Court Orders Against NHIF Grant a Temporary Reprieve to Kenyan Employers
The NHIF Amendment Act, 2022 which became law in January introduced a requirement for employers to match the NHIF contributions of their workers while not deducting the cash from their employees’ remuneration. This would have generated an additional 31 Billion for the National Health Insurance Fund which reported premiums to the tune of 80.43 billion last financial year. Other provisions of the Amendment Act included:
- The requirement for exhaustion of private medical insurance coverage before the National Health Insurance Fund (NHIF) cover can be used.
- The requirement that employers must pay for a private medical insurance cover for employees that guarantees benefits that are equal to or better than benefits under the Principal Act in order to be exempted from making matching NHIF contributions.
The Federation of Kenya Employers however, took to The Employment and Labour Relations Court at Nairobi to decry the additional employment expenses in this grappling economy. They challenged the constitutionality of the amendments introduced through the National Health Insurance Fund (Amendment) Act No. 1 of 2022, arguing that adequate public participation was not conducted before approval of the act. Additionally, they argued that the amendment infringes employers’ rights to fair administrative action, property & equality, and freedom from discrimination among other grounds.
The government-backed insurer has been on a mission to boost its annual premiums in a bid to cover costly diseases such as cancer. It raised workers’ contributions from 200 shillings to a graduated scale of between 500 shillings and 1,700 shillings per month depending on salary brackets. Over the course of the last two years, NHIF has tapped more into the informal sector to increase its membership.
The Employment and Labour Relations Court gave a lifeline to employers by not only freezing the implementation of this Amendment Act but also barring the Health Cabinet Secretary from gazetting any regulations that would have put the amended law into effect. The ruling was revealed to lawmakers by NHIF chief executive Peter Kamunyo. “However, we were served with a court order stopping the implementation of the new Act. We appeal to you (MPs) to help us pass draft regulations to implement the law,” Dr Kamunyo told the National Assembly committee on Health.
This has offered a temporary reprieve to Kenyan employers but probably not for long as NHIF is seeking help from parliament to make sure the amendments are implemented in the long run.