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Employers cutting health insurance in Dubai
Posted on Jun 14, 2016 by Rob McBroom
Companies are cutting back on insurance coverage in Dubai. While they legally can't remove it completely, many are finding that their employer-sponsored coverage simply isn't enough. Read this article to learn your options and how UMI can help.
The end of June is fast approaching as individuals and small companies race to secure appropriate insurance for themselves, their dependants, and even their employees before the DHA's June 30th deadline. Larger companies, however, have already been under the DHA's new mandatory health insurance scheme, some for almost two years now.
While this, along with other government sponsored initiatives, is more than likely to have a positive impact on the health and wellness of those living and working in Dubai, there have been a number of reports that this initiative is putting a strain on companies, who have reacted by tweaking their company-sponsored health insurance schemes, leaving some with less than ideal coverage. In this article UAE Medical Insurance takes a look at the current state of company-sponsored health insurance in Dubai and what you can do to ensure you have the best health insurance coverage available.
The current state of employer-sponsored health benefits
Historically, almost all expats who came to work in Dubai have been offered comprehensive health insurance coverage with a multitude of benefits for themselves and many times also their family. These plans have usually covered almost all medical procedures including extras like dental and optical, and have served as great tools that can attract quality talent to the region.
According to regional news sources, however, it appears that the provision of in-depth medical coverage is starting to be cut back. For example, the National recently published an article that covered what is happening regionally and in Dubai. According to the article, "Following mandatory health insurance legislation in Dubai and Abu Dhabi, there was an increase in health benefits offered to many employees. But some companies who have been offering health benefits in excess of the regulatory requirement are reviewing their cover, and shifting to lower-cost providers or packages."
Pacific Prime, UMI's international partner, further backs this up in a recent report on trends in the health insurance industry which covers what HR teams and business managers are doing to more effectively manage their insurance offerings. Worldwide, many businesses are increasingly implementing measures that tweak the benefits offered to employees in an effort to remain profitable while still offering required health coverage.
Why are businesses in Dubai cutting benefits?
UMI believes there are a couple of main elements driving this change here in Dubai. Firstly, it's the current business and economic climate. The low price of oil combined with general economic uncertainty around the world has led to many companies reviewing their budgets and operating on narrower margins. This has subsequently led to many cutting costs where possible and, often times, one of the first cuts introduced is to non-essential employee benefits.
The second stronger driver is the increasing cost of health care in the region. It is no secret that the cost of healthcare in Dubai has been steadily increasing along with demand. This has a direct impact on the cost of insurance. In a report published by our partner Pacific Prime last year, it was found that International Private Medical Insurance plan premiums increased by an average of 9.5% in 2015, with the inflation figure predicted to be even higher in 2016.
Because of the increased cost of cover, companies are reacting by implementing cost-effective measures. This benefits the company, but there is a drawback for employees, as their overall level of coverage may go down. This could, in turn leave them uncovered for certain conditions, leaving them to pay out of pocket.
What can I do to ensure I have the best health insurance coverage?
While it may seem like the cutting of benefits is a negative thing, it should be said here that all residents in Dubai will have health insurance coverage,as it is legally mandated that companies provide their employees with cover. It just may not be as comprehensive as some need it to be.
If you feel that your existing health insurance plan is not adequate, one of the best solutions is to look for a top-up plan. These plans are designed to provide enhanced coverage that may be well beyond that of your company plan. To learn more about these plans, talk with the experts at UAE Medical Insurance. We will work with you to uncover gaps in your corporate coverage, and provide recommendations on plans that meet your coverage needs.