Nairobi MCAs have raised questions over the Sh2.5 billion medical insurance contract awarded to APA Insurance, seeking to establish why the county moved to a new scheme less than a year after enrolling its employees under the Social Health Authority.
Members of the County Assembly’s Labour and Social Welfare Committee questioned county officials over the procurement process and the circumstances that led to the decision to replace the SHA arrangement.
The committee, chaired by Kayole North MCA Wachira Wa Iria, is seeking answers on whether the new arrangement offers significantly better benefits to the county’s more than 18,000 employees to justify the additional expenditure.
Nairobi enrolled its staff under SHA last December at a cost of about Sh1.3 billion after terminating its medical insurance contract with Jubilee Insurance.
Nairobi Governor Johnson Sakaja at his office in Nairobi.
Photo credit: File | Nation Media Group
The new APA arrangement is estimated to cost Sh2.5 billion, representing an increase of about Sh1.2 billion from the previous arrangement.
The questions came as the committee examined tender NCC/PSM/T/001/2026-2027, which was advertised as an open tender and required bidders to provide Sh40 million in tender security.
Four healthcare insurance companies submitted bids for the contract, with APA quoting approximately Sh2.5 billion.
Fidelity Shield Insurance quoted Sh2.8 billion, AAR Insurance Kenya submitted a bid of about Sh3.1 billion while First Assurance Company Limited quoted approximately Sh2.1 billion.
The MCAs questioned the evaluation process, including why APA was selected despite First Assurance submitting a lower financial bid.
They also sought details of the technical and financial scores awarded to the bidders and whether the procurement process provided a level playing field for all the companies that participated.
Uthiru MCA Peter Maina questioned the decision by the county to move its employees to a private medical insurance scheme, saying staff had already been enrolled under SHA and the arrangement was operational.
“We knew that all the employees at City Hall were enrolled in SHA and everything was going on well. We need to know at what point the county made the decision to migrate to the new cover and abandoned what we had in place, yet the county is struggling financially,” he said.
Mr Wachira, who chaired the committee hearings, said the county needed to demonstrate that the new arrangement would provide adequate medical cover for its employees while ensuring value for money.
“There is a need for assurance for our staff and value for money. There is still a huge debt that we are struggling with SHA and it needs to be cleared,” he said.
Chief Officer for Human Resource Janet Opiata defended the latest procurement, telling the committee that APA emerged successful after meeting all the requirements and offering what the county considered a better deal.
Ms Opiata maintained that the insurer was selected on the basis of the outcome of the procurement process and the benefits it offered, rather than through a predetermined decision.
“They met all the requirements and we were following up to make sure that our staff are getting the best benefits and that they can walk into a hospital facility and get treatment without any struggle,” she said.
APA's Director of Health Business David Mumo also appeared before the committee to respond to questions surrounding the contract and the proposed administration of the scheme.
The assembly committee is expected to scrutinise the tender documents, evaluation report, reasons for the selection of APA and the terms of the resulting contract.
At the centre of the inquiry is also the transition from SHA, with legislators questioning what informed the decision to abandon the arrangement after the county had already committed more than Sh1 billion to it.
County officials struggled to explain the transition arrangements and the obligations arising from the previous scheme, with the county still owing SHA about Sh800 million.
The outstanding bill has raised further concerns among the MCAs, who warned that changes in medical insurance arrangements could leave the county accumulating liabilities while entering into new contracts.
The legislators also questioned whether the new APA contract provides substantially expanded medical benefits to employees and their dependants compared with the SHA arrangement.
With the county workforce standing at more than 18,000 employees, the committee sought clarity on the number of principal members and dependants covered under the new scheme and the cost implications of boarding them.
Another issue that came under scrutiny was the decision to use M-Tiba as the third-party administrator of the scheme.
The MCAs questioned why the county had retained a digital health platform that had also been used under the previous Jubilee arrangement, despite complaints and challenges associated with its administration.
M-Tiba is a digital health platform used by insurance schemes to connect members to healthcare providers and manage medical benefits.
The committee's inquiry comes against the backdrop of previous disputes over Nairobi County's procurement of employee medical insurance. In one such case, the county faced a challenge over Tender No. NCC/PSM/T/001/2024-2025, covering comprehensive medical insurance, group life and last expense cover.
The contract was valued at Sh1.495 billion, with the Public Procurement Administrative Review Board dismissing a request for review and directing the county to proceed with the procurement process.
