Insurers oppose reforms on NHIF contributions

Insurers have opposed proposals in a new Bill that will require employers to match workers’ monthly contributions to the National Hospital Insurance Fund (NHIF).

The Association of Kenya Insurers (AKI) has warned that compelling employers to match the contributions to the public health insurer will increase unemployment rates as employers will prefer casual workers so as to dodge the top up contributions.

Doubling the Sh1,700 that top contributors make to the fund ranks high on the list of targeted changes to the NHIF Act, which is currently before the House for debate.

The plan is to have the workers continue paying same amounts and employers matching in a structure modelled on the National Social Security Fund (NSSF).

This will see employers pay at least Sh25 billion to the NHIF, an added burden to companies that are yet to recover from coronavirus-induced slump, which triggered job cuts, hiring freezes and business closures, insurers said.

“Other employers who have organised for a private medical cover for their employees should be exempted from the top ups,” Tom Gichuhi, the AKI Chief Executive, told Parliament.

“This will increase the level of unemployment as employers may prefer casual workers so as to avoid the top up contributions which would generally increase labour costs,” says the memorandum that also contains the views of the Association of Insurance Brokers of Kenya (AIBK).

In a memorandum to the Clerk of the Senate Jeremiah Nyegenye dated October 27, 2021 Mr Gichuhi said the proposals contained in the NHIF (Amendment) Bill, 2021 overlook the fact that some employers provide medical insurance for their staff.