You will soon be penalised for defaulting on NHIF contribution

The government is seeking to set up a national health scheme to boost Universal Health Coverage (UHC) programme.

According to the National Health Insurance Fund (Amendment) Bill, 2021, before the National Assembly, all Kenyans who have attained the age of 18 will be enrolled and required to contribute Sh6,000 annual subscription in the new remodelled medical scheme if approved by MPs.

The Bill seeks to enhance the mandate and capacity of NHIF to facilitate and deliver the UHC, piloted in Kisumu, Isiolo, Machakos and Nyeri counties before being rolled out to the rest of the country.

"The Bill proposes to insert a new section 15A to make it mandatory for any person who has attained the age of 18 years and is not a beneficiary to register as a member of the Fund," reads the Bill.

"The Bill proposes to amend section 18 of the Act to prescribe a penalty for late payment of standard and a matching contribution."

The proposals have far-reaching amendments, the government wants to make on the National Hospital Insurance Fund (NHIF) Act, 1998.

If the Bill sponsored by Majority Leader Amos Kimunya becomes law, it will target more than 16 million adult Kenyans who are not covered by the NHIF.

Official data shows more than 25.36 million Kenyans are above 18 years and NHIF has 8.898 million members.

The NHIF had 8.466 million members as at end of June 2019 – with 4.29 million drawn from the formal sector and 4.16 million from the informal segment.

This means, the contributions to NHIF will no longer be voluntary after the repeal of sections that gave the public the choice of contributing to the national insurance scheme or not.

The Act makes it voluntary for workers in the informal sector to contribute Sh500 monthly while employees in the formal jobs are mandated to contribute between Sh150 and Sh1,700.

The Bill will make it mandatory for employers to match the employees' contribution to the Fund.

For instance, if an employee is deducted Sh1700 as a contribution to NHIF, the employer will also be required to make a similar contribution.

Currently, parents who are members of NHIF are allowed to enrol their children as beneficiaries until they turn 18 years.

NHIF continues to cover such beneficiaries up to 21 years provided they have no income and are fully dependent on the contributors.

Only those who are mentally or physically handicapped and fully dependent on contributors are excluded from getting their own cover after 21 years.

The State had offered to sponsor one million poor households at the onset of the UHC scheme, which is modelled on the US’s Obamacare that requires all Americans to buy insurance cover.

Obamacare that is anchored in the Affordable Care Act (ACA) requires everyone to have a health cover and imposes a tax penalty on those who fail to purchase a health insurance plan.

It, however, offers subsidies to those who cannot afford a plan on their own through tax credits and paying insurance companies to keep their deductibles low.

Any person who is in salaried employment will make a standard contribution while self-employed people will make a special contribution.

Failing to pay the special contribution will attract a penalty equal to five times the amount for each month the contribution is in default.

The changes are part of the government's attempt to ramp up the medical scheme and introduce UHC.

Clause 10 of the Bill proposes an amendment to provide for the liability of employers to make a matching contribution to the Fund equal to that which the employee is liable and make it mandatory for Kenyan residents to contribute to the Fund.

Some of the funds that NHIF will collect will go towards acquiring essential medical equipment and development of infrastructure to hospitals and the contracted healthcare providers

The government is also proposing stiffer sentences for hospitals that will engage in fraud.

A hospital that fraudulently alters or falsifies any information with the intent of defrauding NHIF will be fined up to Sh500,000 and suspended from NHIF list of facilities for as long as five years.  

[email protected]