Employees of the National Health Insurance Fund (NHIF) will have to reapply for jobs and be recruited on merit to serve the new fund that will replace the 57-year-old State corporation.
The Social Health Insurance Bill 2023, which seeks to dissolve the NHIF and create a Social Health Authority to manage three funds, states in its transitional clauses that the new authority will take over all NHIF assets, but will only absorb its staff on a merit basis.
NHIF employees who wish to work under the Social Health Authority, which will be responsible for the Primary Healthcare Fund, Healthcare Fund and Emergency, Chronic and Critical Illness Fund, will have to apply for jobs.
“The board of the Social Health Authority ... shall competitively recruit and appoint its staff ... subject to the approved staff establishment and on such terms and conditions of service as the board may determine,” the Bill reads in part. “Employees of the fund (NHIF) shall be eligible to apply for positions advertised by the board and may be considered for appointment if they are suitably qualified for the positions.”
In the transition, NHIF will be required to hand over its cash balances and all other assets to the Social Health Authority and will be wound up within one year of the date on which its successor becomes operational.
The NHIF has over 1,800 employees and it is not clear what the staffing levels of the three funds that will succeed it will be if the Bill becomes law.
The proposed law states that NHIF staff not appointed by the authority will either have to retire or be redeployed.
The proposal is likely to unsettle many NHIF employees who serve a fund that millions of Kenyans rely on for health care. Thanks to a sustained government campaign, more Kenyans have signed up to the national scheme, reaching 15.4 million members by the end of June last year.
NHIF has struggled with allegations of staff-driven fraud, with many members complaining of delays in the approval and payment of medical bills. There have also been complaints of under-authorisation, forcing members to pay out of pocket to top up hospital bills.
The Federation of Kenya Employers (FKE) last week urged the government to adhere to labour laws in the transition from NHIF to the new social security scheme, including the absorption of all current employees.
“The authority to absorb the staff of NHIF and follow the due process provided for in the applicable labour laws. On the appointed date, the staff of the Fund should be assumed to be the staff of the Authority without further assurance,” FKE said.
Health Cabinet Secretary Susan Nakhumicha said in mid-June that the State would conduct a lifestyle audit of all NHIF staff in a crackdown on staff-related fraud. Her comments followed the suspension of eight NHIF branch managers after they were accused of using illegal means to exploit the insured and the fund.
“We will be embarking on a comprehensive lifestyle audit of all NHIF staff. This is to ensure that every member of staff can explain their asset portfolio, which is inconsistent with their income,” Ms Nakhumicha said at the time.
This audit, as well as the government's desire for a fresh start in running the social security scheme, may work against the chances of some of the current NHIF staff making it into the new funds.
The government wants to use the three funds to run the universal health coverage (UHC) programme, which promises affordable healthcare for all Kenyans.
The State has proposed to increase NHIF contributions for formal sector workers from the current range of between Sh150 and Sh1,700 to 2.75 per cent of gross salary, subject to a maximum of Sh5,000. Contributions by informal sector workers will be household based and will vary according to income level.
The national and county governments are expected to pay premiums for households identified as vulnerable.
As it plans this, it also needs to address the problem of dormant members, many of whom are facing economic hardship. The fund collected Sh78.84 billion in premiums in the year ended June 2022 against a target of Sh90.57 billion.
In May, hospitals began turning away patients seeking treatment under NHIF cover over unpaid claims of at least Sh12 billion, highlighting the scheme’s dire financial situation.
The hospitals claimed that the arrears had been accumulating since last year, prompting the decision in a bid to unlock payments from the NHIF.
The Social Health Insurance Bill, 2023 is one of four State-sanctioned health bills that Majority Leader Kimani Ichung'wah has tabled in Parliament for debate and passage. The others are the Primary Healthcare Bill, 2023, the Digital Health Bill, 2023 and the Facility Improvement Financing Bill, 2023.
The Bills are the latest attempts by President William Ruto’s administration to overhaul NHIF and roll out UHC.
