Mandatory Medical Insurance

What mandatory medical insurance is

Mandatory medical insurance, also called mandatory health insurance, is the everyday name for an obligation on private sector employers in Saudi Arabia to provide health cover for their workers.

The everyday name is not the name of the instrument. The legal instrument is the Cooperative Health Insurance Law (نظام الضمان الصحي التعاوني), issued by Royal Decree M/10 of 1420H. Anyone who needs to refer to the instrument should call it by that name. The everyday phrase is used as the title of the term, and every rule described below is traced to the text it comes from.

The date 1420H is the date of issue. Whether the 1420H text is the version in force today is not something the sources we reviewed establish, so no statement is made about its current status.

The text of the Cooperative Health Insurance Law and of its Implementing Regulation was not among the sources we reviewed: only the name of the instrument and the number of its decree were recorded. Nothing is therefore stated, in either direction, on these points: any article number of that law or of its regulation; whether Saudi workers and others are treated differently, if they are; the position of small establishments, including any threshold, exemption or phasing by size; any minimum level of cover, premium or benefit limit, and any figure quoted for them; and any link between insurance status and the issue or renewal of a residence permit (iqama). These are not reservations added for caution. They mark the edge of what the sources establish. What commercial guides say on these points is repeated rather than verified, and the same statement repeated in ten places remains one claim, not ten sources. Anyone who needs an answer on one of them should go to the Council of Health Insurance and to the text of Royal Decree M/10 at source.

The regulator behind mandatory medical insurance

The body that regulates cooperative health insurance is the Council of Health Insurance (مجلس الضمان الصحي). It is not the Ministry of Human Resources and Social Development, and it is not the General Organization for Social Insurance (GOSI). The obligation is not discharged through Qiwa or through Mudad. Instead, the employer contracts with a qualified insurance company.

A mistake arises at exactly this point: putting social insurance and health insurance into a single phrase, which sends the reader looking for health insurance inside a platform where it does not appear. They are two obligations, under two laws, with two regulators and two separate payments. The social insurance obligation is described under social insurance, and the payments it involves under GOSI contributions.

Mandatory medical insurance in Article 144 of the Labor Law

Article 144 of the Saudi Labor Law (نظام العمل) is the provision that connects the employment relationship to the cooperative health insurance system. Its wording is set out below in Arabic, with our English rendering beneath it:

«على صاحب العمل أن يوفر لعماله العناية الصحية الوقائية والعلاجية طبقًا للمستويات التي يقررها الوزير، مع مراعاة ما يوفره نظام الضمان الصحي التعاوني»

Our rendering, not an official translation: the employer must provide its workers with preventive and curative health care to the standards the Minister determines, having regard to what the Cooperative Health Insurance Law provides.

The structure of the sentence is what tells you how to understand it:

1. The duty in the Labor Law rests on the employer, and its object is preventive and curative health care (العناية الصحية الوقائية والعلاجية), not an insurance policy.
2. Its standards are set by the Minister of Human Resources and Social Development, not by the Council of Health Insurance. We did not locate the ministerial decision that sets those standards, so the standards are not described and nothing is attributed to them.
3. The Cooperative Health Insurance Law enters through the words «مع مراعاة», “having regard to”. Article 144 of the Labor Law does not say that the employer must buy an insurance policy, and it does not bring the provisions of Royal Decree M/10 into the Labor Law. A sentence saying that Article 144 of the Labor Law obliges the employer to provide health insurance attributes to the article something it does not say, and moves into it the content of a different law. Article 144 of the Labor Law requires the employer to provide care, and says nothing about premiums: who bears the cost of cover, and whether any part of it may be deducted from the worker’s wage, are not settled in the sources we reviewed.

Mandatory medical insurance as a contract term

Article 18 of the Implementing Regulation (اللائحة التنفيذية) of the Labor Law adopts the unified model employment contracts attached to it in Annex 5, and requires the employer to document its workers’ contracts electronically through the platform approved by the Ministry. Electronic documentation is covered in our guide to employment contract attestation. Within Annex 5, the health insurance clause appears as a row marked mandatory, placed just before the row on registration with social insurance, which is marked mandatory as well:

• The permanent employment contract. The clause is present. It binds the employer to provide the worker with preventive and curative health care, having regard to what the Cooperative Health Insurance Law provides.
• The casual or temporary employment contract. The clause is present and marked mandatory. In this model it binds the employer to provide the worker with medical care (الرعاية الطبية) through health insurance, in accordance with the provisions of the Cooperative Health Insurance Law.
• The seasonal employment contract. The clause is present and marked mandatory, in the same wording. Beside it sits a separate row, mandatory in the Hajj season, that requires medical insurance for all seasonal workers for as long as they are present.
• The part time employment contract. The clause is absent. That model carries the mandatory row on registration with social insurance and no health clause at all.

The missing clause in the part time model is an observation about the model contract, not a legal conclusion. Its consequence is that the statement “every approved model contract includes a health insurance clause” would be inaccurate. It should not be taken as an exemption of part time workers from the Cooperative Health Insurance Law either, because the scope of that law is not set out in the sources we reviewed. The observation is reported as it stands, and no rule is drawn from it.

A related provision treats the obligation as something that can be checked. Article 64 of Annex 4 to the Implementing Regulation, which sets the rules for practising recruitment and labour services activity, allows licensees to be required to engage an external auditor to assess compliance with the Labor Law and its Implementing Regulation, the Cooperative Health Insurance Law and the instruments connected to them. So the obligation can be audited, and that is all Article 64 of Annex 4 to the Implementing Regulation establishes on the point. It says nothing about what the obligation contains.

Medical duties of the employer that sit apart from mandatory medical insurance

Two neighbouring provisions of the Labor Law create medical duties in their own right. They are separate obligations and are not folded into health insurance:

• Article 143 of the Labor Law. Every employer must engage one or more doctors to give a comprehensive examination, at least once a year, to its workers who are exposed to one of the occupational diseases listed in the schedules of the Social Insurance Law (نظام التأمينات الاجتماعية), and must record the result in its registers and in those workers’ files.
• Paragraph 3 of Article 146 of the Labor Law. For work in places remote from urban areas, the employer must provide at its own expense the medical arrangements (الترتيبات الطبية) needed to preserve the workers’ health and to give their families comprehensive treatment. For this purpose, Article 146 of the Labor Law defines the family as the spouse, the children, and the mother and father who live with the worker.

The definition of the family in Article 146 of the Labor Law serves Article 146 alone. It was written for medical arrangements at remote sites, and it does not define who a health insurance policy covers. Carrying it over to health insurance would turn a provision of the Labor Law into a rule of the Cooperative Health Insurance Law. Who a policy covers, among workers and among members of their families, is a question for that law, whose text we did not have. The other duties that Article 146 of the Labor Law places on employers at remote sites are covered in our guide to worker housing, meals and transport at remote sites.

In the consolidated text published by the Ministry, Articles 143, 144 and 146 of the Labor Law carry no amendment footnote, and Article 144 of the Labor Law does not appear in the Ministry’s summary of the amendments made by Royal Decree M/44 of 1446H. Both statements are observations about those two documents.

How mandatory medical insurance differs from social insurance

The two obligations are named side by side in the model contracts precisely because they are two. Social insurance is administered by GOSI, under the social insurance law. Mandatory medical insurance answers to the Council of Health Insurance, and it is arranged with an insurance company. Different regulator, different law, different payment.

A list of employer obligations that puts them under one heading sends the reader to look for both in the same place, and health insurance is not found where social insurance is filed. Where health insurance appears beside the platforms of the Ministry, it needs a sentence of its own that names its regulator.

This is an explanation of the concept and of the statutory provisions cited, not legal advice.