THE SHIFT FROM NHIF TO SHIF. WHAT DOES IT MEAN?
Introduction
The transition from the National Hospital Insurance Fund (NHIF) to the Social Health Insurance Fund (SHIF) represents a significant policy shift in Kenya’s healthcare system, aiming to establish a more inclusive, Universal Health Coverage (UHC) structure.
To realize this goal, the National Assembly passed the Social Health Authority Act, Number 16 of 2023 (SHA), ushering in a new era of healthcare in Kenya. Starting 1st October 2024, the NHIF will officially transition to SHA, and as a result, all Kenyan citizens and their dependents are legally required to register as SHA members.
What are the key changes and features of SHIF?
- Wider Coverage & Inclusivity – Unlike the NHIF, which primarily targeted the formal sector and employed individuals, SHIF aims to provide health insurance for every citizen, including those in the informal sector and vulnerable groups who have been historically underserved.
- Revised Premiums & Contributions – SHIF is expected to introduce a tiered contribution system that factors in the income levels of contributors. This system will replace the flat rate under the NHIF, making the insurance model more progressive and equitable.
- Comprehensive Benefits Package – The SHIF will expand its benefits to cover a broader spectrum of health services, including outpatient services, chronic disease management, and maternal and child health which aligns with the Universal Health Coverage goals.
What are the deadlines to note?
The following are some of the important dates that each employer needs to note to guide the transition.
- The deadline for the admission date under NHIF will be on the 30th of September 2024.
- The SHA commences on the 1st of October 2024.
- Payments received on or before 9th October 2024, will be credited to the NHIF.
- Payments received from the 9th November 2024 onwards, will be credited to the SHA.
What is the SHA Contribution Rate?
Pursuant to Section 10 of the NHIF Regulations, 2023, a contributor in salaried employment is required to pay a standard contribution rate of 2.75% of the gross monthly income. This contribution is made by the employee only.
Under this new regime, the minimum monthly contribution has come down to Ksh. 300 from Ksh. 500 under the NHIF. The new SHIF benefits package encompasses a comprehensive range of healthcare services including rehabilitation services, screening for prevalent diseases, provision of assistive devices, maternity and child health services, oncology treatments, medical imaging services, outpatient medical care, end-of-life services, surgical procedures, specialized pharmacy benefits, inpatient and critical care, accident and emergency services, optical care, mental health support, advanced diagnostic services, renal care, overseas treatment options, and dental care.
What next for employers and employees?
- Employers are now required to register all employees and dependents under the SHA, ensuring full compliance to avoid penalties. The registration is to be done via the SHA Employer portal where the employers register their employees.
- The monthly contribution rate for employees under the SHA will be 2.75% of their gross monthly income, with no maximum cap. This replaces the current NHIF system, which is based on salary brackets ranging from Kshs. 750 to Kshs. 1,700.
- Employers will face heightened reporting requirements under the SHA framework, necessitating the need for regular audits and compliance checks. Therefore, employers must regularly update the SHA Employer Portal with accurate employee details and contributions, placing greater emphasis on record-keeping and timely remittances.
- Employers who fail to remit contributions on or before the due date will be liable to a penalty of two percent of the outstanding amount for each period the contribution remains unpaid, in addition to the total annual contributions. Additionally, any employer who fails to pay contributions as required or makes authorized deductions from employees will be liable to a fine not exceeding KES 2 million, imprisonment for up to three years, or both.
Transitioning from NHIF to SHIF: A New Era in Universal Healthcare
In conclusion, the transition from NHIF to SHIF marks a significant milestone in Kenya’s healthcare landscape, aimed at enhancing accessibility, equity, and quality of healthcare for all citizens. With a broadened benefits package and new compliance requirements, both employers and employees must familiarize themselves with the updated regulations and ensure timely registration to leverage the comprehensive healthcare services offered. As the Social Health Insurance Fund takes root, embracing this change will be pivotal in achieving the vision of universal healthcare coverage in Kenya.
“The information provided in this article is intended for general legal advice and does not constitute legal advice for any specific transaction or case. Since each transaction presents a unique legal context, it is advisable to retain a legal adviser for specific transactions.”
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