NHIF is enforcing payment of the rates which will see monthly contributions from workers rise by up to 525 per cent, despite strong opposition from the Central Organisation of Trade Unions (Cotu).
NHIF’s move comes one month after the High Court rejected Cotu’s attempt to have the new rates suspended indefinitely and the Court of Appeal declined to grant the union a stay of execution that it had sought as it moved to challenge the High Court decision.
Yesterday, the union said in a paid-up advertisement that it was disturbed by the decision of some employers to start charging their employees the new rates despite a pending determination of a case it has filed in the appeal court.
NHIF insisted that there is no legal barriers to implementation of the new rates unless Cotu’s petition in the Court of Appeal succeeds. “We have sent notices to employers advising them that the new rates will be due from May,” said Richard Kerich, the chief executive of NHIF.
“We are not aware of any legal obstacles standing in the way of the new rates after we won the court case,” he said.
NHIF is set to raise monthly contributions for those earning a gross salary of Sh100,000 and above from Sh320 to Sh2,000 to finance an expanded programme that covers both outpatient and in-patient services to its members.
Those earning between Sh50,000 and Sh100,000 will pay Sh1,500 per month while the lowest paid formal sector workers earning a salary of less than Sh5,999 will contribute Sh150 in a structure aimed at having higher paid workers subsidise low-income earners.
COTU has in the meantime given a notice of intention to call a national workers’ strike to oppose the new rates.
“Cotu demands that all employers throughout the country stop forthwith any such threats and/or these deductions ... and any employer who will go against this demand should be ready to face the consequences including the disruption of the current industrial peace,” Francis Atwoli, Cotu’s secretary-general, said in a statement, adding that there is a pending appeal on the matter in court. Employers insist that the new rates are a burden to both employers and workers because most companies already have private medical insurance schemes.
Cotu has maintained that its objections to the new rates is based on NHIF’s failure to consult with the trade union besides arguing that the rates are exorbitant and that the fund has no capacity to effectively run the expanded medical scheme.
Cotu has representation in the board of NHIF. The trade union sees the rates as eroding workers’ earnings, especially those in subordinate or supportive roles who earn the least.
Private sector organisations have joined Cotu in opposing NHIF’s new fees arguing that they will raise the cost of doing business in Kenya and increase inflation pressure as companies pass on the additional costs to consumers.
“There are many concerns from varied groups on the new rates by NHIF. Many employers already have private medical insurance covers and the new NHIF rates amount to duplication of costs,” Ms Mugo of FKE said.
“We hope that we shall meet and have consultations with NHIF before the end of this month when the deductions are expected to begin,” she said.
Should Cotu made good its strike threats, it could worsen an already turbulent labour market where employees in various sectors have been demanding higher pay to cushion themselves from the high cost of living.
Hundreds of workers in the aviation sector recently staged a strike demanding higher salaries while the Kenya National Union of Teachers (KNUT) has threatened to call for a national strike for higher allowances, including housing and medical.
