Employers can breathe a sigh of relief after the Court blocked the enforcement of a law demanding them to match contributions estimated at 31 billion shillings for their workers to the National Health Insurance Fund (NHIF).
This comes as a reprieve to employers who would have been burdened with additional costs of employment under the current challenging economic landscape.
The ruling was made by the Employment and Labour Relations Court and was revealed to lawmakers by NHIF chief executive Peter Kamunyo. The court froze the implementation of the law and also barred Health Cabinet Secretary from gazetting any regulations that would have put the amended law into effect.
“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.
The NHIF Amendment Act, 2022 requires employers to make a matching contribution to the fund equal to that which their employee is liable to contribute and not to deduct the same from the salary or remuneration of the employee.
Matching the contributions would have seen NHIF increase its annual premiums to 111 billion shillings from the current 80 billion shillings.
The Federation of Kenya Employers (FKE) challenged the amendments arguing that sufficient public participation was not conducted prior to enactment, adding that the amendment violates employers’ rights to fair administrative action among other grounds.
Unaudited results for the 2021-22 financial year show that NHIF raked in 80.43 billion shillings in premiums, a 29.4 percent jump from last year.
It is seeking to increase its income to boost coverage for diseases such as cancer and offer health insurance to all Kenyans. It raised workers’ contributions from 320 shillings to a graduated scale of between 500 shillings and 1,700 shillings per month based on monthly payments.
The government-backed fund is seeking additional resources to increase its membership, especially from the informal sector. Data shows that NHIF had 8.898 million members at the end of June 2020, with 4.546 million members drawn from the informal sector.
NHIF targets to collect an estimated 81 billion shillings annually helped by the compulsory membership.