New NHIF rates loom after court dismisses union suit

The implementation of the controversial new National Hospital Insurance Fund (NHIF) statutory payments looms after the Industrial Court dismissed a case filed by a workers union challenging the new rates.

Industrial Court judge Nzioka wa Makau said the Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals and Allied Workers (Kudheiha) was adequately represented in negotiations leading to the review.

“The petitioners application dated September 20, 2012 is not fit for grant. It is dismissed with costs,” ruled judge Makau.

The union had obtained an injunction against the increase when it moved to court in September saying the rates were being effected without consultations.

READ: Union disowns fresh NHIF bid to raise rates

After the ruling Kudheiha said it would appeal. “We are considering all legal means including calling for a strike. We will not rest until we are consulted,” secretary-general Albert Njeru said.

The union’s lawyer Charles Ongoto said he had received instructions to file a notice of appeal in the next seven days.

Without an appeal, the ruling would pave the way for the new rates, which were scheduled to take effect in October last year.

Efforts to get a comment from the NHIF management were not successful by the time of going to press.

The new statutory payments would see the contributions of high income earners in the formal sector go up by about 600 per cent from the current Sh320 to a monthly rate of Sh2,000.

Workers earning less than Sh5,999 are expected to contribute Sh150 and those receiving a gross pay of more than Sh100,000 contribute Sh2,000.

Currently all workers pay Sh320 per month.

The review was aimed at expanding the in-patient NHIF scheme to cover outpatient aspects such as laboratory services, drugs and minor surgery.

Civil servants and members of the armed forces would not be affected because they have a separate medical scheme that offers unlimited in-patient and outpatient cover.

The union argued that workers were grappling with hard economic times and would not afford the rates.

The judge said that the issue was already the subject of an appeal filed by the Central Organisation of Trade Union.

Kenya Private Sector Alliance chairman Patrick Obath said there were still questions over NHIF’s capacity to manage the medical scheme.

“This will add new burden to the workers and it’s like telling them to cater for all unemployed,” said Mr Obath.