The National Health Insurance Fund (NHIF) is on the spot over delays by private companies to settle over Sh4.8 billion in claims.
The claims are owed to both retired and serving government employees who have died or have been injured while on duty.
The NHIF procured the services from commercial insurance companies to provide cover to public servants who are also members of the Public Service Superannuation Scheme (PSSS).
The members covered under the fund include the National Police Service (NPS), Teachers Service Commission (TSC), Civil Servants, National Youth Service and all judges, excluding the Chief Justice and deputy Chief Justice.
Payment of death and disability insurance claims is a statutory obligation under the PSSS Act of 2013. While some of the companies have had their premiums fully settled by the State, the National Treasury is yet to release Sh7 billion in premiums to the NHIF to pay private insurance companies to undertake their statutory obligations.
Curiously, some of the insurance companies that are yet to settle claims despite their premiums having been paid, have continued to bid for tenders floated by the NHIF.
Over 5,000 public servants have died and over 12,000 injured or disabled, but are yet to be compensated. In a demand letter dated May 22, 2023, the affected employees and their families have given the PSSS fund 60 days to pay the claims or face a lawsuit.
The PSSS fund is administered by the PSSS board of trustees that draws representation from TSC, Judicial Service Commission (JSC), NPS and PSC.
The demand letter specifically makes reference to public servants who have died or been disabled since 2012 when the PSSS Act was enacted and from 2021 to date.
Documents Nation has seen show that over 4,000 teachers, 562 civil servants, 650 police officers and several judges who were active pension contributors had died as at 2021, but their kin are yet to be compensated.
According to a letter by NHIF written to the National Treasury on February 9, 2023, it costs the government Sh4.5 million to settle an average death benefit claim and Sh3.3 million on a Group Personal Accident (GPA) or Wiba. This means that of the 5,212 deaths, the government owes approximately Sh23.45 billion worth of death in service benefits.
The documents further indicate that over 12,500 injuries and disability incidents have since occurred and been documented yet the injured public servants have not received over Sh41.250 billion of their injury compensations to date.
The insurance covers were procured from the NHIF notwithstanding the fact that it is not registered as an insurance company as per the Insurance Act and that NHIF Act does not allow it to act as a life insurance company.
NHIF would go on to contract commercial insurance companies to provide the cover and retain a five per cent administration fee, in what is called offloading of risk, which requires an authorisation from the Insurance Regulatory Authority (IRA).