A lawsuit challenging the National Hospital Insurance Fund’s (NHIF) new law requiring employers to match the contributions of their employees will be determined by an expanded bench of at least three judges.
The suit filed by the Federation of Kenya Employers (FKE) has been referred to Chief Justice Martha Koome for appointment of the judges.
Justice Monicah Mbaru said the suit raises substantial issues of law that need to be addressed by an enlarged bench.
FKE challenged the implementation of the National Hospital Insurance Fund (Amendment) Act (2022) on grounds that employers will be overburdened with additional costs of employment as a result of the monetary contributions towards the national health insurer.
Their opposition to the amended Act is based on arguments that it introduced a requirement for exhaustion of private medical insurance cover before the NHIF cover can be used.
Employers are also opposed to the amended Act for introducing a requirement for employers to match contributions by employees, which they say represents a threat of violation of the FKE and its member’s right to property.
Another contested legal requirement in the amended law is an obligation for employers to make a matching contribution to the fund equal to that which the employee is liable to contribute under the Act.
Also contested by the employers is the requirement that, to be exempted from making matching NHIF contributions, employers must pay for a private medical insurance cover for employees that guarantees benefits that are equal to or better than the benefits under the Act.
FKE adds that the private sector, including members of the lobby group, are already required to pay taxes to the public sector that are in turn required to offer healthcare as a right under the Constitution
In restating that employers will be overburdened, FKE explained that they are required, under Section 34 of the Employment Act, 2007, to ensure the provision of sufficient and proper medicine and medical attendance for employees during illness.
“The amendments, therefore, burden the petitioner and its members with taxes that will be used to cover the public sector, paying matching contributions for their own employees, and all while ensuring that they offer medical assistance as required under the Employment Act, 2007,” it says.
“The petitioner and its members have a legitimate expectation that the burden of health policy shall not be shifted from the government to the private sector,” it adds.
The lobby group challenged the amendments to the Act on the basis that sufficient public participation was not conducted prior to enactment.
In addition, they argue that the amendment provisions violate employers' right to property, equality under the law, economic and social rights, and right to fair administrative action.
FKE says the amended Act affects the rights of Kenyans across all the 47 counties who are either employers or employees.
Referring the casefile to the Chief Justice for empanelment of the bench, Justice Mbaru said: “On the challenge to the constitutionality of the NHIF (Amendment) Act, 2022 and its application together with other statutes, particularly the Employment Act, 2007, this calls for an expanded panel of judges of more than one.”
The court has barred the Cabinet secretary for Health from gazetting any regulations that would operationalise the amendments to the Act, which was assented into law by former President Uhuru Kenyatta on January 10, 2022.
