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KENYA: MPs pass Bill making NHIF mandatory for all Kenyans

PRESS RELEASE: All Kenyans will be compelled to be members of the National Hospital Insurance Fund (NHIF) with employers toping up contributions of those who pay less than Sh500 monthly.

MPs last evening approved changes to the NHIF Act, which now makes it compulsory for every Kenyan above 18 years to contribute to the fund.

The government-backed National Hospital Insurance Fund (Amendment) Bill will see all adults compelled to pay Sh500 monthly or Sh6,000 annually in a remodelled Universal Health Coverage (UHC) scheme for outpatient and inpatient services, including maternity, dialysis, cancer treatment and surgery.

The MPs rejected the National Assembly Committee on Health amendments, which sought to have the national and county governments foot the bills for the 5.1 million poor households.

“A person who has attained the age of 18 years and is not a beneficiary shall register as a member of the fund,” a new clause, introduced last evening to the Bill states.

The NHIF board will determine the rate that the unemployed youth will pay to the Fund.

Employers with workers earning less than Sh12,000 will now be compelled to top up their employees’ contributions to the NHIF.

Currently, workers who earn between Sh8,000 and Sh11,999 pay Sh400 monthly, according to NHIF rates.

Formal sector workers contribute to the NHIF based on their salaries with the highest contribution being Sh1,700

Employers were facing up to Sh1,700 additional monthly statutory deductions per worker under the Bill but Leader of Majority Amos Kimunya lobbied MPs to make changes to have employers top up employees’ contributions instead of matching them.

“The base of contribution will be Sh500. But there are employees in the private sector who contribute Sh150 or Sh300. The import of this amendment is to ensure that the private sector employers simply top up the difference to ensure employees base is Sh500,” Mr Kimunya said.

Formal workers contributed Sh24.89 billion to the NHIF in the financial year ended June 2017, meaning that employers were to spend more than this on the State health cover given that formal contributors had risen to 4.452 million at the end of June last year.

“The national government and county government shall be liable as a contributor to the Fund in respect of all public officers, state officers and employees working in the national government and national government entities,” the new changes states.

“Any other employer shall be liable as a contributor to the Fund in respect of its employees.”

President Uhuru Kenyatta in June appealed to lawmakers to pass the Bill, which offers his administration the best chance of providing affordable healthcare for all Kenyans.

Employers had petitioned Parliament to reject the proposal in the Bill compelling them to match their workers’ NHIF contributions, saying it will be an added burden as they struggle to recover from the economic fallout of the coronavirus pandemic.

MPs also created three categories and rates payable to NHIF by persons whose income is derived from self-employment.

“The essence is to ensure a self-contributor without a family pays a different rate from one with a family. The unemployed whether young or old and who is not an indigent will have a different rate,” Mr Kimunya said. The board will determine the rates through regulations.

Official data shows over 25.36 million Kenyans are aged 18 years and above, meaning the compulsory contributions would have added at least 16.36 million contributors, nearly tripling NHIF membership.

For the original press release, please click here.