Mandatory employer-covered health insurance to take effect soon

IMPACT – HIGH

What is the change? On Jan. 1, two Dubai free zones will implement a law that requires companies to cover all employees with basic health insurance, and it is expected that all immigration offices in Dubai mainland and all free zones will also adopt the rule in the near future.

What does the change mean? Employers in the Dubai mainland and free zones should be prepared for this new rule, as they will have to purchase and provide proof of employee health coverage before they can renew visas and licenses.

• Implementation timeframe: Jan. 1 for Dubai Multi Commodities Centre (DMCC) and Dubai Silicon Oasis (DSO) Free Zones; an official date for Dubai Immigration and other free zones has not been set, but it could happen as early as January 2015.
• Visas/permits affected: All work visas, renewals, transfers, trade licenses and establishment cards.
• Who is affected: Companies operating in Dubai mainland and free zones.
• Impact on processing times: The new requirement should not cause processing delays as long as employers provide proof of insurance for their employees.
• Business impact: The law will impact the cost of business and add another prerequisite to visa applications.
• Next steps: Companies should plan for this change.

Background: Dubai passed a universal healthcare law one year ago. The law requires employers to provide all employees, including foreign workers, a minimum health insurance plan from an insurer authorized by the Dubai Health Authority. Dubai planned to roll out the programbeginning in 2014 with the largest employers and phasing in medium and smaller employers by 2016. However, implementation has been spotty and official dates have been difficult to ascertain.

So far, only the DMCC and DSO Free Zones have officially announced they will implement the employer-paid health insurance system on Jan. 1.

Dubai Immigration and all free zones are expected to follow shortly thereafter, although no official date has been set.

BAL Analysis: Companies in the DMCC and DSO Free Zones should make sure they are ready for the imminent change. Because the new system will impact nearly all visa applications and renewals for foreign workers and licenses and establishment cards for companies, employers in Dubai mainland and all other free zones should prepare as soon as possible for this requirement, which could take effect soon with little notice.

This alert has been provided by the BAL Global Practice group and our network provider located in the United Arab Emirates. For additional information, please contact your BAL attorney.

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