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Employers want dialogue in NHIF, NSSF proposals

Monday, November 28th, 2022 07:20 | By
Evacuation plan rescues thousands of accident victims, says NHIF boss
National Hospital Insurance Fund headquarters on Ngong Road, Nairobi. Photo/PD/FILE

Employers want the government to extensively engage key stakeholders regarding plans to increase the National Social Security Fund (NSSF) and National Hospital Insurance Fund (NHIF) contribution rates.

This after NSSF appealed the High Court’s declaration that some sections of the NSSF Act 2013 were unconstitutional, even as the government continued with the push, terming the current rates are unsustainable.

The Federation of Kenya Employers (FKE) Executive Director Jacqueline Mugo said the proposal to increase NSFF monthly contribution to six per cent from the current Sh200 flat rate will hit both employers and workers who are already burdened by the high cost of living.

The federation instead wants the 6 per cent increase to be spread aout to ease pain. “FKE proposed that the 6 per cent enhancement of NSSF be implemented over 5 years period to enable employers and employees to adjust to accommodate the new rates,” FKE said in a statement.

On NHIF, FKE is concerned that the draft law lacks clarity on what the deductions will be applied to, what NHIF will cover, and the process of exemption.

The employers further opposed  NHIF’s proposal to match workers’ contributions, arguing that higher rates would spike their wage bill and capacity to create and sustain employment.

Stagger payments

Workers are equally overburdened by the existing high taxes, mainly pay-as-you-earn (PAYE) and the NHIF deductions at a time when salary increments have been frozen amid high inflation caused by the pandemic and other external shocks.

The Act gives absolute powers to the NHIF board to review rates every two years without the involvement of stakeholders, something that the federation feels will be marred by a lack of transparency and public participation.

Ruto’s government is banking on increasing the workers’ contribution to NHIF and NSSF to mobilise capital for the implementation of the universal health coverage (UHC) plan and improve the social protection fund.

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