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FKE, Cotu reject controversial NHIF Bill

BUSINESS
By Moses Nyamori | June 30th 2021

National Hospital Insurance Fund Headquarters, Upper Hill, Nairobi. [Elvis Ogina, Standard]

Various stakeholders have rejected a raft of clauses in the controversial National Health Insurance Fund (NHIF) (Amendment) Bill, 2021.

Majority termed some proposals untenable, counterproductive and punitive to unemployed youth and even employers.

The Bill by National Assembly Majority Leader Amos Kimunya seeks to make it mandatory for adult Kenyans to contribute Sh6,000 annual subscription to NHIF.

The Bill also seeks to compel employers to match employees' contributions to the Fund.

Currently, the contribution to the Fund is voluntary and capped at Sh500 per month for those in informal employment while those in formal employment are deducted based on their salaries.

Appearing before the National Assembly Health Committee yesterday, some stakeholders said enacting the Bill could force employers to review salaries of employees or reduce workforce to cut down on costs.

Federation of Kenya Employers (FKE) Executive Director Jacqueline Mugo said the proposals could force employers to cut private insurance schemes for employees as they would be required to channel their contributions to NHIF.

“All Kenyans aged 18 and above to mandatorily contribute is not feasible. There are many persons in this bracket that either do not have the means to earn an income or do not have the ability to contribute,” submitted Ms Mugo.

She said the proposal was only feasible in a country with majority of citizens are in formal employment.

“In Kenya, almost 85 per of persons in wage employment are in the informal sector. How will government enforce it? Will government jail millions of defaulters?” She posed.

FKE proposed that contributions to the Fund be made by persons in formal employment while the government provides for the gap in funding from the exchequer in line with the Abuja Declaration on healthcare financing.

She further said employers should not be compelled to match the employees’ contribution to NHIF.

“This will not only affect the wage bill and sustainability of enterprises but also destroy capacity of enterprises to create new jobs and sustain existing ones,” said Mugo.

She argued that the proposal assumes that employers do not provide for medical insurance for their employees.

“Most employers operate private medical insurance schemes for their employees. Making it mandatory for the employers to match their employees’ contribution will mean that they are paying double for health insurance. This will not only lead to unnecessary increase in the cost of labour, but also destroy the private health insurance industry and the competitiveness of Kenya’s Business Operating environment,” stated Mugo.

Central Organisation of Trade Union (Cotu) Secretary-General Francis Atwoli said the proposed amendments should be shelved and Universal Healthcare executed through a body managed and constituted outside the management structure of the NHIF.

Mr Atwoli said funds from the government should not be put together with workers’ monthly contributions.

The Cotu boss urged the government to develop an independent scheme for affordable healthcare for all Kenyans other than amending NHIF.

He suggested a different management system and board answerable directly to the Treasury as a financier while NHIF should continue its mandate with contributors as currently constituted. 

“Looking at the amendments as proposed, this Bill aims at disbanding the current formation and structure of the NHIF into a different entity and this is where we as workers remain opposed,” Atwoli told the committee chaired by Murang'a Woman Rep Sabina Chege.

He said failure to separate the two entities will lead to erosion of the much-needed confidence from the five million-plus loyal NHIF contributors making the Fund a ‘free for all’ that is likely to lead to its eventual collapse.

Britam Insurance also opposed the clause requiring employers to match employees’ contributions to the Fund.

The insurance representative Jackson Theuri told the committee that the cost of having a permanent employee would go up if the Bill was implemented.

He said some employers will be forced to send home employees to cut costs.

“The implication of this is that insurance companies will suffer reduced income. It will also mean reduction of taxes collected by government from the players,” said Mr Theuri.

But Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU) described the move to include UHC under the NHIF Act as highly commendable of the government.

KMPDU in its submission said that the move will make Kenyans realise their right to healthcare as per Article 43(1) (a) and (2) provisions of the Constitution of Kenya 2010. 

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