Abstract
Construction contractors in Saudi Arabia were exposed to additional expenses due to implementing a new government decree related to medical insurance for foreign employees. The number of foreign employees reached to eight million people out of 27 million people the total population of Saudi Arabia. This huge number of foreign people exerted pressure on the public free medical facilities that forced the government to issue a decree that instructs private sector to use private medical facilities for their foreign employees. This paper presents results of a study to identify the effect of the medical insurance decree on construction industry in Saudi Arabia. The methodology used was to prepare a questionnaire that investigates the objectives of this study and distributes it to the contractors. The questionnaires were distributed to 150 construction contractors and 90 questionnaires were collected. Results of the study reveal the effect of the compulsory medical insurance on the construction contractors in general and according to their classifications. In addition, the study presents the current practice implemented by contractors to provide medical care for their foreign employees.