Section 3 of The Health Insurance Law, entitled “Compulsory health insurance,” states that all residents of the Cayman Islands must be covered by a standard health insurance contract issued by a locally approved insurer.

A standard health insurance contract is a policy of health insurance issued on a Cayman Islands resident by an approved insurer. The law has established four standard health insurance contracts ranging from contract I, which is basic, to contract IV which contains more comprehensive benefits.

Employers are responsible for providing health insurance for all of their employee’s unemployed spouse and any of the employee’s children who reside in the Cayman. The coverage must be from an approved insurer. Failure to comply means that the employer may be liable to a fine of up to $10,000. If an employer does not provide health insurance for his employees, he may also be liable to pay, as a civil debt, the cost of any claims the employee and any dependents may have incurred up to the limits set down in a standard health insurance contract. An unemployed or self-employed person must provide their own cover, also with an approved insurer, and must also insure their unemployed spouse and children. The employer should secure pre-approval of health coverage as part of the hiring and/or work permit process to unsure no person gives up coverage until replacement coverage us issued. Within 15 days of commencement of employment, the employer must provide the employee, in writing, with details of the insurance coverage provided.

By establishing four standard health insurance contracts, the law streamlines a process that has, in the past, been confusing for patients and providers alike. With only four standard contracts, providers will know precisely what services are covered under each contract and how much they will be reimbursed by the approved insurer. Providers will be familiar with the plans which will make administration of patients care much easier. The patients will no longer have to choose from dozens of different and often confusing plan designs. Furthermore, patients will become familiar with the four standard contracts and will know precisely what to ask for when searching for a health insurance plan to fit their specific needs.

The self-employed or individual insured persons must pay their own premiums. An employer is responsible for paying the premiums on behalf of his employees. The employer must also contribute 50% of the cost of the standard health insurance contract for each employee. The employer is not required to contribute premiums for the employee’s pay check(s) r as otherwise arranged with the employee.

An “approved insurer” is a Class A Insurance Company licensed by the Cayman Islands Monetary Authority under the Insurance Law (2004 Revision) and approved to offer standard health insurance contracts must be issued on all residents of the Islands. It is vital that all insurers offering standard contracts in the Cayman Islands by approved in order that they fall under the regulatory oversight of the Health Insurance Commission.

Aetna Life & Casualty (Bermuda) Ltd; Generali Worldwide Insurance Company Ltd; N.E.M. (West Indies) Insurance Ltd; British Caymanian Insurance Company Ltd; Cayman General Insurance Company Ltd; Cayman Islands National Insurance Company (CINICO) Ltd; and Sagicor Life of the Cayman Islands Ltd.

If a person is refused coverage by two or more insurers, that person becomes an uninsurable person under the law. That person may then make application for coverage with CINICO (Cayman Islands National Insurance Company) – an independent, government-owned insurer established to provide health insurance for those persons unable to obtain coverage either for health reasons or financial reasons. This person is still encouraged to seek coverage wherever possible and to reapply with their employers group plan if eligible at a later date (for example: if a person is denied due to being overweight and the extra weight is lost and kept off, the employee may usually reapply after a prescribed period of time.)

Insurance companies can only cancel a policy because of outstanding premiums, non-disclosure of a material fact, or a material misrepresentation of a fact.