Employers Must Rethink Their Role In Health Coverage With SHIF In Mind

Eight months into its rollout, Kenya’s Social Health Insurance Fund (SHIF) has shown that it is far more than a policy experiment; it is now firmly positioned as the foundation of the country’s next-generation health financing system. SHIF replaced the National Hospital Insurance Fund (NHIF), which had been in operation for over five decades. More importantly, it did so with the universal vision that every Kenyan, regardless of income or employment status, should have access to essential healthcare services.

At its core, this shift represents a win for equity because the old NHIF system, while impactful in many ways, was primarily tied to formal employment, leaving out millions in the informal sector or those between jobs. SHIF addresses this by mandating contributions from all Kenyans standardized at 2.75% of gross income, with the government stepping in to pay for vulnerable populations.

This inclusive design means that for the first time, a mama mboga in Kawangware and a bank teller in Hurlingham contribute to and benefit from the same national risk pool. That is no small feat, and it brings Kenya closer to achieving Universal Health Coverage (UHC), while aligning the country with global best practices in public health financing.

However, for employers, especially those with existing private medical benefit schemes, SHIF introduces both challenges and opportunities. The introduction of a compulsory, state-run health financing mechanism raises a pivotal question: “How should private sector employers position their health benefit plans in this new landscape?”

At Minet, we believe that employers should avoid viewing SHIF as a competing program or as a duplication of existing benefits. We consider impulsive actions, like reducing current benefits or completely suspending private schemes, to be short-sighted. Instead, we advocate for a strategic, long-term approach where SHIF is recognized and utilized as a foundational level of healthcare access, rather than the ceiling.

This approach calls for a fundamental mindset shift to a position where the real value for employers lies in complementarity. SHIF  is unlikely to fully meet the expectations of employees accustomed to more comprehensive employer-provided plans, and that is where private schemes continue to play a crucial role.

Employers can now reimagine their medical benefits as top-up or wrap-around covers that enhance what SHIF offers. This could mean coverage for chronic disease management, elective specialized surgical procedures, high-cost invasive diagnostics, overseas referrals, mental and rehabilitation services; areas that are often left out of basic state-run health packages. There is also room to offer a wider choice of providers with shorter wait times and more personalized care, especially in private hospitals.

To do this effectively, we may need to rethink benefit structures, and one possible approach is tiered coverage, where SHIF serves as the entry-level layer, followed by increasingly specialized or premium options tailored to specific employee health risk needs. For example, younger junior staff may benefit from a standardized top-up plan, while senior executives receive access to enhanced, personalized covers that include international treatment options. Such stratification allows for efficiency, equity, and better alignment with workforce health needs.

Another key consideration is compliance. Although SHIF is relatively new and still evolving, it is already introducing rigorous rules concerning remittances, reporting, and employee registration. Going forward, employers will need to develop internal systems that are both SHIF-compliant and future-proof, as the regulatory landscape is expected to continue evolving. With the government digitizing healthcare records and contributions, there will be little room for error. Mistakes, whether intentional or not, could attract penalties or cause delays in employee claims. In this context, staying informed and up-to-date on SHIF regulations becomes a critical HR and finance function.

It is also worth noting that SHIF brings a level of accountability and data validation that Kenya’s healthcare sector has long needed. The digital infrastructure being laid down could, over time, reduce fraud, increase transparency, consolidate health records and help policymakers make data-driven decisions. Employers who embrace this shift early will be better positioned to align their workforce health strategies with national priorities.

Ultimately, SHIF offers Kenya a second chance to build a more inclusive, sustainable, and efficient health financing system. But its long-term success depends on meaningful engagement from all stakeholders, particularly the private sector. Notably, employers must step up to comply with the new framework and to help shape a healthier and resilient workforce. By approaching SHIF as a floor to build upon rather than a burden to work around, we can all contribute to a stronger health system that leaves no one behind.

Read Also: With Health Reform Underway, Kenya Asks More of Employers

Dr. Ngatia Gikere is the Health Risk Advisor at Minet Kenya, an insurance brokerage and risk advisory firm.