THE SOCIAL HEALTH INSURANCE BILL, 2023

Background

The Social Health Insurance Bill, 2023, is designed to implement Article 43(1)(a) of the Constitution of Kenya, which guarantees every citizen the right to the highest attainable standard of health. To achieve universal health coverage, the Bill moves Kenya away from the older National Health Insurance Fund (NHIF) system, establishing a modern social health insurance scheme with strong oversight and split specialized funds.

Key Amendments

• Establishment of the Social Health Authority: Created under Section 4, this corporate body replaces the NHIF Board and is tasked with managing the new healthcare funds, registering beneficiaries, and contracting empanelled health facilities.
• Repeal of the NHIF Act: Section 54 repeals the National Health Insurance Fund Act, 1998 (No. 9 of 1998).
• Application of the Insurance Act (Cap. 487): Under Section 52, provisions of the Insurance Act will apply to the claims administration of the Authority's services.
• Establishment of the Dispute Resolution Tribunal: Section 44 creates a five-member Tribunal headed by a chairperson qualified to be a High Court judge, to hear disputes and appeals arising from decisions made under the Act.

New Obligations

• Compulsory Registration: Every Kenyan citizen and non-Kenyan resident residing in the country for more than twelve months must register as a member of the Social Health Insurance Fund (Section 26).
• Compliance for Public Services: Section 26(5) demands that any individual dealing with or accessing public services from national or county government entities must produce proof of compliance and registration.
• Means-Tested Contributions: Under Section 27, households without salaried income must submit to a 'means testing instrument' to determine their annual contribution amount. Salaried households are subject to automatic payroll deductions.
• Full Digitization: Under Section 47, all registration, member identification, contribution payments, claims submissions, and settlements must be digitized through a secure and verifiable information system in compliance with the Data Protection Act, 2019.

Penalties

• Failure to Pay Contributions: Under Section 48(1), any person who fails to pay a statutory contribution without lawful excuse faces a fine of up to KSh 2 million, imprisonment for up to 3 years, or both.
• Misappropriation of Assets: Section 48(2) imposes a fine of up to KSh 10 million, imprisonment for up to 5 years, or both, for any person who misappropriates or misapplies Fund assets.
• Late Payments: Section 27(6) subjects anyone who fails to make their contribution on time to a monthly penalty of 2% of the unpaid amount.
• Fraudulent Health Claims: Under Section 48(5), any healthcare provider that alters or falsifies medical documents to defraud the Authority faces a fine of up to KSh 2 million, suspension, or de-registration.

Transitional Provisions

• Transfer of Assets: On the appointed day, all assets, liabilities, and property of the NHIF automatically vest in the new Social Health Authority.
• Winding Up of NHIF: The NHIF Board is given one year from the appointed day to wind up the existing fund.
• Staff Transfer: Employees of the former NHIF may apply for positions within the newly established Social Health Authority, with those not appointed eligible to retire or be redeployed within the wider public service.