DUBAI // Employers will provide compulsory health insurance for every worker in Dubai under a major scheme approved on Tuesday.

The long-awaited scheme, which also covers employees’ spouses and children for as long as they live in the emirate, will come into effect next year.

It extends cover to domestic staff, and visitors to Dubai in case of an emergency.

“Health insurance is a form of security and it is very important for every individual to know that if he needs access to health care it is easily available,” said Essa Al Maidoor, director general of the Dubai Health Authority.

Valid health insurance will be a prerequisite to obtaining a residency visa.

The plan has been years in the making, originally due to be introduced four years ago, and is loosely based on the Abu Dhabi model.

Mr Al Maidoor said the Health Insurance Law was passed this week by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai.

“We would like to thank His Highness Sheikh Mohammed and we are committed to fulfil his vision and ensure every individual knows that if he needs access to health care, it is easily accessible,” he said.

“The law is fundamental to ensure smooth delivery of basic health insurance to everyone living in the emirate, which roughly means more than 3 million people, including nationals and residents with Dubai visas.”

Mr Al Maidoor said the DHA had studied 12 of the best health insurance systems in the world.

It will take about three years for the population to be fully covered, with about a third now insured. The Government will be responsible for insuring UAE nationals.

Coverage will be rolled out in phases from next year until mid-2016, with all workers requiring at least the essential basic package.

Mr Al Maidoor said the average cost of providing the basic insurance would be about 1.5 per cent of an employee’s salary and employers would have the option to top up the basic package.

The plan to insure visitors to Dubai will be introduced in the later stages.

The law will ensure growing investment in the healthcare sector in Dubai and the UAE, and was the product of “very, very hard work” by those involved, Mr Al Maidoor said.

He said the DHA had wanted to ensure everything was ready before launching the scheme.

“Anything like this has to be done right and properly, without any negative impacts,” Mr Al Maidoor said. “Our role is to guarantee a proper, comprehensive service.”

Abu Dhabi, the only other emirate with mandatory insurance, has 98 per cent of its workers covered. Daman is the main insurer in the emirate.

All Dubai workers will be given insurance cards to replace their DHA cards, said Dr Haider Al Yousuf, director of health funding at the authority.

“For residents, the health insurance law sets forth the employer’s responsibility to secure insurance to cover the employees he sponsors,” Dr Al Yousuf said.

Only registered insurance companies with health insurance permits from the DHA would be able to provide insurance.

“This is to provide everyone with the basic right to health care in a well regulated model,” Dr Al Yousuf said.

“This stems from the Government’s fundamental goal to provide happiness and security to the people of the country.”

He said the law stipulated the roles and responsibilities of all stakeholders.

Failure by employers to provide insurance carries fines of between Dh500 and Dh150,000. Repeated breaches carry a maximum fine of Dh500,000.

Under the DHA’s original plan, employers would pay the Government between Dh500 and Dh800 a year for each employee, who would register with an outpatient clinic for basic healthcare services.

The plan was delayed partly because of the economic downturn. A new proposal, in 2011, cut out the Government, requiring companies to buy private health insurance for their staff.

As in Abu Dhabi, Dubai is operating an online clearing house for every claim.