Court allows NHIF to implement new rates

The national health insurer can now implement the new workers’ contributions from next month.

This was after the Industrial Court declined to suspend the enforcement of the increased rates published in the Kenya Gazette in June and which should have taken effect on September 1.

The Central Organisation of Trade Unions (Cotu) through lawyer J.A. Guserwa had moved to court to challenge the implementation of the revised rates, arguing that workers had not been consulted.

Mr Chacha Odera and Mr Paul Chege appeared for NHIF while the Federation of Kenya Employers (FKE) was represented by Ms Maureen Onyango.

The worker’s body had claimed that without observing industrial relations and requirements of section 5(e) of the NHIF Act, the board issued a notice on July 2 announcing the new rates to be effected against workers’ salaries against their will.

But Industrial Court judge James Rika said the proposed premiums would benefit members and assist the government achieve universal healthcare.

Cotu had alleged that the health insurer had neither shown how an increase of between 500 and 600 per cent was arrived at nor demonstrated the benefits derived from the increase.

The workers’ body also argued that NHIF had not shown that it had the capacity to provide the services.

In a ruling delivered in Mombasa, Mr Justice Rika, concurred with Mr Odera and Mr Chege and noted that from the documents produced in court, it was evident that both Cotu and FKE were involved in the consultations over the past decade.

He said the scheme did not violate the Employment Act of 2007, adding that the NHIF Act empowers the minister to make regulations, including those on contributions.

The revised rates will see Sh2,000 being deducted monthly from Kenyans who earn over Sh100,000, translating into a 525 per cent rise.

Those earning between Sh50,000 and Sh99,000 will contribute Sh1,500 monthly, a 368.7 per cent increase, while those earning Sh5,999 and less will pay Sh150.

Currently, all workers pay a mandatory monthly premium of Sh320.

The targeted annual contribution is Sh19.4 billion, while the benefit payout will be Sh15.5 billion or 80 per cent of the total contributions.

Meanwhile Cotu and FKE have instructed their lawyers to move to the High Court immediately to seek a judicial review of the ruling.

Secretary-general Francis Atwoli said Cotu would battle it out to the end to safeguard the interests of workers.