Tim Elliot: Welcome to Lawgical, the U.A.E.’s first, and really the only, regular legal podcast, live on TikTok today as well as we will be from here on in. My name’s Tim Elliot. Lawgical comes to you from the Dubai-based legal firm, HPL Yamalova & Plewka, here in JLT. As always, here’s the Managing Partner, Ludmila Yamalova. It’s good to see you.
Ludmila Yamalova: Tim, good to see you too, and thanks for being here today and for embracing this new medium that we’re experimenting with, but we figured it would be an interesting opportunity for all of those followers who have been with us, listening to our podcast for – how long has it been now? Two years, three? Two plus.
Tim Elliot: It’s going to be three years this summer.
Ludmila Yamalova: Three years. We’ve recorded almost 200 podcasts together, so this is a bit of sneak preview, behind the scenes, of what it is that goes on when Tim and I get together and make our magic happen.
Tim Elliot: Yeah. No mistakes to make. Just keep talking. They won’t notice. What I want to do today is talk about health insurance and really give on overview of health insurance, because it’s been a while since we’ve all had to have health insurance. We’ll get into the details in a second. It’s been mandatory in Abu Dhabi and Dubai here in the U.A.E. for some time. I think it’s worth starting there because the simple fact is, if you want to get a residency here in Dubai, in Abu Dhabi, in the U.A.E., in most cases you have to have medical covered, don’t you?
Ludmila Yamalova: Well, the short answer is yes, technically speaking, and this is because under the Federal immigration law there is a requirement, perhaps for every type of visa, in terms of requirements submitted to the authorities, in order to qualify and receive a visa, of health insurance coverage. The requirement, technically speaking, is there on the books and expressly written out in the laws. However, in practical terms, from we have seen so far, that’s not a document that is required to be presented for most types of visas. For example, if you’re applying for a golden visa or for a green visa or even if you want to sponsor your family to come and visit, there is acknowledgement that yes, you will be providing health insurance, but there isn’t really a requirement to actually show that you have already obtained health insurance.
There is an exception to that, and that is for employers who sponsor the employees as part of the application itself, before employees receive their residency permit from the authorities to work for that specific company, the authorities do actually require proof of health insurance. For example, if you work in TECOM or the DMCC or any of the other free zones, then as a company, when you hire a new employee, or even renew your employee for purposes of a residence visa, you need to submit to the authorities a copy of the health insurance plan or the health insurance coverage. At least as far as employment is concerned, there is an effective way not to just to state on the books that the law is there, but actually enforce the application of this law by virtue of actually requiring companies to present health insurance coverage proof prior to issuing the residence visa.
Tim Elliot: Okay. And that applies to dependents. So, if I come here with my wife and kids and I’m sponsored, for them to have the stamp officially in the passport medical insurance has to be in place for them as well.
Ludmila Yamalova: Yes. Let me perhaps take a step back and set out the legal framework in terms of the health insurance coverage in the U.A.E. in general. At a high level, and by way of reminder to those who perhaps don’t remember or don’t know, the U.A.E. is a federal state that has seven emirates. With regard to health insurance, it is regulated at both levels, the federal level and the emirate level, in one way or another.
Let me start with the emirate level, because it is a little more established. There are two specific emirates that have had health insurance as part of their regulatory framework for a number of years. Those two emirates are Dubai and Abu Dhabi. In fact, Abu Dhabi has historically led the way with regard to health insurance and requires for all residents and for companies in particular who sponsor their employees and in the past, all employees were sponsored by their companies to provide health insurance to their employees and also for their dependents. Abu Dhabi had that law as long as I have been here in the U.A.E., which has been quite a number of years by now.
Then perhaps about seven or eight years ago, if my memory serves me right, actually in 2013, so 10 year now, in 2013 Dubai introduced the law with a requirement of health insurance into the system.
Let me actually be a little more specific. In Abu Dhabi, it was in 2005, and that was Law 23 of 2005 regarding health insurance in Abu Dhabi. That is the main law as far as Abu Dhabi is concerned, and that law was further clarified by virtue of regulations that were issued a year later, and that was Executive Council Decision 25 of 2006 regarding executive regulations to the health insurance law. That is in terms of legal authority in Abu Dhabi. The requirement of health insurance and the legislative framework was introduced in 2005.
Then in 2013, Dubai followed suit and introduced its own law, and that was Law 11 of 2013 and that was called the Dubai health insurance law, if you will. Then just recently, in fact last year, Dubai issued additional Administrative Decision 78 of 2022 regarding executive regulations to that same health insurance law. The main law was introduced in 2013 and then last year, nine years later, further regulations were introduced to add on to the main law in Dubai.
In summary, as things stand today, Dubai and Abu Dhabi are the two emirates where health insurance at the emirate level is expressly stated in the law as being a requirement for all residents in the U.A.E. These are the two emirates, I can tell you today, where legally speaking health insurance is required for all residents.
For the other emirates, those are Ras Al Khaimah, Sharjah, Ajman, Umm Al Quwain, they do not have similar laws, at least that we are aware of, that make health insurance specifically a requirement or set out a legislative framework for those emirates or require sponsors or companies, for example, to provide health insurance to their employees.
However, at a federal level, if you take it higher up, as I mentioned earlier, there is this new – in the interest of efficiency, we will call it the U.A.E. immigration law, and that is the law on residency. This is the federal law. This is the law, by way of reminder, that introduced various types of visas which has been quite an exciting legislative authority because it has introduced so many different types of visas into the U.A.E. labor market and for the U.A.E. economy, and it has been a much celebrated law. This is the law that introduced the golden visas, the green visas, the probation visas, the various family visas, the multiple tourist visas. You and I have done multiple podcasts on the various types of residence visas and various types of visas based on this very law. Also, I have done a number of dedicated social media updates for the various types of visas because there are so many, and they have been so popular and been so celebrated because they have been of such great benefit and a utility to so many people out there, and obviously the country has, at least in my experience, has seen the tremendous benefits of having these visas made available and seeing so much more investment coming into the country and perhaps in the labor market itself becoming a lot more robust because there are that many more options now for various types of professionals to stay and live in the U.A.E. without having the dependent relationship which had existed in the U.A.E. perhaps from the beginning of the formation of the country until about a year ago.
Therefore, as we go through the process and in this discussion, I just want to set out that general legal framework in terms of which emirates have which laws, so when we say it’s required, certainly as far as Dubai and Abu Dhabi are concerned, health insurance is required. With regard to other emirates, technically speaking, all the residents who live in other emirates are also required to have health insurance, and whether that is being enforced and how it is being enforced at the immigration level remains to be seen. But it places like Dubai and Abu Dhabi, because they have had their own laws so much longer, there are now different mechanisms built into the system that act as enforcement in the application of this law.
As I mentioned earlier, if I work in Dubai, all those companies that are based in Dubai, whenever they apply for residency for their employees they have to present the evidence of health insurance to the authorities as part of the application. For example, when you submit the employees’ passport copies and their educational certificates, copies of their pictures and the application that is submitted in order to apply for the visa, you will also need to submit a copy of the health insurance. It’s important because actually a lot of people don’t know about it. Still to this day, we hear a lot of comments from employees saying my company is not providing health insurance or my company didn’t give me health insurance. If they work in Dubai, their health insurance has to be there, and it has to be there by virtue of this built in, automatic mechanism that ensures that all employees have health insurance.
Tim Elliot: So, whatever it is, it must be in place. If you’re not aware or you think you don’t have health insurance, if you have a Dubai visa or an Abu Dhabi visa, you do, and it might be the case that your company has just not told you because you’re not going to use it, premiums won’t go up, or whatever the reason might be.
Ludmila Yamalova: Exactly. I’m trying to figure out a way perhaps to explain how it is that so many employees, especially living in these two emirates, would believe that they don’t have health insurance coverage, because as long as they have a visa, they must the health insurance coverage. I have been able to extrapolate a few theories about what is really happening. I think on the one hand, for a lot of companies there are public relations officers (PROs) that process employee visas. The PROs do this and apply for dozens or hundreds of residencies, not just for that particular company, but for multiple companies and multiple clients, and they just are used to submitting this general packet of information and documents to the authorities and they don’t really give much more consideration to this additional document, which is called the health insurance certificate for the particular employee, than whatever else is in the file. For them, it is just a piece of paper and a requirement that goes through the system. Because it is the PROs often that process the visas, the employees of the company are not necessarily involved at that level to actually update employees that as part of the application they have health insurance coverage. That is one theory and one suggestion on why employees are ignorant about the existence of this coverage. It is because it is not being communicated to them through the proper channels.
It may be that even as far as some companies are concerned, there is a breakdown in communication between the HR department and whoever it is that processes visas, and the employees, depending on the level of the employees, they don’t necessarily appreciate the importance of sharing this information with the employees. That could also be a reason. Then, I think maybe a third theory is that people think that these certificates are just a minimum basic coverage, and we can talk about it separately. It is basic coverage called an essential benefit plan that is a standard health insurance being provided by the insurance companies and people think X amount of money is just paid per year just to tick the box in terms of the requirement, and it does not actually cover very much. Because of that, they believe that they don’t really need to explain or let their employees know that they have this coverage because they don’t think this coverage means very much.
Tim Elliot: Okay. But if you want to live in Dubai or Abu Dhabi, you have to have health insurance. Whether you’re aware or not, you’re stating now that you do have it, and it has to be the case to get the visa stamp on your passport. Here in Dubai the law applies to mainland companies. It applies to free zone companies, and it applies to the Dubai International Financial Centre Free Zone, I think I am right in stating that, and it’s codified under the Dubai health insurance law, you mentioned that, and the executive regulations of that law.
Ludmila Yamalova: Well, if you want to talk about Dubai, it’s interesting because we recently bolstered our research on health insurance laws and regulations in Dubai and in short, we have identified about 120 different regulations, laws, regulations, directives, circulars, notices and guidelines issued by various authorities in Dubai in connection with health insurance. As far as Dubai is concerned, it’s a very robust legal framework and there are so many legislative and legal authorities to rely on with regards to health insurance industry. Because it is not just about the health insurance requirement, but it is also for the health insurance companies themselves, for the health insurance providers, for hospitals, for submission of claims, that each one of these aspects of the health insurance industry is regulated by a variety of laws. In Dubai, as I said, we have at least 120 and there is a specific resolution in Dubai that sets out fees and penalties regarding health insurance coverage, and that is Executive Council Resolution 7 of 2016. It has been around for quite some time. Also, there is the Executive Council Resolution 16 of 2013 regarding health insurance for Dubai government employees, another legislative authority, and there is another one, Resolution 17 of 2018 regarding entities subject to the Dubai Health Authority and their competence. Then, as I mentioned earlier, one of the most recent ones is Decree 8 of 2022 regarding the application of the Dubai health insurance law in the Dubai Healthcare City. As far as Dubai is concerned, there is a lot to draw from and to draw on.
This is also one of the reasons why I wanted and I thought it was timely to talk about this specific topic because the law has been around for a long time and it is unequivocal in the mandatory application and also the penalties that apply are pretty severe. Yet, we hear over and over and over again, oh my company didn’t give me health insurance and I don’t have health insurance. I just shake my head and wonder how could this still be the case. I think perhaps sharing this with the greater public and educating, not just about the existence of the law, but also sharing the particular penalties and consequences of the breach of this law is equally important.
Tim Elliot: That’s really interesting to me because what you have said in the last 10 minutes is if you live in Abu Dhabi or Dubai you have health insurance. You do. You just do. To get the visa stamped, you need it. And yet, people think they don’t. It’s incumbent upon the sponsor, isn’t it, the employer sponsor, to provide it. That is how it is.
Ludmila Yamalova: Yes. That brings me to a good question, to phrase it in a more specific way, and that is, who does the requirement apply to? In the context of employees, as I have mentioned, employees are basically, especially employees in Dubai and Abu Dhabi, by default covered by health insurance, and there is an enforcement mechanism to ensure that companies actually provide health insurance to the employees, although as we know people are still not aware of it. Generally speaking, the requirement of providing health insurance lies with the sponsor. This is an important point because until recently there were limited sponsors. You had the company that would sponsor or you had the family member that would act as a sponsor and to sponsor dependents. Those were the two types of sponsorships.
Now with this new residency visa or the new immigration visa in the U.A.E. there are a lot of different types of sponsorships and different types of visas and such, but still at a high level, the requirement for health insurance lies with the sponsor. Let’s say in the case of employees, employees who are sponsored by their companies, the obligation to provide health insurance is on the company.
For all those family members who sponsor their dependents, their family members, the obligation is on the sponsor, i.e., the main family member. Or, for example, if you are a resident here, and you are sponsoring tourists or visitors into the U.A.E., once again, because you are considered to be the sponsor, also the obligation is on that party to make sure that the health insurance is provided.
Even more notably, in the context of the golden visas, because what is a golden visa, or a green visa, for that matter? It’s a self-sponsored visa. You are sponsoring yourself. Who is the sponsor? You are the sponsor. This is very important because it’s clear at present that this is not yet known or understood by many golden visa holders. This is by law, and perhaps not so much enforced yet by the system, and that is, as a holder of a golden visa, you are required to have health insurance, and it is required because you are your own sponsor. The laws, in particular the residency laws, specifically state that one of the requirements to qualify for a golden visa is to have health insurance coverage. Although, from what we have seen so far, that is not yet enforced. In other words, when you apply for a golden visa, the immigration authorities do not ask you to prove or show a copy of your health insurance as part of the application. The enforcement part we have not quite seen yet, but perhaps it is just a matter of time because this is a fairly new type of visa and a new law. But that is one interesting example. A lot of golden visa holders might have the golden visas because they are so popular, and they may actually not have health insurance just yet because they are not aware that this is actually mandatory by law.
Furthermore, and this is quite important and is another level down to it, is that as a golden visa holder, one of the greatest benefits of the golden visa, in addition to self-sponsorship for 10 years, is that you can sponsor a variety of your family members. There is a lot more flexibility now in terms of who you can sponsor than existed before. You can sponsor your parents, your children, irrespective of age. One of the other benefits – there are so many great benefits to golden visas and as I go through this I am reminded, but we have done these dedicated podcasts on golden visas specifically – but one of the other benefits for many people is that there isn’t a requirement of having to come back into the country every six months, and therefore this really works for a lot of people who, for example, live here and have family members that live nearby, let’s say in India, Pakistan, the GCC, and who come to visit every so often, not necessarily every six months. Now, if you live in the U.A.E. and have a golden visa, a lot of these golden visa holders are sponsoring their family members because it’s easier to do and there isn’t this requirement of renewing every two or three years and so on and so forth.
What we have seen is an increase of golden visa holders sponsoring their family members. But as part of it, and it is actually quite a fast process as well, but many of them are not aware that they actually have to by law provide health insurance to all of their family members. Let’s say if you have mom and dad living in Oman and Kuwait and you live here, as long as they are your dependents, technically speaking, in terms of the law, you as a sponsor are required to provide them with health insurance. That is just how the law is structured, and that also applies in the context of hiring domestic employees as well. They are your responsibility. You are their sponsor, and you are supposed to provide them with health insurance. That is overall the order of things in terms of who is responsible.
There is one more nuance to this, and this question comes up quite often because now so many more employees are now self-sponsored on their own golden visas, but yet they work for a company. The question is, who has the obligation to provide health insurance in that case? If you work for me and you have your own golden visa, as a company, am I obligated to provide you with health insurance, or is the obligation on the sponsor and not the employer necessarily? In short, what we have been able to extrapolate from all of the laws is that the obligation does still lie with the sponsor, not the employer.
For example, if you work for me and you have your own golden visa, you are required to have your own health insurance. I am not obligated to provide you with health insurance, although you work for me, and that’s by law. Now certainly by contract, I can offer you health insurance, and we are seeing more of that now that more employees are going onto golden visas. The companies still offer them health insurance as a benefit as part of their corporate plan.
Tim Elliot: Lots of golden visa holders are thought – in the original case of the golden visa, it was just a 10-year visa and it was people who were seen to have made a contribution to the country and to the economy. I guess lots of those people were employed, so the way things were, they were provided with health insurance, but we may be seeing a shift slightly away from that. Is that what you are intimating?
Ludmila Yamalova: At least in legal terms, yes. I will tell you from a lot of practical experience, from our own practice and on behalf of our clients, we have seen this shift. A lot of companies are asking, because they notice their employees now want to go on their own golden visa because it gives them a sense of freedom, and for other reasons as well, it is just more beneficial for many people to have their own golden visa if they qualify, so the companies ask, how does that affect us as a company. Obviously, one benefit to the company is not having to pay for their health insurance. The fact is, for a lot of companies, health insurance is a group plan, especially the bigger companies. Whether they have 10 people or 20 people in terms of premiums and packages, they can actually benefit from better coverage if they have more people included in their plan. For a lot of companies, the additional expense is fairly marginal. This is still history in the making. We are seeing this develop and evolve before our eyes, so it is too early to tell which way the trend will shift, but in the meantime I would imagine that it won’t really change much of the dynamic in terms of the companies’ wanting to offer that benefit by default as part of their group plan nonetheless. But certainly, for all those golden visa holders, it may be that they just want to have their own policy because it is easier to control the policy or maybe they want to have a choice of what kind of policy.
But it is also important to dispel some rumors we have heard over and over again, that I am not allowed to have two insurance policies. If you a golden visa and you have your own basic insurance policy, you still can have an add-on insurance policy through your company. We have heard from many that somehow they are being told by insurance companies or employers that they are not allowed to have two health insurance policies, but that is not true. They are allowed. Obviously, you cannot double dip. You cannot get the same claim covered twice by different insurance providers, but certainly, you can use them to complement coverage between your own private insurance and your corporate insurance.
Tim Elliot: There is not an insurance company on earth that wouldn’t take your business. Let’s be completely honest. As you would expect in a market of the size of Dubai, there are lots and lots of different policies and group plans. There is a lot to choose from. I think we should point that out. What I’m interested in, is if you don’t communicate to an employee or a person that you sponsor that they have medical insurance, what kinds of penalties apply?
Ludmila Yamalova: Interestingly, the penalties are varied and it depends on the underlying offense. But perhaps before we go into the penalties, I can delve a little bit into the basic coverage, and that is for all those who think that they don’t have health insurance because they are not being told who are sponsored by their companies, for example, but are being told that they don’t have health insurance and it is because they have this minimal health insurance certificate. In most cases, they believe that they are not covered at all because their PRO agents or whoever it is at the company just did not bother to mention that they have this health insurance certificate because they think it does not amount to very much.
Tim Elliot: Just before you go into the different types of coverage, I just wanted to state that a PRO is loosely the guy or the person who runs around doing the visa, the bureaucratic stuff. It means public relations officer.
Ludmila Yamalova: Yes. PRO stands for public relations officer. It is not really an official term, though historically that is how it started. There was a specific term called a PRO. Basically, it applies to someone who works with the government authorities and gets the paperwork processed. Historically there was a specific designation that was especially reserved for U.A.E. nationals in terms of being able to approach government authorities and represent companies in front of government authorities. There was actually a specific card called the PRO card. That is the original form of the PRO officer.
With time, that evolved and became just various employees of the companies who represent the company before government authorities who actually had the ability and skills to represent and they are called that same term. Now it is a little more of a generic term than it was before.
Tim Elliot: It’s interesting actually, because you and I have been here long enough to remember the days when the PROs were seen as, like magicians or wizards. They knew exactly who to go to, what time to go there, and could always get the right piece of paper signed. It’s less like that now because much of the government machinations are now online, but these were respected figures.
Ludmila Yamalova: Absolutely. I’m not sure if this is true or not, but I will perhaps share just for fun an anecdote that was given to me when I moved here by a local business partner and a friend who said that the reason for the PRO system was created the way it was created was because before the U.A.E. became as one united country, each emirate, ultimately the tribes that had their own military, and so when they decided to become one country, you didn’t need to have military personnel in every emirate. They have consolidated the military forces, and there were a lot of these former military employees that were basically left without jobs. But because so many of them ultimately were part of the government system here, and so it naturally made more sense for them to become the representatives on behalf of the companies with the authorities. Back then, as you rightfully said, back in the old days it was a lot more necessary to rely on them because everything was done manually and you had to walk and submit hard copy documents the old fashioned way, and they were really truly necessary. These days, perhaps 90% of what we do these days in terms of paperwork and administrative work is all online, and their role has been reduced to more strategic and more nuanced issues and less these mundane visa renewals and health insurance renewals and such.
Tim Elliot: Okay. We are live on TikTok for the first time on this podcast about medical insurance. Here’s the question. My partner is pregnant. She will deliver next month. We are not married. Will the insurance provided by her company cover her delivery?
Ludmila Yamalova: This is a great question. The short answer is that it should. I will tell you, we have had a number of questions like this recently with a baby coming up, but we don’t have insurance or the marriage certificate issued yet. Will the delivery by covered? Will the mother by covered? Will the baby be covered? Remember, these are all three different stages, the mother’s own care, then predelivery and during delivery, and then the mother herself, if she has any kind of complications related to birth, whether that will be covered or not, and then there is the baby, the baby’s birth and the baby’s further medical treatment, if need be. These questions come up quite regularly. The short answer is yes. Health insurance should cover all of these parties and circumstances.
It is interesting because we have actually reached out, and I’ll tell you why first perhaps logically, and then I will give a bit of a legal justification. Logically, when the mother gets pregnant, most insurance policies here cover maternity. Legally, I have never actually seen as a condition of maternity coverage to being legally married. I have never seen that. Now we know these questions didn’t really come up in the past as much because having a baby out of wedlock or a pregnancy without a marriage certificate were previously illegal. They are not illegal anymore. It has become a lot easier to not only have these kinds of relationships here but also to deliver children here without necessarily a marriage certificate, not just because the laws have changed, but also the society and institutions have changed and it has become a lot more acceptable. Yet, because of that, these discussions are coming up a lot more. I am being told by my employer or by the company that the health insurance does not cover that. I don’t know where that comes from, to be honest with you, because legally, I have never seen a single health insurance policy that has a specific condition that states you can only benefit from maternity coverage if you are legally married. I have never seen one.
Furthermore, now on the back of the multitude of questions we have received recently, we have gone back and researched the health insurance laws themselves and also talked to various health insurance brokers and the contacts that we know and asked that very question. We have not once seen a source that even remotely suggests that being legally married is somehow a condition. That is basically the overall premise. Therefore, if your health insurance includes maternity coverage, then by default that will cover your predelivery visits to the doctor, you delivery itself, any issues related to the mother, and also by default, all health insurance plans that cover maternity cover the baby for the first three months. That makes sense. The baby does not have a legal identity yet to qualify for their own visa until they have been born, discharged from the hospital, and had their birth notification, birth certificate, passport, and residence visa. You cannot apply for health insurance here for a resident that is not a resident. For a baby to even apply for health insurance, you do need to go through that process of the birth notification which is issued by the hospital and then on the back of the birth notification, you’ll apply for the birth certificate.
Tim Elliot: And it will take some time.
Ludmila Yamalova: Well, these days it’s taking a lot less time, but in the past, yes, in the past, for sure. But even today, there could be some complication, and there are a lot of complications where the baby or mother does not come out of the hospital for a month, or ever if they do, it’s the last thing on their minds right now is to apply for this paperwork. Then you get the birth certificate, and then you apply to your embassy for the passport. Depending on the embassy, it could take a few weeks, and then once you have the baby’s passport, only then you can apply for them as a resident for a residency visa as your dependent on the back of your sponsorship. That’s a process, and only then you can apply for health insurance.
I have not seen anything to the contrary. There may be some exceptions, but I have not seen any maternity coverage that excludes the baby because that would be nonsensical, and therefore all maternity coverage, usually by default, includes the baby’s treatment for at least three months. It includes any kind of emergency related to the baby and also regular treatment such as vaccines and such for the first three months. That is a very longwinded answer to the question. It should not be the case, but nevertheless we are hearing that a lot of people are being told that, but legally speaking and contract wise we have never seen anything to substantiate that theory, but my recommendation to anyone that finds themselves in that situation is to simply get copies of all of the insurance policies and read carefully to see if there is any kind of exception like that. If you don’t find an exception, that means it does not exist. I predict there won’t be such a clause in the agreement and therefore the mother and the baby will be qualified for health insurance coverage.
Tim Elliot: Okay. Mother and child for three months. Legally married or not, it doesn’t make any difference. Hello Ma’am. My company said they will be deducting the amount for the health insurance from my salary. Can they do that?
Ludmila Yamalova: Well, no. By default, no. That goes back to your previous question, which I have not answered yet, and that is in terms of the penalties, because there is a specific penalty for that. But let’s say I offer employees coverage to the tune of 5,000 dirhams a year, and that is all I’m willing to pay or I am able to pay. But you, as an employee, you want better coverage. You want a 10,000-dirham policy. Your policy would cost 10,000 dirhams. I am not required to provide you with the health insurance of your choosing. I am only required to provide you with a basic plan. But I am providing you with a lot more than just a basic plan, and I pay 5,000 dirhams on your behalf. But you want a 10,000-dirham policy. We can agree that I provide that to you. I can either offer it to you as additional compensation or I can offer to pay for it and deduct the margin, the 5,000-dirham difference in the 5,000 I pay and the 5,000 that you ask me to pay extra for you.
Tim Elliot: That would need to be in an employment contract in some form, wouldn’t it?
Ludmila Yamalova: Sure. It can be a separate undertaking. You and I can sit down and agree that there is an additional 5,000 that you have asked me to pay for you. It is ultimately like a loan that I am paying to you in advance and therefore I can deduct that from your salary. By the way, under the new employment law, any kind of deductions from salaries and from end-of-service benefits, for example, are very strictly regulated. Even previously, there were not supposed to be so loosely goosey, as many companies may have turned out to be, but now, as per the new law, it is even more clear there are very few deductions that can be made and there are specific requirements as to how they must be done, and as you rightfully said, one of the requirements is a very specific undertaking or an agreement on how I am going to be deducted it, and I also cannot deduct all of it right away. There are specific steps on how much I can deduct from your monthly salary.
Tim Elliot: Lots of questions to ask you, Ludmila. If the PRO of the company did not cancel health insurance of a worker, is there a way to solve it? They did not issue my working visa for two years and no emirates ID either. I am not even aware if I have any insurance, which goes back to your earlier point of it not being communicated. Now that they have cancelled me, the new company applied for a visa and it shows that I have huge insurance fines. This person is asking.
Ludmila Yamalova: Interesting, the insurance fines, let’s go back to your previous question about health insurance fines. There are so many different types of fines that can apply, and this is why we said earlier this topic is important because a lot of people don’t know. The law is there but they may not be aware of the obligation and the consequences if they don’t follow the obligations.
The fines depend on which emirate you are in and where you are working, so there are a lot of nuances. But at a high level, the penalties, for example, in Dubai for violating the Dubai health insurance laws range from 500 dirhams to 150,000 dirhams, depending on the circumstances. For example, for employers or companies who fail to provide health insurance to their employees, there is a fine of 1,000 dirhams per employee. As a company, if I don’t give you the insurance, to all those who are listening, if your company is telling you that you don’t have health insurance, or you think you don’t have it for some reason, then there is a fine of 1,000 dirhams per employee.
By the way, it is interesting, the law says a fine of 1,000 dirhams per person for employers or sponsors who do not provide or make accessible health insurance to their employees or dependents.
Tim Elliot: That’s interesting.
Ludmila Yamalova: Make accessible means basically that ignorance of the policy actually is also a breach of the law. If the company is not communicating with you, theoretically or technically speaking under the law, that is also a violation and, therefore, making the company subject to the fine.
Tim Elliot: So, if you didn’t communicate it or hand over the physical health card or tell somebody how to use the app where health card resides, because most of it is online here now, the sponsor company is liable.
Ludmila Yamalova: Indeed. Exactly. Then, another fine, which is interesting and directly related to the listener’s question, there is a fine of 10,000 dirhams per person for employers who require their employees or dependents to cover the cost or part of the cost of their health insurance. This is in addition to returning the cost to the employee or the dependent. In other words, let’s say in our listener’s case where your employer is deducting, you may want to bring this to their attention. This is assuming you are based in Dubai, but Abu Dhabi might have a similar provision. The Dubai Executive Council Decision 7 of 2016 sets out fines and penalties in connection with health insurance claims. This is basically a provision in that specific law that sets out a fine for all companies that require the employees to compensate them for health insurance, they will be fined 10,000 dirhams. That is a fine on the company, and that’s in addition obviously to reimbursing the employee for the health insurance coverage.
Let’s say, going back to you and me, if you were my employee, and your health insurance cost you 12,000 dirhams a year, and I have been deducting 1,000 dirhams every month, and now six months into it, you find out that you can report me. As a company, legally speaking, I should be subject to the 10,000-dirham fine for the violation, and I will have to return to you the 6,000 dirhams that you have reimbursed me for the health insurance. Technically speaking, the penalties are fairly serious.
Tim Elliot: I’d report you.
Ludmila Yamalova: (Laughing). I’m sure you would.
Tim Elliot: Let me tell you. Let me ask you two more questions. The first one is this. I was diagnosed with cancer recently, somebody writes in. You have positive thoughts from us on this. I’ve been through that, so positivity coming towards you. My insurance is expiring at the end of the month. I haven’t started my treatment yet. It looks like my employer doesn’t want to renew my insurance because he doesn’t want to pay a higher premium for me. Is it legal for employers not to renew employees’ insurance?
Ludmila Yamalova: To renew as long as the employee remains employed and sponsored by the company, the obligation to have the health insurance and to continue to renew it remains. However, the premiums, it is an interesting question, because it that this point in time I am not sure necessarily if the premiums would go up, but let’s say if they are going up and going up substantially, in this particular case there could be an agreement between the company and the employee about the additional premiums. Because as I mentioned earlier, there is a requirement of providing health insurance to the employee, but there isn’t a requirement of providing a certain kind of coverages. The basic coverage must be provided, but anything above that, or whatever is contractually agreed on, it is basically up to the parties to decide.
In this case, let’s say, depending on how your contract is drafted, if the contract says the company provides you with health insurance, period, and now as part of the renewal the premiums go up and the company cannot reduce those premiums, then by default, the requirement to renew, even if it is at a higher premiums, may still remain.
However, if there is a limit in the agreement itself that says I will provide you with health insurance and this is way above just the basic health insurance coverage, let’s say it is 12,000 dirhams a year, but anything above that, I am not responsible for. If the agreement is drafted that way, then in this case it may be that the company can still renew the insurance and will pay the 12,000 dirhams, but the margin, or the difference between that amount and the higher amount would be your responsibility if you wanted to pay that extra.
Tim Elliot: Final question. My family are with me and on my sponsorship. Does my employer have to provide medical insurance for them also?
Ludmila Yamalova: A great question. No. The answer is no. The general rule is that the requirement of health insurance is on the sponsor. If it’s your family, your obligation as a sponsor is to provide them health insurance. Some companies offer this as a benefit to their employees, but it’s more contractual and not mandated by law. So, in this case, it’s not the obligation of the company at all. It is your own obligation unless you have a specific provision in your agreement that provides otherwise.
Tim Elliot: Alright. Thank you for the questions. I think that pretty much wraps it up, Ludmila.
Ludmila Yamalova: No. One more point about essential benefits. This is for all of those who have just basic health insurance coverage. A lot of people think, oh, I don’t have any insurance. As I said earlier, even if you a health certificate, it is a form of health insurance coverage, and that health insurance coverage, by the way, under the Dubai law is called the essential benefits plan. It actually has a specific name. To be even more specific, the law has a definition of basic coverage. Basic coverage is the minimum health benefits to be provided to the resident in accordance with the resolution issued under the law, and this is called the essential benefits plan. Under the essential benefits plan, it specifies the bare minimum benefits and coverage which every health insurance plan in Dubai must include. This is not subject to debate. Under the essential benefits plan, for example, it automatically applies to all residents in Dubai whose salaries are 4,000 dirhams or less. It automatically applies. In terms of the coverage, the annual aggregate claim limit for the essential benefits plan is 150,000 dirhams per year. In other words, it covers claims up to 150,000 dirhams a year.
It covers basic tests, diagnosis, and treatment, within Dubai, and this is important. It covers all kinds of basic tests, diagnosis, and treatments within Dubai, and possibly other emirates, depending on the insurance, as well as emergency medical treatments in all emirates. In other words, if you are a resident in Dubai and sponsored by the company, then you will have this essential coverage, an essential benefits plan, and therefore, you will have coverage, but this coverage has a more limited set of providers and has limited types of coverage. You cannot go to any hospital. There are specific hospitals that are included, but there are minimal benefits and certainly emergencies are covered under the law.
Tim Elliot: That’s another episode of Lawgical, health insurance here in the U.A.E., an overview, a catchup if you like. Essentially, it’s the law and you need it. It is most likely in place, particularly if you are employed, working, and have a visa here in Dubai, or in Abu Dhabi as well. As always, thank you for listening. Thank you to our legal expert, as ever, the Managing Partner here at Yamalova & Plewka , Ludmila Yamalova. Thank you.
Ludmila Yamalova: Thank you, Tim.
Tim Elliot: Find us at LYLAW on social media, Facebook, Instagram, TikTok, for the first time today, live, LinkedIn, and you can find our huge ever-growing podcast library at LYLawyers.com as well. If you’d like a legal question answered in a future Lawgical episode or you want to talk to a qualified U.A.E. experienced legal professional, click Contact at LYLawyers.com.
