The court determines that employers are not required to contribute to the NHIF on behalf of their employees.
The court prevented the application of a rule that would have required companies to make matching contributions for their employees, saving them from having to pay the National Health Insurance Fund (NHIF) an estimated Sh31 billion.
Peter Kamunyo, the chief executive of NHIF, revealed the information to parliamentarians regarding the Employment and Labour Relations Court's decision.
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The court determines that employers are not required to contribute to the NHIF on behalf of their employees.
The court prevented the application of a rule that would have required companies to make matching contributions for their employees, saving them from having to pay the National Health Insurance Fund (NHIF) an estimated Sh31 billion.
Peter Kamunyo, the chief executive of NHIF, revealed the information to parliamentarians regarding the Employment and Labour Relations Court's decision.
"However, a court order prohibiting the application of the new Act was served on us. We want your assistance in passing proposed rules so that the law can take effect, Dr Kamunyo said in a statement to the National Assembly committee on health.
Employers had predicted that the change would negatively impact hiring and operational costs considerably.
The court halted law enforcement and prohibited the Health Cabinet Secretary from gazetting any regulations that would put the modified law into effect.
According to preliminary financial statistics for the 2021–22 fiscal year, NHIF collected Sh80.43 billion in premiums, a 29.4% increase from the previous year.
The increase in premiums is 31.9 per cent in medical payouts to Sh71.34 billion during the same time frame.
Before passing the bill, the Federation of Kenya Employers (FKE) had complained that NHIF had not engaged in public engagement as required by the Constitution and that the modification also infringed on the rights of employers to appropriate administrative action.
In line with the government's strategy to offer all Kenyans access to inexpensive, high-quality healthcare, NHIF will implement Universal Health Care (UHC).
Adult membership is now necessary by the NHIF (Amendment) Act, 2022, and premiums for households with vulnerable members will be covered by the federal and local governments.
In a further effort to enhance its financing pool in anticipation of rising medical claims and UHC reimbursements, the NHIF aims to set contributions at 1.7 per cent of the monthly payment for all employees earning Sh100,000.
The proposed system differs from the existing one, which requires employees earning more than Sh100,000 to make a fixed Sh1,700 monthly contribution to the state insurance.
The program's sustainability and ability to adequately provide inexpensive, high-quality healthcare, especially for low-income individuals, depend on increased financing.
A surge in medical claims nearly matching the rise in premiums collected has prompted the push to match contributions and raise the rate for high incomes.
Before the establishment of UHC, legislative modifications were in place due to NHIF's ongoing battle with revenue leakages, which cost the fund between 10 and 20 per cent of its total yearly revenues.
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