NHIF, NSSF changes need sober debate

The call for dialogue by employers in the dispute between the National Social Security Fund (NSSF) and National Hospital Insurance Fund (NHIF) contribution rates should be taken seriously. Social security provides the much-needed income on which workers can build on and plan for their retirement.

It also provides valuable protection to workers who become disabled and families that lose breadwinners. On the other hand, health insurance protects Kenyans from unexpected high medical costs and has saved lives.

Though noble, the push for an increase in the contributions may have come at the wrong time. Many Kenyans are confronted with the effects of a recession occasioned by the Covid-19 and the war between Russia and Ukraine.  The net effect is decreased spending and a slump in the growth of key sectors of the economy.Therefore, when making some policy statements such as  the ongoing call for changes to the NSSF and NHIF contribution rates, there should be a health conversation between stakeholders to protect workers who are the likely casualties.

Already, the social protection fund has appealed the High Court’s declaration that some sections of the NSSF Act 2013 were unconstitutional even as the government argued that the current rates are not sustainable. As the Federation of Kenya Employers (FKE) rightly puts it, these changes will be painful to both employees and employers if the proposal to increase NSSF monthly contribution to six per cent from the current Sh200 flat rate is actualised. Employers  have even asked for the six per cent increase to be spread across five years to relieve the employers in financial distress.

On NHIF, employers are concerned that the draft law lacks clarity on what the deductions will be applied to, what the insurer will cover and the process of exemption. These are important questions which cannot be ignored.

Employers further say the NHIF proposals for them to match workers’ contributions will wreak their wage bill and capacity to create and sustain employment.Workers are currently overburdened by the many taxes at a time when salary increments have been frozen, coupled with high inflation.It is noteworthy that the Act will give the NHIF board absolute powers to review rates every two years without the involvement of employers.

Giving the insurer such sweeping authority raises legitimate concerns. It must,however, be emphasized that the welfare of the workers as well as their families should be central to any solution. 

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