National Health and Insurance Fund(NHIF) will from next month penalize 9.5 per cent on companies failing to remit or match their worker's monthly contributions on time.

The interest penalty is equal to the Central Bank of Kenya lending rate.

Samson Kuhora, the acting chief executive of NHIF, announced that the insurance will begin enforcing the new fine on May 1 to prevent employers from failing to make payments due before the ninth day of the following month.

The NHIF (Amendment) Act, 2022, which went into force in January of last year, includes the fine, but its implementation was postponed after businesses successfully opposed this requirement and its penalties in court for employment and labour relations.

The current base lending rate for CBK is 9.5 per cent, underscoring the severe penalties that await firms who fail to meet their NHIF commitments.

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The court froze implementation of the law and barred Health Cabinet Secretary from gazetting any regulations that would operationalise the amended law, temporarily halting efforts by the insurer to collect an estimated Sh31 billion from employers.

“The NHIF Act No. 9 of 1998 which was amended on January 10th 2022 highlights the revised penalty rate on late contributions. The effective date for the new penalty rate is May 1st 2023,” Mr Kuhora says in the notice.