Introduction

The Social Health Insurance Act, 2023 (SHIA) was assented on 19th October 2023 and was expected to come into effect on 22nd November 2023 but the implementation was halted due to a court petition. The High Court declared the Act unconstitutional but on 20th September 2024 the Court of Appeal stayed application of the High Court decision pending the determination of the substantive appeal. Effective 1st October 2024 the National Hospital Insurance Fund (NHIF) transitions to Social Health Insurance Fund (SHIF).

The Social Health Insurance Act of 2023 has established the Social Insurance Authority (SHA), which will assume all functions and operations previously managed by the National Health Insurance Fund (NHIF) Board. The SHIA introduces three distinct funds aimed at enhancing healthcare access and affordability.

These funds are:

  • The Primary Healthcare Fund- this is established under Section 20 of the Act focuses on procuring primary healthcare services from health facilities.
  • The Social Health Insurance Fund (SHIF)- this is established under Section 25 of the Act. The SHIF is intended to replace the current National Hospital Insurance Fund (NHIF). It will pool contributions from formal and informal sector workers and provide coverage for a wide range of healthcare services, including outpatient, inpatient, and specialized care.
  • The Emergency, Chronic and Critical Illness Fund – this is established under Section 28 of the Act and covers costs related to managing chronic illnesses after depletion of the social health insurance cover and funds emergency treatment.

SHIF Eligibility and Registration

Employers and individuals are required to register for SHIF through the SHA website or by using a USSD code, or by visiting a nearby Huduma Center. Persons who are required to register for SHIF are highlighted below:

  • Every Kenyan is required to register as a member of SHIF;
  • Any person who is not Kenyan but resides in Kenya for more than twelve months is also eligible to register.
  • A child who is born after the Act has taken effect shall register at birth.
  • A non-Kenyan who is in Kenya for a period less than twelve months shall be expected to obtain a travel health insurance cover as may be designated by the Cabinet Secretary.
  • Any person seeking to access public services from the national and county government must show proof of compliance and contribution.

Persons who had not registered with the Social Health Authority by 30th September 2024 but were registered with NHIF are now being automatically migrated to SHA by the Ministry of Health.

SHIF Contributions

The SHIF shall be funded through contributions under the Act, gifts, grants, innovative financing mechanisms or donations and monies appropriated by the National Assembly for indigent and vulnerable persons.  The methods of contribution are highlighted below;

  • Employed Kenyans will be expected to contribute 2.75% of their gross pay with a minimum contribution of Kshs 300 per month with no maximum contribution. Employers are to remit the SHIF contribution by the ninth day of the subsequent month.
  • Persons who do not derive their income from employment will now be required to make contributions on an annual basis in proportion of their household income as determined by the means testing instrument prescribed by the Act. The means testing instrument are parameters that encompasses the socio-economic aspects of a person on their ability to pay social health insurance premium.

A comparison of the contribution between SHIF and NHIF is highlighted below

Gross Salary (Kshs) Current NHIF Contribution SHIF Contribution
20,000 750 550
50,000 1,250 1,375
100,000 1,700 2,750
250,000 1,700 6,875
500,000 1,700 13,750
1000,000 1,700 27,500

 

Payment Deadlines

Effective 1st October 2024, the National Health Insurance Fund (NHIF) will be transitioned to the Social Health Authority (SHA). The payment deadlines are as follows;

  • Payments received on or before 9th October 2024 will be credited to NHIF.
  • Payments received from 9th November 2024 onwards will be credited to SHA.

Offenses and penalties

Offenses and penalties under the Social Health Insurance Act include;

  • Anyone who fails to pay a contribution for any period by the due date will be subject to a penalty of 2% of the unpaid contribution amount for each period the payment remains overdue, in addition to the total annual contributions.
  • Employers who fail to pay contributions to the Social Health Insurance Fund without a lawful excuse face a fine of up to Kshs 2 million, imprisonment for up to three years, or both.
  • Impersonating another person to obtain benefits is an offence and one will be liable to a fine not exceeding Kshs 1 million, imprisonment up to three years, or both.
  • Healthcare providers or facilities that falsify information to defraud the Authority are liable to a fine not exceeding Kshs 2 million and possible removal from the list of registered providers.

These offenses are designed to maintain the integrity of the Social Health Insurance system and penalize fraudulent actions.

Conclusion

The introduction of the Social Health Insurance Fund (SHIF) in Kenya is a significant development in the country’s health system. The SHIF is intended to provide solutions to the existing gaps in the current National Health Insurance Fund (NHIF) and increase health insurance coverage. By broadening coverage and lowering costs, SHIF aims to provide comprehensive healthcare to all Kenyans.

Please do not hesitate to contact us should you require further clarification on the SHIF.