubai, the reforms are in their second phase. Phase 1 targeted larger organisations and is said to have affected 300 companies with a total of approximately 700,000 employees. Phase 2, which is underway, impacts organisations employing between 100 and 999 personnel and has a deadline for the end of July.
Phase 3 affects organisations with less than 100 employees, as well as all other Dubai residents, including domestic staff, spouses and dependents. This final phase has a deadline for end June, 2016, with the ultimate aim being that all health care coverage for expatriates will be linked to the issuance of residence visas.
The stipulation for the Dubai directives is that it is the employer’s responsibility to cover its workforce. Unlike the legislation in Abu Dhabi and Saudi Arabia, a Dubai-based employer is not responsible for covering the spouse or dependents.
However, it is worth noting that family cover that is fully paid by the employer is currently the typical market practice in the UAE.
Essential Benefits Plan
Also, under the DHA scheme, special consideration has been given to employees earning less than Dh4,000 a month. This category of employees must be insured with one of the seven approved insurers authorised to offer the ‘Essential Benefits Plan’.
Although the benefits under the mandatory minimum are quite basic, there is still some action to be taken by employers to ensure that their plans are compliant. To assist employers currently preparing for their DHA deadlines, as well as to help employees keen to know how they will benefit from the changes, Mercer has outlined the main areas of consideration.
We have highlighted these, along with our predictions for some non-mandatory elements that may also become a feature of health care plans across the region.
The new DHA legislation mandates an element of maternity cover. This is a benefit that is typically offered under most medical policies, however some organisations exclude cover for certain employee levels, mainly blue-collar workers. Employers will now have to provide the minimum level of cover across all employee levels.
Under the new directives, at least eight outpatient maternity visits must be covered for check-ups and tests. Inpatient maternity must be covered up to Dh7,000 for normal delivery and Dh10,000 for complications in childbirth. Newborn babies must be covered under the mother’s policy for 30 days.
There are still a number of organisations that do not provide cover for vaccinations under their medical policies. This benefit will now have to be included for children under the medical plan in line with the Ministry of Health list.
Moreover, while it is common for medical policies to cover companion accommodation for children admitted for inpatient treatment, that for adults admitted with a critical illness now have to be included as part of the plan design. Currently, this is not prevalent under Dubai policies.
Although organisations increasingly recognise the importance of preventive care for the early detection of illness — and including wellness checks as part of their medical policies — this is still not typical market practice.
Due to the high prevalence of diabetes among residents, DHA has mandated diabetes screening as part of plan design. This is required as a separate benefit, even where a general wellness check or health screening is already covered.
One of the major changes we expect to see relates to outpatient deductibles and co-payments. Current market practice is to apply a fixed deductible payable only on outpatient consultations. However, the DHA has stated that while a fixed deductible can be included under a plan, this cannot exceed 20 per cent on outpatient treatment or 30 per cent on prescription medication. In the long run, we expect to see a move towards co-payments.
This is due to the fact that a co-payment is more effective as a cost containment method than a fixed deductible as it influences claimants’ behaviour when choosing a health care provider. As their financial contribution will be linked to the treatment charges, they are less likely to automatically visit higher cost facilities.
A requirement for a GP referral to visit specialists is an element that is common market practice in many countries, however not common regionally as most medical policies currently allow direct access to specialists without any ‘gatekeeper’. This is a positive move as it ensures appropriate pathways to care and potentially supporting cost containment in the long term.
For those employees living or working in Abu Dhabi but are doing so on a visa issued from another emirate, the Health Authority of Abu Dhabi (HAAD) legislation mandates that all such employees must be covered on a HAAD compliant plan. There has been some debate around whether employees on a Dubai visa in these circumstances should be on a DHA compliant plan or a HAAD compliant plan.
At the moment, from an insurer’s perspective, the view is that those employees should be enrolled under a HAAD compliant plan as the benefits required are more generous under the HAAD mandate. The Employer Information Pack issued by the DHA in 2014 mentions that those employees should be on a DHA compliant plan with a ‘HAAD top-up,’ but did not provide details on how the top-up would be implemented. We expect more clarity around this over the coming months.
As of 2016, it will be the employees’ responsibility to purchase medical policies for their dependents living in Dubai. Although the onus is not on the employer, Mercer expects a push from workers to include their families on the corporate medical scheme in organisations where the company only provides cover for its employees.
In those cases, the companies can either work with their insurers to obtain discounted individual policies for families that will be paid for by the employees and remain outside of the corporate medical plan, or alternatively allow for employees to opt in for family cover but contribute towards the premium.
It is worth noting that this may affect the group’s claims experience, as we typically see dependents claims accounting for at least 60 per cent of total claims spend.
Employees on ‘expat’ contracts that are typically covered through global expat medical plans will have to be included under local compliant cover. This could lead to double coverage in cases where the expat policy is placed with an insurer that does not have a local partner.
As a final important piece of information, it should be noted that existing medical policies can continue in their present form until the first renewal date (no later than 12 months) after the applicable implementation date. After this, all benefits must be aligned with at least the mandatory minimum.
However, any new plans established as of the January 1, 2015 are obliged to comply with the new requirements — a stipulation that includes existing policies that have been moved to a different insurer regardless of headcount.