Employers To Pay NHIF For Staff As Fines Increases By 20 Times

If Parliament passes a Bill that requires business owners to match workers’ monthly contributions to the National Hospital Insurance Fund (NHIF), Kenyan employers will face the additional burden of statutory deductions

Doubling the 1,700 shillings that top contributors make to the NHIF ranks high on the list of targeted changes to the NHIF Act, which will be introduced to Parliament at a special session.

The plan is to have the workers continue paying the same amounts and employers matching in a structure modeled on the National Social Security Fund (NSSF).

This will see employers pay at least Sh25 billion to NHIF, a hit to firms that are yet to recover from a coronavirus-induced slump, which triggered job cuts, hiring freezes, and business closures.

According to the National Assembly Majority Leader, Amos Kimunya, the bill proposes to amend Section 15 of the Act to provide for the liability of employers to make a matching contribution to the fund equal to that which the employee is liable and makes it mandatory for Kenyan residents to contribute to the fund

He added that a person liable to pay a matching contribution under Section 15 shall pay such contribution in their capacity as an employer and shall not deduct such contribution from the salary or other remuneration of the employee

The NHIF has moved to increase fines against individual contributors and health facilities by up to 20 times.

Through the National Hospital Insurance Fund (NHIF) Amendment Bill, 2021, the institution has proposed that individuals who obtain benefits through false claims be subjected to a fine of Ksh10 million.

That is a departure from the current act that provides that the individuals be fined an amount not exceeding 500,000 shillings or imprisonment of 24 months

“Section 25 of the principal Act is amended in subsection (1) by deleting the words ‘a fine not exceeding five hundred thousand shillings or to imprisonment for a term not exceeding twenty-four months, or both and substituting, therefore, the words ‘a fine not exceeding ten million shillings or to imprisonment for a term not exceeding sixty-months, or both.” read the statement.

Individuals who impersonate other people whether living or dead are also liable for the sentence and fine

The proposed bill also cautioned hospitals that defrauded NHIF by making false claims noting that they risked “removal from the register of empaneled and contracted health care providers.”

At end of June 2020, the NHIF had 8.898 million members with 4.452 million drawn from the formal sector and 4.546 million from the informal segment.

Formal workers contributed 24.89 shillings billion to the NHIF in the financial year ended June 2017, the latest available detailed financial statement shows, a pointer that employers will pay at least Sh25 billion.