NHIF ACT.pptx2024202420242024444444444444

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1. LABOR LAW AND INDUSTRIAL RELATIONS GROUP 8 MEMBERS SAMUEL KILONZO- 21S01ABA032 KAREN WANJIKU-21S01ACD007 WHITNEY KEMUNTO-21S01ALLB009 JOEL BARASA-21S01ALLB023

2. National Health Insurance Fund Act, Cap 255

3. INTRODUCTION The National Health Insurance Fund (NHIF) was established to provide health insurance to all Kenyan citizens, particularly focusing on employees in both the formal and informal sectors. The Act mandates both employers and employees to contribute towards the Fund, which covers a range of healthcare services, including both inpatient and outpatient care.

4. Establishment of the Fund. Section 3 of the Act establishes the NHIF as a corporate body responsible for collecting contributions, managing the funds, and ensuring that healthcare services are provided to contributing members

5. Registration as a member of the Fund. Under Section 14 (1) A person who has attained the age of eighteen years and is not a beneficiary shall register as a member of the Fund. Section 2 "beneficiary" means a person who— (a) has not attained the age of twenty-one years, has no income of his own and is living with the contributor;

6. (b) has not attained the age of twenty-five years, is undergoing a fulltime course of education at a university, college, school or other educational establishment or serving under articles or an indenture with a view to qualifying in a trade or profession and is not in receipt of any income other than a scholarship, bursary or other similar grant or award; (c) is a person with disability and is wholly dependent on and living with the contributor; (d) is a spouse; or (e) is a contributor .

7. Under Section 15(1) of the NHIF Act, every employer who employs one or more employees is required to register as a contributing employer and they must also register all their employees who qualify to be members of the Fund.

8. Obligation to Register with NHIF Employees have an obligation to ensure they are registered with the NHIF to benefit from its services. Section 15 makes it mandatory for all eligible employees to be registered members of the NHIF. Registration ensures that the employee is included in the system and can benefit from the medical services offered by the Fund.

9. Deduction and Remittance of Contributions Section 15(1A) Subject to this Act— (a) the national government shall be liable as a contributor to the Fund in respect of all public officers, state officers and employees working in the national government and national government entities; (b) each county government shall be liable as a contributor to the Fund in respect of all public officers, state officers and employees working in the county government and county government entities; and (c) any other employer shall be liable as a contributor to the Fund in respect of its employees.

10. (2) A person liable as a contributor under this section shall pay to the Board— (a) in the case of a person whose income is derived from salaried employment, a standard contribution; (c) in the case of an employer who is the national government or national government entity, a matching contribution, equal to that which their employee is liable to contribute under subsection (1)(c); (d) in the case of an employer who is the or county governments or county government entity, a matching contribution, equal to that which their employee is liable to contribute under subsection (1)(c); (e) in the case of any other employer under subsection (1A)(c), a matching contribution equal to that which their employee is liable to contribute under subsection (1)(c), subject to subsection(2A) ;

11. (2A) An employer other than the national government or county governments or their entities liable to pay a matching contribution under section 15 may be exempted from paying such matching contribution, if that employer has procured a private health insurance cover for its employees and the benefits are equal to or better than the benefits that the employees are entitled to under this Act. (2B) An employer who intends to be exempted under subsection (2A) shall submit an application to the Board in writing together with a certificate issued by the Insurance Regulatory Authority to that employer— certifying that the respective employees have been insured by a private health insurer; (b) specifying the details of the cover and the benefits; and (c) specifying the validity period of the private health insurance cover. (2C) The Board— (a) shall determine an application under subsection (2B) within thirty days of receipt; and (b) may grant the exemption if the Board is satisfied that the private health insurance is adequate.

12. Under Section 16 , the employer is required to deduct NHIF contributions from the employee's wages or salary and remit them to the Fund. The amount deducted is based on the employee's gross monthly earnings, with higher earners contributing more. The NHIF Act operates on a progressive contribution system where the contribution increases with the employee’s salary. The Act states that contributions must be remitted by the 9th of every month following the month for which the deductions were made. Failure to remit contributions on time or at all constitutes an offense under the NHIF Act, and the employer may be subject to penalties

13. Purpose of Contributions The primary purpose of contributions to the NHIF is to create a financial pool that can be used to provide health insurance benefits to members. This system ensures that contributors have access to healthcare services while distributing the financial risk associated with health-related expenses across a larger population.

14. Employees Rights and Obligations The National Health Insurance Fund (NHIF) Act, Cap 255 outlines both the rights and obligations of employees concerning their health insurance coverage. These provisions ensures that employees in Kenya have access to healthcare services through mandatory contributions

15. Right to Healthcare Coverage Employees have the right to healthcare coverage under the NHIF, ensuring that they can access medical services when needed. Section 22 of the NHIF Act outlines the benefits that employees are entitled to under the Fund. These include access to inpatient and outpatient services in NHIF-accredited hospitals, maternity care, surgery, and other essential medical treatments. This right is fundamental, as it guarantees that employees are not left vulnerable to healthcare costs.

16. Employees have the right to be informed about their NHIF contributions and the services available to them. Right to Information

17. Grievance Redress Employees have the right to seek redress if their rights under the NHIF are violated, such as being denied access to services despite being a contributor. Section 23 allows employees to lodge complaints with the NHIF if there are issues concerning their membership, contributions, or access to healthcare services.

18. Mandatory Contributions by Employees Employees are required to contribute to the NHIF, which is deducted from their salaries. Section 15(2) states that contributions are mandatory for all employees who are registered with the NHIF. The contributions are deducted from the employee’s gross monthly salary by the employer and remitted to the NHIF.

19. Obligation to Contribute  Mandatory Contributions: Every member is required to contribute a specified amount to the Fund. This obligation extends to all categories of contributors, including employees, self-employed individuals, and special groups. Employer Responsibilities: Employers are tasked with deducting contributions from employees' salaries and remitting these amounts to the NHIF within specified timelines. This system simplifies the collection process and ensures timely contributions.

20. Contribution Rates  Graduated Contribution Scale: The Act outlines a graduated scale for contributions based on income levels. Higher earners contribute more than those with lower incomes, promoting equity in healthcare financing. First Schedule Reference: The specific rates of contribution are detailed in the First Schedule of the Act. This schedule is subject to periodic review by the Board of Trustees to reflect changes in economic conditions and healthcare costs.

21. Penalties for Non-Compliance Section 16 (6) Any person who— (a) fails without lawful excuse to pay, within the time and in the manner prescribed by this Act in relation to him, any standard or matching contribution which he is liable as an employer to pay under this Act; or (b) knowingly makes any deductions from the salary or other remuneration of any person employed by him, purporting to be a deduction in respect of any standard contribution, other than a deduction which he is authorized to make by this Act, commits an offence and is liable on conviction to a fine not exceeding five hundred thousand shillings.

22. Se ction 18(1) If a standard or matching contribution which a person is liable to remit under section 16, has not been remitted by the day on which the payment of the standard or matching contribution is due, the person shall be liable to pay a penalty equal to the lending rate of interest, of the amount of the contribution, as may published by the Central Bank of Kenya from time to time. (2) If an employer fails to pay a standard contribution in respect of any person employed by him— (a) that employer shall be liable to pay the penalty prescribed in subsection (1) and pay the costs incurred by the employee that would have been covered by the Fund when seeking treatment from a contracted health care provider during the period when the contribution is due; (b) that employee shall not be liable to any penalty under this section for so long as he is employed by that employer; (c) where an employer is a national government, county government or a national or county government entity, the respective accounting officer shall be personally liable for the costs that would have been covered by the Fund and incurred by the employee when seeking treatment from a contracted health care provider during the period when the contribution is due.

23. Implications of Section 15 Promoting Universal Health Coverage By mandating contributions from all employees, Section 15 plays a crucial role in promoting universal health coverage in Kenya. It aims to create a sustainable funding model that can support a wide range of health services for all members. Financial Sustainability of NHIF The graduated contribution scale reflects an equitable approach to healthcare financing. By requiring higher contributions from those who can afford it while providing subsidized rates for vulnerable populations, the Act seeks to reduce disparities in access to healthcare services.

24. The structured approach to contributions ensures that the NHIF has a steady stream of revenue, which is essential for maintaining its operations and expanding its benefits package over time. Regular reviews of contribution rates help adapt to changing healthcare needs and economic conditions. Equity in Healthcare Financing

25. Challenges in Implementation While Section 15 provides a robust framework for contributions, several challenges may arise during implementation: Informal Sector Coverage: Ensuring compliance among informal sector workers remains a challenge due to their diverse income levels and lack of formal employment structures.

26. Awareness and Education: Many potential contributors may not fully understand their obligations or the benefits of participating in the NHIF, necessitating ongoing public education efforts. Administrative Capacity: The NHIF must maintain adequate administrative capacity to manage contributions effectively, including timely collection and processing