Monday, August 30, 2010

court halts new NHIF rates


NAIROBI, Kenya, Aug 30 - The Industrial Court on Monday suspended a new tariff imposed by National Hospital Insurance Fund (NHIF) for at least 10 days to await determination of a case filed by the Central Organisation of Trade Union (COTU).

Justice James Rika overruled an objection by NHIF and said the new rates should not be effected until September 10 when the matter will come up for hearing.

The new rates were due to be enforced from September 1.

In its objection, NHIF has argued that the Industrial Court has no powers to hear and determine a dispute filed by COTU.

The workers’ body moved to court accusing NHIF of allegedly revising the rates without consultations with the union and/or its social partners. According to COTU, the Fund’s board has refused to seek approval or consultations before gazetting the new rates despite recognising COTU's role.

“That without observing Industrial relations and requirements of section 5(e) of the NHIF Act, the board issued a notice on July 2 announcing the new rates to be effected against the workers salaries against their will.”

NHIF recently gazetted new contributory rates that moved away from the Sh320 maximum contribution to a progressive rate of up to Sh2, 000.

The lowest contributor would now pay Sh150 which applies to those earning less than Sh6, 000, while the highest contributor was to fork out Sh2,000 for those earning more than Sh100,000.

The introduction of these new rates has received opposition from COTU and the private sector through Kenya Private Sector Alliance (KEPSA) who have challenged this decision in court arguing that there was no commensurate communication on the benefits that would apply.

But Medical Services Minister Anyang’ Nyong’o has previously defended the move and said the new rates were the only way for the scheme to provide health services to low income earners.


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