Are you ready for SHIF?
Greetings from RWK & Associates!
We are pleased to update you on significant developments in Kenya's healthcare landscape. The government has enacted the Social Health Insurance Act, No. 16 of 2023 (SHIFA), aimed at enhancing access to healthcare through the Social Health Insurance Fund (SHIF). SHIFA was assented to on October 19, 2023, and came into force on November 22, 2023, marking a pivotal step towards achieving universal health coverage in Kenya.
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SHIF and Its Impact
The Social Health Insurance Fund (SHIF) established under SHIFA is a transformative initiative designed to provide comprehensive health insurance coverage for all Kenyans. SHIF aims to replace the National Health Insurance Fund (NHIF), streamlining healthcare funding and ensuring more equitable access to medical services.
With SHIFA, the Social Health Authority will oversee the functions previously managed by NHIF, extending its reach to cover primary healthcare services through the Primary Health Fund (PHF) and addressing emergency, chronic, and critical illnesses via the Emergency, Chronic, and Critical Illness Fund (ECCIF). This structured approach ensures that healthcare is accessible and affordable for every Kenyan household.
Key Dates and Contribution Rates
SHIFA mandates the registration of all Kenyan residents and non-residents living in Kenya for over twelve months. Contributions to SHIF are structured to be fair and sustainable. For salaried employees, a statutory monthly deduction of 2.75% from wages or salary is proposed, with a minimum contribution of KES 300.
Households without salaried income will contribute annually based on a means-tested household income, ensuring contributions are proportional to their financial capacity. Additionally, financial assistance for those in need will be provided by the government, determined through a comprehensive means testing instrument.
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Transition from NHIF and ECCIF Benefits
As SHIFA becomes fully operational, SHIF will take over all functions of NHIF. All benefits schemes and packages offered by NHIF will transition to SHIF until existing contracts expire. This transition ensures continuity of coverage for all beneficiaries.
The establishment of the ECCIF further enhances the healthcare safety net by covering costs associated with chronic illnesses and emergencies once SHIF benefits are exhausted. Funded through various sources including government appropriations, grants, and donations, ECCIF ensures that no beneficiary is left without critical medical coverage.
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The enactment of SHIFA and the subsequent establishment of SHIF, PHF, and ECCIF represent a monumental leap towards achieving comprehensive medical coverage in Kenya. These initiatives promise to address gaps left by NHIF, providing a robust framework for sustainable and equitable healthcare access. As the draft regulations undergo public scrutiny and await final approval, we anticipate significant improvements in the healthcare system that will benefit all residents of Kenya. We at RWK & Associates will continue to monitor these developments and keep you informed on the progress and implications of these regulatory changes.
If you'd like to talk to a tax and finance expert, you can click here to book a free consultation appointment.
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