The National Hospital Insurance Fund (NHIF) has revived a controversial law seeking to have workers earning more than KES 100,000 per month pay more in monthly contributions.

The NHIF republished regulations that were rejected by Parliament before the August 8 General Election and wants workers earning more than KES 100,000 to pay 1.7 per cent of their gross salary to the fund.

With the backing of President William Ruto, the fund is seeking community input on the new regulations ahead of parliamentary approval for the new rates.

The new premium is a shift from the present model, where employees earning over KES 100,000 pay a fixed monthly contribution of KES 1,700 to the NHIF.

Contributions of workers earning KES 200,000 will double to KES 3,400 if the regulations are adopted, while the burden on those on KES 500,000 will increase five times to KES 8,500 monthly.

Consequently, employers who have not provided a superior private insurance cover will be expected to match the workers’ monthly contributions to the NHIF, a further hit to firms that are yet to recover from the coronavirus-induced slump that triggered job cuts, hiring freezes and business closures.

The upward review of NHIF contributions is likely to encounter resistance from employers and workers already strained by inflationary pressures.

Kenya’s inflation is at a multi-year high of 9.2 per cent on the back of a jump in the price of essential items like food, fuel and soap, squeezing household budgets and demand for goods and services.

Sourced from Kenyan wall street

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