Expat health cover to cost $1bn

Concerns that the UAE's three tier system could confuse the market.
Expat health cover to cost $1bn
By Safura Rahimi
Mon 07 May 2007 01:32 PM

A new expatriate health insurance law could cost UAE employers up to AED 4 billion ($1 billion), according to leading international law firm Clyde & Co.

The compulsory scheme, similar to the one introduced in Abu Dhabi in January, would cost employers over AED 1.5 billion ($408 million) in Dubai alone, if it comes into effect.

"From a cost perspective, the responsibility appears to rest squarely on the shoulders of the employers - whether it is a big international firm or employers of domestic helpers," said Wayne Jones, a partner at Clyde & Co. in the UAE.

However, he added that "the scheme will provide huge boosts for the health insurance industry, which is a key and growing part of the economy of the UAE."

"The expected introduction of the compulsory health insurance scheme in Dubai and elsewhere in the UAE is a positive development for expatriate employees and their dependents, and provides many opportunities for the insurance industry in general," he added.

Commenting on introducing the scheme across the UAE, Jones advised that there is a risk that introducing three different schemes with different requirements for the industry will lead to confusion and additional demands being placed on the medical insurance market.

"What the industry does not need at this stage in its development is a multiplicity of systems each having a range of different requirements for insurers, employers and policyholders which will just confuse the market, potentially adding additional cost burdens onto the providers and ultimately to employers," he said.

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