Insurers push back on proposed NHIF amendments


The NHIF building in Nairobi. Photo/FILE
The NHIF building in Nairobi. Photo/FILE

In Summary

  • In a statement on Wednesday, the underwriters for instance warn the requirement for employers to match employee contributions to the National Hospital Insurance Fund (NHIF) will serve to raise the cost of labor in firms.
  • AKI further fears employers who have presently supplemented employee NHIF covers with private schemes may cease to do so after the adoption of new amendments dealing a blow to the insurance industry which contributes to a mere two per cent of GDP.
  • AKI wants employers with the capacity to sponsor employees for private medical covers to be exempt of amendments matching up contributions into the fund.

Local insurers represented by the umbrella Association of Kenyan Insurers (AKI) have pushed back on proposed amendments to the NHIF Act.

In a statement on Wednesday, the underwriters for instance warn the requirement for employers to match employee contributions to the National Hospital Insurance Fund (NHIF) will serve to raise the cost of labor in firms.

“The increased cost of labor will lead to more employee layoffs further aggravating the already bad unemployment situation in the country,” AKI stated.

“High labour costs will make Kenya unattractive to foreign investors especially in labor intensive industries such as agriculture and hospitality services. Investors may opt to move to other countries where the cost of labor is more manageable.”

AKI further fears employers who have presently supplemented employee NHIF covers with private schemes may cease to do so after the adoption of new amendments dealing a blow to the insurance industry which contributes to a mere two per cent of Gross Domestic Product (GDP).

Moreover, the underwriters see greater costs of providing private medical insurance from the proposal to have the private insurer meeting claims first before the NHIF does.

AKI wants employers with the capacity to sponsor employees for private medical covers to be exempt of amendments matching up contributions into the fund.

Additionally, the insurers wants NHIF to provide cover for primary health care in line with global practice with private insurance only serving to complement payments from the fund.

Moreover, AKI have called for the overhaul of the NHIF in line with the recommendations of a 2019 report by a government appointed task-force.

The domestic insurers join a growing list of parties to push back against the proposals including the Federation of Kenya Employers (FKE) and the Central Organisation of Trade Unions (COTU).

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