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The Employment and Labour Relations Court at Nairobi (the Court) on 22 April 2022 temporarily suspended the enforcement of the amendments to the National Health Insurance Fund Act, 1998 (the Principal Act) in a petition, by the Federation of Kenya Employers v National Health Insurance Fund Management Board & Cabinet Secretary Ministry of Health and 3 others, challenging the constitutionality of the amendments (the Petition). These amendments were introduced through the National Health Insurance Fund (Amendment) Act No. 1 of 2022 (the Amendment Act). The Court also restrained the Cabinet Secretary from gazetting any regulations that would operationalise the amendments to the Principal Act (notably, there are 5 sets of regulations to the Act).
The amendments to the Principal Act introduced a requirement for employers to make a matching contribution to the fund established under the Principal Act, equal to that which their employee is liable to contribute under the Principal Act and not to deduct the same from the salary or remuneration of the employee.
Other provisions of the Amendment Act that were temporarily suspended include (i) the requirement for exhaustion of private medical insurance cover before the National Health Insurance Fund (NHIF) cover can be used; and (ii) the requirement that employers must pay for a private medical insurance cover for employees that guarantees benefits that are equal to or better than benefits under the Principal Act in order to be exempted from making matching NHIF contributions.
The Petition, lodged by the Federation of Kenya Employers, challenged the amendments to the Principal Act as a whole on the basis that sufficient public participation was not conducted prior to enactment, the amendment provisions violate employers’ rights to fair administrative action, property and equality and freedom from discrimination among other grounds.
In considering an application to temporarily suspend the amendments to the Principal Act (the Application), the Honourable Justice Maureen Onyango was persuaded that the Application was urgent and deserving of interim relief to protect employers from the effects of the impugned law pending hearing and determination of the Application.
The court orders have granted a temporary reprieve to Kenyan employers, who would have otherwise been burdened with additional costs of employment under the current challenging economic landscape. It is arguable that the effect of the disputed provisions would shift the burden of providing universal healthcare from the government to the private sector.
Should you have any questions regarding the information in this legal alert, please do not hesitate to contact Faith M. Macharia.
1. Edel Ouma – Principal Associate
2. Ikoha Muhindi – Principal Associate
3. Elly Obegi – Associate