The Social Health Authority (SHA) has issued an official notice to all employers regarding compliance with the new remittance regulations outlined in the Social Health Insurance Act (SHI Act No. 16 of 2023).
The Act, enacted on October 19, 2023, will come into full effect on October 1, 2024, replacing the National Health Insurance Fund (NHIF) system that has been in place since 1998. This marks a significant change in how health insurance contributions are to be handled by employers in Kenya.
The SHA’s notice reminds employers that “effective 1st October 2024, the old NHIF approved benefit packages and rates shall cease to apply” as the new SHA Benefits and Tariffs take effect. Under the SHI Act, employers are mandated to deduct 2.75% of employees’ gross salaries or wages as contributions to the Social Health Insurance Fund (SHIF). These contributions must be remitted monthly, with the deadline for submission being the ninth day of each month, starting with October 2024 payrolls.
According to Section 27(2)(a) of the Act, the deductions “shall be deducted monthly, by the employer at the rate prescribed under the Act.” Employers who fail to comply with these regulations may face penalties. The SHA also warns that under Section 48(1), any employer who “fails without lawful excuse to pay to the Social Health Insurance Fund within the period prescribed by the Act” or knowingly makes “any false statement or representation” may be subject to legal consequences.
The notice provides detailed instructions on how employers are to remit contributions, with payments directed to specified SHA bank accounts, including KCB, Co-operative Bank, Sidian Bank, and others. The SHA emphasizes that employers must “ensure compliance with the SHI Act No.16 of 2023 and the Regulations on remittance of contributions.”
