It is now official: Every household in Kenya will pay 2.75 per cent of their monthly income to the newly created Social Health Insurance Fund (SHIF), following the publication of regulations to operationalise the new health laws.
The government aims to collect over Sh57 billion a year in mandatory contributions to the Social Health Insurance Fund from Kenyans working in the informal sector.
The Social Health Insurance (General) Regulations, 2023, are meant to perationalise the Social Health Insurance Fund (Act), which was temporarily stopped by the courts on Monday.
The Act, whose implementation was halted by a conservatory order pending the hearing of a case challenging its constitutionality, did not specify how much Kenyans would be charged under the new scheme, which replaces the National Health Insurance Fund.
The regulations will now be sent to Parliament for approval before they come into force.
The injunction will remain in place until February 7, 2024.
With the injunction in place, even if the National Assembly approves the regulations as they are, the government will have to wait until then to know whether it can start the deductions.
According to the Social Health Insurance (General) Regulations, 2023, that were issued by Health Cabinet Secretary Susan Nakhumicha, the amount payable each month shall not be less than Sh300 per month. However, for those who are not employed, the amount is paid annually.
This means that an unemployed person has to pay at least Sh3,600 every year, putting a heavy burden on the many hustlers who have to live from hand to mouth.
The Kenya Demographic Health Survey 2022 showed that the informal sector employed about 16 million people in 2022, with the majority of 9.32 million working in wholesale and retail trade, hotels and restaurants, while 3.18 million worked in manufacturing.
The regulations also indicated that every Kenyan, whether employed or not, will pay a 2.75 per cent rate deduction.
“A household whose income is not derived from salaried employment shall pay an annual contribution to the Social Health Insurance Fund at a rate of 2.75 per cent of the proportion of household income as determined by the means testing instrument.
The regulations add: “A household whose income is derived from salaried employment shall pay a monthly statutory deduction contribution to the Social Health Insurance Fund at a rate of 2.75 per cent of the gross salary or wage of the household by the ninth day of each month.”
The regulations also state that the relevant ministries shall provide premium financing to non-salaried persons to enable them to pay their annual contributions within the intervals in which their income becomes available.
“The Social Health Authority in collaboration with the Ministry responsible for cooperatives and micro, small and medium enterprises development and other financing institutions, shall provide premium financing to non-salaried persons to enable them (to) pay their annual contributions within the intervals under which their income becomes available,” the regulations state.