How UAE-Based SMEs Should Choose Their Employee Health Insurance Policy

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Small and medium sized enterprises (SMEs) play a huge role in the UAE economy, accounting for an estimated 95% of GDP and 90% of the workforce. Translate that across the Gulf region and it makes for a lot of SME owners and directors agonizing over which health insurance policy to choose for their workers. Trying to maximize quality care and benefits, at a cost the business can afford, is a minefield even for professionals. Health insurance policies can start at around AED 500 per person per year and go up from there. It's tempting to go for the cheapest option, but that isn't always the best long-term strategy. It's important to take time to choose the right policy, including the benefits that are most important to your employees, while keeping costs realistic.

Here is a quick overview of factors to take into account if you're in the process of choosing or changing your provider.

Consider your industry
Risks posed by the work environment don't affect all workers equally, and there may be specific compliance and regulatory requirements to take into account. For example, workers involved in manual labour on construction sites or oil rigs face additional risks that don't apply so much to those sitting at a computer; especially the risk of serious accidents. You need to make sure your policy covers this adequately.


Then there is chronic disease. A 2011 US report showed that up to one third of cardiovascular disease cases resulted from environmental factors, such as exposure to chemicals, including carbon monoxide, carbon, solvents and lead, and from organizational factors, such as long working hours, shift work and psychological stress. Office employees are just as vulnerable to chronic disease as factory workers, especially in the Middle East. According to the World Health Organization (WHO), Kuwait, Bahrain, Saudi Arabia and the UAE feature on the list of top ten countries worldwide in terms of obesity. With obesity come higher rates of diabetes, high blood pressure, strokes and bad backs, often in combination, which adds to the cost. A study of Medicare patients in the US found that workers with one chronic condition saw four different doctors a year, but those with five conditions saw 14. The costs can quickly add up, so you really need to research what providers offer. For example, some may include a wellness program, designed to help workers proactively improve their lifestyle.

Consider your employees
You may need to offer different plans to different people. The type of job they do is a starting point, but nationality is also a factor. For example, an employee from Germany will already rely on their home country's health service, so may not expect the same in-depth coverage as someone else. But a worker from Kenya may not have any health insurance in their home country, so may need more comprehensive coverage than someone from Europe. There could even be different rules for expats of the same nationality. In 2015 the UK National Health Service changed its rules on charges for expats living outside Europe who return to use secondary care services. So, UK employees who are officially resident in the Emirates now have to pay 150% of the cost of non-UAE hospital treatment, if not covered by international health insurance.

Consider facilities
In general, providers stipulate a specific network of hospital coverage, withholding reimbursement for treatment outside this. If the facilities included are not close to the office or where your workers live, it's probably not the most useful plan. Talk to your employees to find out if they already have a preferred doctor. They may have been seeing a particular specialist for years and, understandably, might prefer to keep it that way. An insurance advisor is particularly useful when navigating policy complexities like this. And they can help you delve deeper. Does the provider offer good support when it comes to making a claim? Check up on their reputation before you sign. Does the policy cover outpatient prescription drugs? A quick search on a policy comparison site will tell you many do not. Drugs are costly, especially for chronic conditions, so insurers are wary of providing coverage outright, though it may be possible to negotiate coverage in certain cases. You may even want to consider a co-pay on outpatient drugs and dressings to control premium increase.

Related: The How-To: Licensing Your Business In The UAE

Consider add-ons
Remember that all policies have specific add-ons: dental, hearing, vision, and disability care are prime examples. One employee survey found that 70% of UAE workers are interested in supplemental health, life and disability cover, even if they have to pay some of the premium. The American Optometric Association points out that 14% of visits to eye specialists result from computer use, and that uncorrected problems can adversely affect both worker performance and comfort. So, if your workers spend all day at a computer, eye care could be an attractive option.

Consider the future
Think about your company's future plans. Do you envisage making significant changes in the next few years, such as expanding into different countries? This is important because a policy may need to be portable if workers are moving to a new country, or if new employees join. You might decide after a couple of years that your current provider isn't offering a good enough service. If you switch providers, your employees won't want to lose the benefits already accumulated, especially if they are facing a waiting period for pre-existing conditions. Typically, policies are only portable to ones of similar risk, and porting a policy may not be possible if the preferred new policy is too different to the old one. You will also need to consider the portability of the policy if your employees are expats and would want to continue their cover once they leave the UAE. Different insurance companies also have their own approach when dealing with new medical conditions that crop up during a policy year. Some place exclusions, some a cap and others specific restrictions on these conditions. Knowledge of this approach is good to have as a factor in order to have clarity and possibly avoid future disputes.

Consider policy attractiveness
A health policy can be a powerful retention or hiring tool. In an article earlier this year my colleague Tanvir Haque highlighted how a good health insurance package sends a strong message to staff that the company is a great place to work. Numerous employment surveys seem to agree. Take the Hays 2016 Salary and Employment report, which revealed that, alongside salary, benefits are one of the main reasons why employees choose who they work for, regardless of industry.

Consider cost
For most businesses, cost is a prime consideration. Your ultimate decision is defined by what you can afford. If your main aim is a low monthly premium, consider a deductible plan. In the UAE, this is common for outpatient costs, where the policyholder pays a fixed amount per visit, say AED 50. Another option is co-payment, where the policyholder pays a percentage of the cost; say 20% for every outpatient visit. Also acknowledge that your premiums will rise year on year: the average premium increase in the UAE over the last five years has been 10%, and this could affect the manageability of your policy. There can be different reasons for premium increases, beyond inflation. Some insurers drop prices to attract your business in the first place. Then there is resource overuse. Patients often make unnecessary trips to the doctor when pharmacist advice would have sufficed. Some doctors choose to prescribe branded drugs over generics, or to opt for unnecessary testing, the "try everything' approach.

As an employer, you have some control over this – educating employees about how their actions can raise premiums is a start – but you also need to work with the insurance company or your advisor to address facility overspend. Research those hospitals that are actively tackling cost. Government hospitals already do this – a 2016 study in the Saudi Pharmaceutical Journal found that four government hospitals in the UAE prescribed 100% of drugs as generics – there's no reason why private hospitals can't do it too. It is always good to know the increases a plan or provider has been applying in the past and their approach to increases for the future. This will help you get a feel of how much to budget for and work out the affordability factor in the long term. The current price to benefit ratio is important but this is an important point to consider when thinking about the future.

Do your research and get advice
Overall the message is clear. The cheapest policies are likely to benefit no one but the insurance company. Really research your needs, and use the knowledge of insurance advisors. Finding the right policy could take time, but that time will prove well spent if it results in quality coverage at a quality price – ultimately attracting quality workers.

Related: Dispute Resolution For UAE SMEs: Get It Right The First Time