The transition from the National Health Insurance Fund (NHIF) to the Social Health Insurance Fund (SHIF) is now underway, with key changes taking effect on 1 October 2024. This update outlines important compliance requirements for employers, including registration deadlines, contribution rates, and the legal developments surrounding the validity of the SHIF legislation. Employers must take note of the critical timelines and legal obligations to ensure smooth compliance during this transition period.
Key Dates:
- 30 September 2024: Last date for NHIF admissions.
- 1 October 2024: SHIF coverage begins.
- 9 October 2024: Payments received by this date will be credited to NHIF.
- 9 November 2024 onwards: Payments will be credited to SHIF.
Court Proceedings: The Court’s latest decision on this subject has been Cabinet Secretary, Ministry of Health v Aura & 13 others (Civil Appeal (Application) E565 of 2024) [2024] KECA 1195 (KLR) (20 September 2024) (Ruling) in which the Court granted a stay of execution of the Judgement of the High Court which declared the SHIF and related legislations illegal.
The decision was delivered on 20th September 2024 and it has paved the way for implementation of SHIF effective 1st October 2024.
Employer Obligations: The Ministry of Health has announced the official transition to the Social Health Insurance Fund (SHIF) effective from 1 October 2024 (See Notice here). Employers must register with the SHIF and then register their employees and their dependents via the SHA Employer Portal by this date.
Contributions:
For salaried employees: Employers are required to contribute 2.75% of gross salary (minimum KES 300, no maximum). Remittances must be made by the 9th of each month.
Penalties:
- Late payments incur a penalty of 2% of the unpaid contribution.
- Failure to remit contributions may result in fines up to KES 2 million, imprisonment for up to three years, or both.
Next Steps for Employers:
- Register with the Social Health Authority (SHA) before 1st October 2024.
- Register employees with the Social Health Authority (SHA) before 1 October 2024.
- Ensure timely remittance of contributions to avoid penalties.
Researched and compiled by Nicholas Weru, Partner. For further advice on any matters raised, please feel free to contact Nick
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