By Nick Weru
Overview & Summary:
On the 17th of October, 2023, the President assented to the Social Health Insurance Act (hereinafter referred to as “the Act”), a legislative initiative to establish a comprehensive framework for managing social health insurance. This Act is intended to align with Article 43(1)(a) of the Constitution, which guarantees every individual the right to the highest attainable standard of health, including access to healthcare services.
Key Provisions:
Section 1 – Effective Date:
The Cabinet Secretary for Health, Susan Nakhumicha, has designated the effective date by gazette as 22nd of November 2023.
Section 4 – Social Health Authority:
Section 4 of the Act establishes the Social Health Authority, which is the entity that will take over NHIF.
Section 5 – Functions:
The Social Health Authority has various functions, including beneficiary registration, management of contributions, engagement with healthcare providers, and implementation of government policies relating to social health.
Section 7 – Board:
The Act mandates the establishment of a board to oversee the operations of the Social Health Authority. A chairperson appointed by the President will head this board, and its members will include representatives from the Ministry of Health, the Ministry of Finance, and the Council of Governors, among others.
Section 25 – Social Health Insurance Fund (SHIF):
This section establishes the Social Health Insurance Fund (SHIF), which will serve as the repository for contributions made under the Act.
Section 26 – Registration:
The Act requires every Kenyan to register as a member of the SHIF. Additionally, non-Kenyan residents are also eligible for registration. Children born after the commencement of the Act shall also be registered at birth. Registration under the Act is a prerequisite for accessing public services.
Section 27 – Contributions:
The following persons shall be liable to contribute to the Fund: –
- Every Kenyan household
- A non-Kenyan resident, ordinarily residing in Kenya for a period exceeding 12 months
- The national government
- The county government
- Any other employer.
‘Household’ means a social unit comprising of an eligible contributor, whether contributing by self or paid for, and their beneficiaries, or who share the same social-economic needs associated with consumption and production.
The contributions are made as follows: –
In the case of a household whose income is derived from salaried employment, by a monthly statutory deduction from the wages or salary by the employer at a rate prescribed under the Act.
In the case of a household whose income is not derived from salaried employment, by an annual contribution of a proportion of household income as determined under the Act.
Financially challenged households will have contributions made by the government, and those in lawful custody will be funded by the government from parliamentary appropriations. Permanent residents and others will contribute at prescribed rates.
Non-payment of contributions attracts a penalty. Access to healthcare services under the Act is subject to contributions to the Fund being up to date and active.
Section 31 – Receipt of Benefits
Every beneficiary shall be entitled to an essential healthcare package prescribed by the Cabinet Secretary in consultation with the Board.
Part VIII – Dispute Resolution:
The Act establishes a dispute resolution tribunal to ensure a fair and just system. This tribunal provides a mechanism for individuals who feel aggrieved by decisions made under the Act to appeal, fostering accountability and transparency.
Transition Provisions:
A crucial implementation aspect involves transitioning from the existing National Health Insurance Fund(NHIF) to the newly established SHIF. The NHIF will vest in the SHIF immediately upon the Act becoming effective, and the NHIF is required to conclude its operations within one year from the effective date.
Impact on Employees:
Section 50 of the Act grants the Cabinet Secretary for Health the authority to create regulations specifying details related to payment, contributions, and the corresponding amounts and rates under the Act. Currently, these regulations have not been established by the Cabinet Secretary. Nevertheless, the President and the Cabinet Secretary have fulfilled the required appointments to the board as outlined in Section 7 of the Act.
It is anticipated that the Cabinet Secretary, in collaboration with the Board, will formulate rates and procedures for registering and making payments into the fund, which are crucial for implementing the Act.
Although a government proposal was communicated through the President earlier in the year, suggesting a flat health insurance contribution rate of 2.75%, this rate has not been officially enacted under the Act. However, it appears probable that this proposed rate will be implemented.
Conclusion:
We anticipate that the government, either through the Ministry of Health or the Board of the SHIF, will soon establish mechanisms for implementation to clarify the transition process.
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