Healthcare

Mandatory health insurance coverage for private sector employees and domestic workers in the UAE is set to expand nationwide in 2025, covering all seven emirates. This development is poised to bring about a transformative shift within the UAE's labor market, healthcare sector, and insurance industry, according to Mustafa Oliyath Vazayil, Managing Director of Gargash Insurance.

Currently implemented in Abu Dhabi and Dubai, the health insurance scheme will soon require employers across Sharjah, Ajman, Fujairah, Ras Al Khaimah, and Umm Al Quwain to provide coverage for their employees. This nationwide expansion is expected to significantly enhance worker benefits and create a seismic shift within the UAE's insurance market.

“It’s a fundamental necessity for every individual, and ultimately, the employee will be the primary beneficiary of this coverage,” Vazayil explains.

The inclusion of the northern emirates will drastically reshape the insurance market. “With the northern emirates now included, health insurance will become the largest segment in the portfolio of most insurers and brokers,” Vazayil predicts, marking a major transformation in the industry.

From Compliance to Comprehensive Coverage
Vazayil discussed the evolution of health insurance regulations, explaining that the initial requirements under the UAE Labour Law were often treated as a mere formality. "Most employers and clients saw it as just a ritual, and insurers would simply provide a certificate which effectively had no cover, just to comply," he said. However, authorities took steps to address this issue, leading to the introduction of mandatory basic health insurance covers in Abu Dhabi and Dubai.

“Over time, the authorities have strengthened the coverage and the mechanisms to ensure compliance, so now Dubai and Abu Dhabi have what I would consider decent medical insurance mandates for employers,” Vazayil added.

Strengthening the Labour Market and Healthcare Sector
The nationwide expansion of the health insurance mandate, which has been in the works for several years, is expected to benefit the labor market and healthcare sector. Vazayil estimates that around 30-40 percent of employers in the northern emirates already offer health insurance to their employees. With the new nationwide mandate, he predicts greater job stability as employees will be more inclined to remain in their positions due to the added benefits.

The healthcare sector is also expected to see increased demand as a result. “I think the healthcare sector has the capacity to cope. As numbers increase, it won’t be a big challenge for them to enhance their infrastructure or human resources to meet the demand,” Vazayil said confidently.

Addressing Potential Concerns
While the details of the expanded scheme are still to be finalized, it is expected that employees will have access to more affordable insurance options through group plans provided by their employers. Group insurance plans typically offer more cost-effective solutions than individual plans.

However, potential challenges remain, including inflation and the rising cost of healthcare as employees age and require more medical treatment. “As people age, more medical conditions emerge, and more treatment is required,” Vazayil noted.

To manage these concerns, he emphasized the need for strong regulatory oversight. "Cost control is essential to make medical insurance viable in the medium to long term and is critical for its sustainability as mandated today," he said, advocating for strict protocols to prevent abuse and ensure healthcare providers engage in responsible practices.

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