A particular concern posed by the scale of expatriate populations in Gulf Cooperative Council (GCC) countries is the burden of financing healthcare. Saudi Arabia, as with other GCC countries, has a dominant expatriate worker population as 90% of private sector workers are expatriates [1]. As a percentage of the total labour force, the expatriate¹ percentage share in the Kingdom of Bahrain is 61.9%, Kuwait 84.8%, Oman 64.3%, Qatar 81.6%, UAE 89.8%, and Saudi Arabia 55.8% [2]. The healthcare financing systems in GCC countries are still being developed. At present, financing for most of their public services, including healthcare services, is through revenue from natural resources (i.e. oil or gas) [3]. Saudi Arabia, however, has attempted to reform its private healthcare system and reduce expatriate access to government resources through the provision of the Compulsory Employment-Based Health Insurance (CEBHI). At the same time, other GCC countries have been looking at various options for financing their healthcare services [3], but have yet to identify or implement an approach enabling them to reduce the burden of healthcare expenditure imposed by their expatriate worker populations and are at the stage of trying to learn lessons from one another’s experiences [4–8].

The Organization for Economic Co-operation and Development (OECD) distinguishes public from private insurance by the source of funds [9]. Private health insurance is often characterized as voluntary for-profit commercial coverage in contrast to mandatory, publicly financed and publicly managed insurance. Ultimately, all money comes from household or employer income, but in public insurance programs, this money is channelled through the state via general or social insurance tax, whereas the money is paid directly to the risk pooling entity in private insurance [10, 11]. The CEBHI shares the nature of its health plan with public insurance (mandatory) and shares the source of funds with private health insurance.

The phasing of the CEBHI was carried out according to the size of the firm, as with the implementation of the Korean social health insurance [12]. Health insurance in the form of the CEBHI was introduced in Saudi Arabia in 1999, but the actual implementation began on July 15, 2006, for large companies with more than 6000 employees; in September of the same year companies with more than 500 employees were included. However, the full implementation to all companies regardless of their size started on November 9, 2008. After this date, there are some expatriates who were not insured because the implementation occurred at the time for their resident permit renewal, which was not due for renewal at the time of the study. Moreover, the family members of expatriate employees who worked in a firm with more than 900 employees had to be covered by 10 May 2009. The timing of the study was critical because it fell after the implementation of the CEBHI for all expatriates, regardless of their employer’s size but did not include all the expatriates' family members.

The insurance market in Saudi Arabia was developed in 2003. Before this, because there was opposition from some Islamic scholars, the relationship between healthcare providers and insurance was ungoverned and unsupervised [3]. They contended that in Islam, commercial insurance should not be permitted; but cooperative health insurance and not-for-profit health insurance are permissible. The Saudi Arabia constitution is based on the Holy Quran and Sunnah (Prophet Mohammed’s recorded saying), and the health insurance scheme must be linked to the constitution of the country. The term "cooperative health insurance" has been used for the CEBHI so that the required legislation is passed. However, the characteristics of cooperative health insurance do not equate with the CEBHI because the current practice is for premiums to go back to the insurance company owner as oppose to beneficiaries of the services [15].

The CEBHI scheme was implemented in Saudi Arabia to benefit expatriate workers in the private sector, with the multiple aims of regulating the provision of healthcare for expatriates (while providing financial protection against their healthcare expenses), improving utilisation of the government healthcare budget, by reducing the load on government healthcare providers, and increasing the contribution of private healthcare sector expenditure [16–18]. Indeed, according to Saudi Labour Law, employers must bear the responsibility for paying all necessary medical expenses for their expatriate employees [19].

The CEBHI scheme in Saudi Arabia differs from other forms of employer-sponsored insurance (ESI). In particular, the CEBHI scheme is compulsory, with enforcement including financial fines to be paid by employers who fail to follow the policy [14]. Moreover, expatriate workers in Saudi Arabia are unable to obtain or renew their Iqama (residency permit) without an official document confirming health insurance coverage for the same duration of the Iqama [14]. Also, it is not permitted for a health insurance company to reject any application for cooperative health insurance [18]. In other words, health insurance with the CEBHI is an obligation under Saudi labour law and not an employment fringe benefit. This situation contrasts with a system of voluntary employment insurance, whereby employers control both the eligibility criteria (employment status and hours worked) and who is to be offered health insurance [20]. The financial burden under ESI is largely carried by workers and their dependents, with health insurance coverage, benefits, premiums and co-payments based on an agreement between the employer and the health insurance company [21]. By implication, employees could face an increase in the premium or the co-payment, or see a reduction in the healthcare benefits of the policy. However, under the CEBHI, employers must pay the entire premium for their workers [14]. The CEBHI scheme is such that if employers do not subscribe or fail to pay the premiums of their employees, then the employer would be required to pay the premiums and a limited fine, along with losing the right to employ expatriate workers [18]. In effect, the CEBHI protects employees from the prospect of increasing costs of premiums over time; this is the opposite of the situation in, for example, the private sector in the United States, where employers are shifting the cost to their employees [22].

In summary, because of its mandatory nature and the control and regulation of financial barriers by the government, in theory at least, the CEBHI promises to guarantee access to health insurance for expatriate workers. On the other hand, the insurance sector is not well developed in Saudi Arabia since it was only established in 2003. This factor might reflect some reports which stated that employers pay insurers under the table without the employees having insurance to secure the renewal of employee residency permits [23]. However, there is little evidence on the performance of various forms of private health insurance in developing countries [24], nor is there any literature that evaluates the role of private employment-based health insurance in developing countries [25]. The objective of this paper is to investigate, in a natural ‘quasi-experimental’ setting: the characteristics of uninsured expatriates bases on their personal and workplace characteristics. It is anticipated that by drawing on Saudi Arabia’s experience of implementing the CEBHI throughout the entire country, this study will assist other GCC countries in reforming their systems of healthcare financing.

Using a cross-sectional survey, data were collected from a sample of 4,575 male expatriates. Riyadh City, the capital of Saudi Arabia, was selected as the setting for the study because the Riyadh region contains more than one-third of expatriates and one-fourth of the Saudi population [26]. A multi-stage stratified cluster sampling technique was used for the employee population. The businesses/companies of participants were identified from the Ministry of Labour database and stratified based on business type, company size and number of employees. Based on their size and economic sector, companies were randomly selected from the database. During randomization facilitated through the Statistical Package for the Social Sciences (SPSS) software, companies’ names and any related information were concealed; the only means of identification was the company’s code number, known only to the Manager, Statistics Department at the Ministry of Labour.

Descriptive statistics were used to summarize all variables. Frequencies and percentages were calculated for the categorical variables. Mean and standard deviation values were calculated for quantitative variables. Whether people were insured or not insured was the main dependent variable - a binary variable. The dependent variable was tested using Chi-square and tabulated by access to health insurance. Logistic regression analysis was performed as guided by the conceptual model (Fig. 1). The main independent variables were based on either workplace or personal characteristics, as illustrated in Fig. 1. This analysis was used to determine the main personal and workplace characteristics of those who were not insured. The measure of association in the logistic regression was the odds ratio and its 95% confidence interval. The data collection period was from 22 May to 6 December 2010. A double data entry system was employed to minimize errors. Frequency analysis of all variables in the final data set was undertaken and all outliers were checked by revisiting the survey answers for clarification. For all of the analyses a p-value of less than 0.05 was considered significant.

There are similarities between the study sample and the expatriate population in Saudi Arabia. For example, the average age of the study population and the expatriate male working population in the private sector is not significantly different; the median age of the study population was 36 years old, similar to the Ministry of Labour data average of 34 years old [26]. The percentage of expatriates under 30 years old in the study sample was 22.2%, whereas the Ministry of Labour reports around 21.3% of expatriates in the same age bracket. The top six nationalities of expatriate workers in the study correspond to the top six nationalities of expatriate workers in the private sector of the Riyadh region, as per the Ministry of Labour’s database [26]. Due to the similarities between the sample size and characteristics of expatriates’ population, we are confident that the sample used for the study is representative of the expatriate population.

Saudi Arabia, like other GCC member countries, has a unique demographic composition in the private sector. Expatriate workers comprise around 90% of the total manpower in the private sector. Therefore, the burden of providing equitable access to health insurance for this group needs to be carefully considered. Specifically, major influences on workers’ access to health insurance are the characteristics of the potential recipients of the insurance and the characteristics of the providers of the insurance.

The Saudi government’s regulations designed to reduce the percentage of uninsured expatriates may not help to achieve its objectives. The regulations include the enforcement of employers to provide insurance to their expatriate workers and a unified health insurance package, along with strong government intervention through a Council and the imposition of penalties for those who fail to follow the regulations. However, this did not change the characteristics of expatriate employees who were uninsured or the employers’ characteristics because there are other influencing factors such as under-development of the health insurance industry in Saudi Arabia [3]. The health insurance companies were the greatest source of complaints in healthcare for the last eight years [30–36]. Also, there have been reports of insurers providing fake insurance to employers acquiring residency visa renewal [23].

Similar to the characteristics of uninsured workers, as documented elsewhere [37–42], the majority of uninsured expatriate workers in Saudi Arabia are young, single and categorized as unskilled and usually uneducated. More than two-thirds of expatriate workers are low income and destitute people (see Table 2). The uninsured population spans all age groups, but younger adults (19–25 years) represent 30% of the uninsured, this could be because they usually begin their careers in positions offering relatively low incomes. Saudi Arabia is similar to other countries, where the risk of being on a low income means that not only is the employer more likely to offer a job without health insurance but also that the premium is unlikely to be shared [43–45].

Studies from the United States, such as Monheit and Vistnes [46], established that a firm’s size was not an indicator of the health status of its employees but uninsured employees in both large and small firms are predictably unhealthier than insured employees [46]. However, their finding is contentious as the outcome could suggest health insurance was only offered to employees who were in good health [47]. Moreover, the present study suggests that the health status of workers in Saudi Arabia is not found to be a significant factor; this is because expatriate workers undergo rigid medical tests before deployment to their work site [48].

Furthermore, this study found that married expatriate workers have better access to health insurance due to the additional income earned by their partner. This finding is supported by a study that found the health insurance of married respondents was more related to total income as the partner’s income augments the family income [49]. Also, in Saudi Arabia, there are married expatriates with professional jobs that allow employees to bring their family with them (i.e. labour workers are not eligible to be accompanied by their family) [50]. Therefore, marital status could be reflecting job status and not marital status.

Other studies have concluded that the higher the job status and the greater the possibility employees will be insured [51–54]. Moreover, research by Chatterjee and Nielsen [55] found that there was no association between the education of expatriate workers and insurance coverage [55]. However, these studies have not considered the distinction between the job and job education requirements. Specifically, while education reflects the personal characteristics of the employee, the job education requirements reflect the importance of the job to the employer. On this basis, we investigated job and education requirements as one of the variables to assess the complexity of the job, its importance to the employers and its influence on an expatriate employee’s access to health insurance. Our study revealed a strong relationship between job requirements and insurance coverage regardless of expatriate workers’ actual education. By implication, job skills and job requirements are more important for Saudi employers when providing health insurance coverage to expatriate employees. This preferential treatment by Saudi employers in respect of health insurance can be attributed to the government’s policy of imposing conditions on the issuance of work visas. The majority of expatriate workers change their job status to ‘manual, labour’ jobs; while in their home countries, they would be in the market for employment requiring higher skills [56]. This disparity, between the workers actual education and job requirements and its influence on employers’ preference for providing health insurance, has not hitherto been studied.

As shown by studies from other countries, small sized companies are less likely to provide health insurance to their workers [45, 49, 57, 58]. The same applies in Saudi Arabia. Health insurance companies in Saudi Arabia provide cover based on risk-pooling, similar to voluntary health insurance, whereby insurers charge premiums in relation to risk [3]. However, during the sixth stage, in 2008, when the CEBHI mandated insurance for all companies, including those with less than fifty workers, insurance companies refused to participate unless their premiums were increased by 200% [59]. This finding was supported by other studies, which found, due to an increase in health insurance premiums, some companies had either stopped providing health insurance to their employees or had changed the system, imposing all or most of the contribution to their employees [60]. Also, one study in Saudi Arabia found the increase in premiums (due to high administrative costs) burdens and limits participation by small employers in the scheme [3].

Our study’s findings, relating to the influence of the economic sector on access to health insurance, are not consistent with those from other studies. We found that workers in the construction sector were more likely to be insured than workers from other sectors. However, findings from other studies suggest people in manufacturing jobs are more likely to be insured than other sectors [39, 61]. This variance could be linked to the competition among business sectors. For example, in the United States there is competition between manufacturing companies and, as a consequence, the employers provide benefits to attract workers. Alternatively, in Saudi Arabia, there is strong competition among construction companies; accordingly, employers provide an incentive package to attract workers, one of which is health insurance coverage. Construction companies also have difficulties acquiring foreign workers due to the work visa constraints set by the government. In contrast, construction companies are the largest employers by size in Saudi Arabia, whereas the manufacturing sector is the largest employer in the United States; therefore, these companies can give better health insurance benefits with a limited increase in the premium. Another study in the region found that expatriates working in construction are less likely to be insured [62]. However, this finding is inconsistent with other studies in the region where it was found that expatriates working in the construction sector were less likely to be insured. Nevertheless, it is worth noting that the study of Joshi and others did not use quantitative methods to mediate the influence of skill requirements for the job to perform the job or workers’ education from the economic sector. However, this study is consistent with other studies that show workers from the agriculture sector are less likely to be insured than those in other sectors [63].

There are other reported reasons for expatriate workers not being insured. The main reason reported by more than one-fourth (27.4%) of respondents was that insurance was provided only to renew expatriate workers’ Iqama. Our findings are supported by another study, which suggests some employers pay insurers ‘under the table’ to renew employees’ Iqamas when in fact the employees do not have health insurance [23]. This finding supports evidence that employers might play a major role in the provision of health insurance for minorities in Asia [45, 57]. The source of this behaviour could either be the employer as indicated or the employees who buy their visas from their sponsors (i.e. pay a monthly salary to their employers, to have freedom of movement) [56]. In both cases, there is supporting evidence that self-employed workers are more likely to be uninsured [39].

Our study found that the second most common reason for expatriate workers being uninsured is that employees are sponsored by different employers. These workers have legal work permits but have either ‘run-away’ from their sponsors (for various reasons) and are classified as unskilled with no education [29, 56], or work independently from their employers (mainly small company employers), who brought them to Saudi Arabia under an employer sponsorship. The employer’s role, in this case, was only to sign all legal papers of the expatriate workers [64] and receive a monthly or annual payment from their now ‘independent employees’ for this service. These employers are called labour brokers, and this service is another form of labour brokering, in which a certain sponsor brings in expatriate workers and rents them out to other companies while workers stay under the sponsorship of the labour broker. It would appear that the first form is more common in the Saudi labour market [64].

The third most common reason for expatriate workers in Saudi Arabia being uninsured was that their visa was for another job. These employees could either have illegal residence status in Saudi Arabia or are self-employed with a visa under a Saudi employer. The motivation behind this is that some expatriate workers give money to Saudi citizens to acquire visas, and pay a certain amount of money annually as a gratuity for this service. This act is illegal. There is evidence to suggest that the main incentive for Saudis to do this is financial [65]. At the end of 2013, the Saudi government undertook steps to rectify the labour market of these “labour corrections” [66]. One of the main objectives of these steps is to reduce the number of illegal workers. Further studies may be required to assess the impact of these steps to reduce uninsured expatriates.

There are some limitations to this study, one being that the study only comprised male expatriates working in the private sector; female expatriates and children were excluded. However, if gender had been included as one of the variables, it would have been very difficult to obtain sufficient participants due to the small number of female employees (98.30% of all expatriates in the private sector are male) [1]. Also, most females working in the private sector work in healthcare and all medical and non-profit sectors were excluded from this study.

One source of potential bias is the fear by study participants of recrimination from their employer, which could have resulted in invalid responses. However, an official letter and identification card from the research sponsor were provided to reassure employees that all responses would be for research purposes only, and the answers would be treated with the utmost confidentiality. In addition, research assistants administering the survey were selected from the same dominant nationalities and languages of the private sector workers, thereby ensuring that the survey could be understood and answered using the participants’ language. Finally, the study is cross-sectional, which may have increased bias with respect to the time ordering of events.

Although the CEBHI seeks to mitigate some disadvantages of the voluntary ESI by requiring employers to cover all expatriate workers with unified benefits packages, there are similarities in the characteristics of the uninsured between CEBHI and other ESI schemes. Most of the literature demonstrates size and competition in the market drive employers to provide fringe benefit packages, which includes comprehensive health insurance coverage. In Saudi Arabia, there is an additional constraint on the government’s policy, which limits work visas issued according to the type of job. Along with the lack of local manpower sources, Saudi employers are obliged to devise strategies to acquire and retain expatriate workers, and they do this by offering attractive employment incentive packages including health insurance. However, this is true for only a select group of expatriate workers depending on the employer’s needs and criticality of the job in the company.

This study revealed that the size of the employer has a substantial influence on expatriates’ access to health insurance. The premium of small size employers will be critical to successful implementation of the CEBHI scheme. The decision maker has to find a way to control the high premiums for the small employers such as unifying them in one single pool.

Since the study was undertaken, the CEBHI scheme has been developed to include an expatriate worker’s family or dependents. It is expected to worsen in the future since children and women utilize health care services more than men. A further study is needed to determine the influence of this policy. Also, with the inclusion of expatriate worker`s family or dependents, it is anticipated that health insurance premiums and health care expenses will be higher than was the case when they were for the worker alone.

The study has reveal that one of the reasons for not beginning insured was due to the practice of obtaining insurance just to meet the requirement for securing a residency permit. This fact gives an indication to the policy maker of the need to increase the solvency requirement for insurance companies thereby increasing the viability of its insurance market and protecting consumers.