Transforming Healthcare in the UAE: What the New 2025 Insurance Package Means for Workers and Employers
Transport & Insurance Focus
As of January 2025, the UAE has introduced significant reforms to its health insurance framework, aimed at ensuring more inclusive and accessible healthcare for all residents.
Law Update: Issue 376 – Transport & Insurance
Anand SinghSenior Counsel, Transport & Insurance
Veena ShankarParalegal, Transport & Insurance
As of January 2025, the UAE has introduced significant reforms to its health insurance framework, aimed at ensuring more inclusive and accessible healthcare for all residents. These changes specifically target the private sector and domestic workers in the Northern Emirates, mandating broader coverage through a new, affordable Basic Health Insurance Package.
This regulatory shift represents a major milestone in the country’s ongoing efforts to enhance healthcare accessibility, regardless of employment status or income level. For employers, insurers, and healthcare providers, the implications are wide-ranging and transformative. So, what exactly do these changes entail? How will they affect businesses and workers on the ground? And what should stakeholders be doing now to stay compliant? Let’s take a closer look.
The UAE’s healthcare insurance regulations aim to provide comprehensive healthcare coverage while balancing the interests of insurers, employers, and healthcare providers.
In Dubai and Abu Dhabi, mandatory health insurance laws (Law No. 11 of 2013 in Dubai and Law No. 23 of 2005 in Abu Dhabi) require employers to provide health coverage for all residents, including expatriates. Starting in January 2025, the Northern Emirates will also implement mandatory health insurance for private sector employees and domestic workers, further bridging the coverage gap. The Ministry of Human Resources and Emiratisation (MOHRE) will oversee this expansion, focusing on affordability, with the Basic Health Insurance Package priced at AED 320 annually. This initiative marks a significant step towards a unified healthcare system across the UAE.
The introduction of the Basic Health Insurance Package in 2025 marks a significant step towards ensuring affordable healthcare access for all workers in the UAE, promoting equity and improving the healthcare system's efficiency.
The launch of the Basic Health Insurance Package in 2025 will mark a transformative shift in the UAE’s healthcare landscape. For the first time, private sector employees and domestic workers—many of whom previously lacked affordable healthcare coverage—will be entitled to essential medical services. This plan, priced at AED 320 annually, ensures affordable access to basic healthcare services, addressing the needs of low-income workers. The introduction of this coverage is also aligned with the UAE's digital health strategy, integrating with platforms like Riayati and the National Unified Medical Record (NUMR). This digital integration will enable better coordination of care, improve data management, and facilitate resource optimization, contributing to a more efficient, inclusive, and data-driven healthcare system.
Pharmacies are expected to see a rise in demand for both prescription and over-the-counter medications as more workers gain health insurance. As a result, pharmacies will need to streamline operations and adapt to working with insurance providers. This includes aligning billing systems with insurers, ensuring accurate claims processing, and integrating digital prescriptions. The shift towards electronic health records (EHR) and automated claims management will enhance the efficiency of pharmacies and reduce administrative burdens, though initial adjustments may pose challenges. Pharmacies that adapt quickly to these changes will be better positioned to capitalize on the increasing demand for healthcare services.
In the UAE, the cost of health insurance is largely borne by employers, a model that sets it apart from many other countries. In many Western countries, employees typically contribute to their health insurance premiums, either through salary deductions or co-pays. By contrast, in the UAE, employers are responsible for covering the insurance costs for their employees, which ensures that workers—especially low-income workers—are not financially burdened by the cost of healthcare. This model is also common in other GCC countries, such as Saudi Arabia and Kuwait, where expatriates are similarly covered by employer-funded insurance. In comparison, countries like the UK rely on public healthcare, while the U.S. has a more mixed system, where both employers and individuals contribute to insurance premiums.
The UAE government has established robust mechanisms to enforce healthcare insurance regulations through regulatory bodies like the Dubai Health Authority (DHA) and the Department of Health (DOH) in Abu Dhabi. These authorities oversee the registration and regulation of health insurance providers to ensure compliance with established standards. The UAE government is expanding its oversight to the Northern Emirates, with the MOHRE managing the introduction of the Basic Health Insurance Package. The Worker Health Insurance platform will be central to ensuring employees in all sectors have access to healthcare services. These measures help ensure the health insurance system operates smoothly and that all employees, regardless of location, receive affordable and adequate healthcare coverage.
Positive Outcomes:
Financial Protection: The Basic Health Insurance Package will provide much-needed financial security to low-income workers who previously had limited access to affordable healthcare. This initiative promotes early intervention and preventive care, which could help reduce long-term healthcare costs.
Improved Data Integration: By integrating health insurance with digital health platforms such as Riayati and NUMR, the UAE will be able to improve healthcare coordination, optimize resource allocation, and ensure more efficient care delivery.
Cost-Effective for Employers: The Basic Health Insurance Package is priced affordably for employers, helping them comply with the new regulations without facing significant financial challenges.
Negative Outcomes:
Exclusion of Maternity Coverage: The Basic Health Insurance Package does not cover maternity services. Female workers who require maternity care will need to seek additional insurance coverage, which could create financial strain, especially for those who cannot afford it.
Financial Strain on Employers: Although the insurance package is affordable, some small businesses may find the cost of providing health insurance for their employees challenging, particularly those with lower profit margins.
The UAE’s health insurance regulations stand out due to their employer-funded model. This is different from countries like the U.S. and Germany, where employees typically share the cost of health insurance. By placing the responsibility for coverage entirely on employers, the UAE ensures that employees—especially those in low-income sectors—do not face financial barriers to accessing healthcare. This model is particularly beneficial for low-wage workers, who can now access medical care without worrying about high premiums or out-of-pocket expenses. Compared to countries with mixed public-private systems, the UAE's approach is more employee-friendly and ensures broader access to healthcare.
Rising insurance costs in the UAE could have significant implications for the healthcare sector. As the number of insured individuals increases, healthcare providers may experience an influx of patients, which could strain existing infrastructure and medical staff. This could lead to longer wait times and potential resource shortages if not addressed properly. On the insurer’s side, higher insurance claims could drive up premiums, creating financial pressure on both consumers and providers. In turn, this may prompt insurers to impose stricter policy limits or increase premiums. To ensure the sustainability of the healthcare system, collaboration among the government, insurers, and healthcare providers will be essential to manage rising medical costs and expand healthcare capacity without compromising quality.
The introduction of mandatory health insurance across the UAE marks a pivotal development in the country’s healthcare landscape. With the extension of coverage to the Northern Emirates and the rollout of the Basic Health Insurance Package for private sector employees and domestic workers in 2025, the UAE continues to move toward a more inclusive and standardised healthcare system.
These reforms aim to enhance access to essential healthcare services, promote efficiency through digital platforms, and alleviate the financial burden on both employers and employees. However, certain challenges remain—notably the exclusion of maternity coverage in some cases, and the potential financial impact on small businesses.
Al Tamimi & Company’s Insurance team is well-equipped to advise clients on the practical implications of the new Regulations. We can support you in conducting impact assessments, ensuring compliance, and developing tailored strategies—particularly in relation to the Basic Health Insurance Package and employer obligations for private sector and domestic workers.
For more information or assistance, please contact Anand Singh or Veena Shankar from our Insurance team.
For further information,please contact Anand Singh andVeena Shankar.
Published in April 2025
