National Health Insurance Fund Act

This Act may be cited as the National Health Insurance Fund Act.

Defines the wording: "has not attained the age of twenty-one years, has no income of his own and is living with the contributor."

The Board must appoint a chief executive officer through a competitive process; the chief executive officer must manage day-to-day affairs, serve a three-year term (eligible for one final three-year re-appointment) and is an ex officio Board member.

The Board must competitively recruit a person qualified under the law on certified secretaries in Kenya to serve as the Corporation Secretary of the Board.

The Board may appoint the staff necessary for it to perform its functions, on terms and conditions it sets.

There is a common seal kept by the Corporation Secretary, used only on the Board's direction; the Chairperson and Chief Executive Officer authenticate the affixing of the seal and may authenticate documents and Board decisions; the Board must nominate a member to authenticate the seal when either officer is absent.

Members, officers, employees and agents of the Board are exempt from personal liability for acts done bona fide in executing the Board's functions, powers or duties, subject to section 14.

The Board remains liable to pay compensation or damages to any person for injuries to person, property, or interests caused by exercising powers under this Act or other written law, or by failure of works.

Establishes the National Health Insurance Fund and provides that it vests in, and is operated and managed by, the Board.

Section 4 establishes the Board membership and sets requirements for nominees and publication of names.

Section 5 lists the Board's objects and functions, including receiving Fund contributions, making payments to empaneled providers, setting empanelment criteria, regulating contributions and benefits, protecting contributors' interests, advising and implementing national health insurance policy, facilitating Universal Health Coverage, administering employee benefits for employers, performing other conferred functions, and facilitating public participation.

The Board has the power to manage, control and administer the Fund's assets; but the Board must not charge or dispose of any immovable property without the prior approval of the Cabinet Secretary.

The Board's conduct and regulation of its business and affairs must follow the Second Schedule, and the Board may regulate its own procedure subject to that Schedule.

The Board may, by resolution (generally or in a particular case), delegate to a committee or to any member, officer, employee or agent of the Board the exercise of its powers or the performance of its functions or duties under this Act.

The Chairperson and members of the Board (other than the chief executive officer) are entitled to be paid sitting allowances or other remuneration from the Fund; the Board may determine the remuneration in consultation with the Salaries and Remuneration Commission.

Persons aged eighteen or over who are not beneficiaries must register as members of the Fund.

Contributions to the Fund are mandatory; persons to whom the section applies and employers (including national and county governments and other employers) are liable to contribute; matching contributions by employers apply, with an exemption where an employer provides equivalent private health insurance; the Board (with the Cabinet Secretary) sets amounts and rates; contributions are payable to the Board on the ninth day of each month.

Employers must deduct standard contributions from employees' pay and remit them to the Board; employers who are liable for matching contributions must pay them and must not deduct them from employees.

The Board may, by regulations, designate a prescribed person as the contributor's employer for this Act and may provide for adjusting rights among employers, prescribed employers and employed persons.

If a liable person fails to remit a standard or matching contribution by the due date they must pay a penalty equal to the lending rate of interest on the contribution; employers must pay that penalty and related employee costs, employees are exempt while employed, and government accounting officers are personally liable for such costs when the employer is a government entity.

People required to pay a special contribution must pay it to the Board monthly (or on a later Board-specified date) in the prescribed manner and rate; late payments incur a penalty of ten percent per month which is recoverable and paid into the Fund.

The Board may make regulations about voluntary contributions by unemployed persons, including manner, procedure and forms.

The Board must prescribe how beneficiaries are identified and may require persons liable to remit standard and matching contributions to provide information or documents; making false statements or refusing to produce required information without reasonable cause is prohibited.

Creates a centralized healthcare provider management system; the Board must cause it to be developed, empaneled providers must install and use it for claims, payments and data collection, and the Board may publish guidelines on its use.

The Board must pay benefits from the Fund to empaneled or contracted health care providers for expenses incurred in providing health services to the number of beneficiaries determined by the Board; the Board also sets and reviews tariffs, prescribes limits and conditions in regulations, and must use approved mechanisms and services; the Fund and private insurers have specified payment liabilities.

The Board must not withdraw benefits from a person undergoing treatment for a chronic illness; the Board must make regulations to ensure the Fund meets costs for contributors' inpatient services at empaneled providers, and the Fund shall meet those costs.

The Board must, upon request, provide a statement of accounts to a contributor or a person liable to remit under section 16 regarding their contributions; the Board must also make regulations to carry this section into effect.

Section 24 has been repealed.

It is an offence for any person to knowingly make a false statement to obtain payment of a benefit under the Act; on conviction the person may be fined up to one million shillings or imprisoned up to sixty months, or both. The Board must notify names of suspended hospitals and removed health care providers; suspended or removed institutions are not entitled to Fund benefits.

Section 26. Regulations on contributions.

Regulations may prescribe any conditions or limitations under which a benefit is to be paid.

Modification of the Act in special cases relating to persons who are or have been outside Kenya while contributors to the Fund.

The Board has authority to make regulations under the Act prescribing required matters, the particulars and evidence to be furnished, procedural requirements, and related provisions; regulations may make different provisions for different cases, impose conditions and exceptions, and contain incidental or supplementary provisions.

The Board must publish the list of empaneled health care providers in the Gazette after consulting relevant regulatory bodies; it may set conditions, revoke empanelment, must notify providers of intended revocation in writing with reasons, providers may respond within seven days, seek review, and appeal to the High Court; revoked names must be published in the Gazette and three national newspapers.

The Board may make regulations (in consultation with the Cabinet Secretary) to decide questions arising under the Act, including claims for benefits; regulations may enable appeals and references to the High Court, and the Chief Justice has power to make rules of court for such references and appeals.

Inspectors may enter premises to check compliance, must produce appointment certificates when required, and inspectors who give false information commit an offence punishable by a fine (up to ten million shillings), imprisonment (up to 60 months), or both.

The Fund's financial year is the twelve‑month period starting on 1st July each year.

Permitted investments include reputable bank deposits (on advice of the Central Bank of Kenya) and government securities approved by the National Treasury; investments made under this section must be held in the name of the Board.

The Board must prepare annual revenue and expenditure estimates at least four months before each financial year and the estimates must cover specified categories such as staff pay, pensions, contributors' medical claims, maintenance, equipment replacement and reserve funds.

Sums to meet the Fund's expenditure for a financial year shall be paid out of the Fund, and the Board may determine the manner (in consultation with the Cabinet Secretary) and may estimate the sums in accordance with section 35.

The Board must keep all proper books and records of account for the Fund.

The Board must prepare and submit an annual report within three months after the end of each financial year; the Cabinet Secretary must transmit that report to Parliament within three months of its submission.

The Board may make regulations about staff terms and conditions and Board meetings; regulations shall not be published in the Gazette and must be brought to the attention of all persons affected.

The Board and any person acting on its behalf are exempt from paying stamp duty under the Stamp Duty Act in relation to instruments, benefit payments, or refunds of contributions under this Act.

Section 41 has been repealed by Act No. 1 of 2022, s. 38.

Courts may order convicted persons to pay sums to the Board; the Board may recover sums as civil debts; inspectors or officers may start proceedings; Fund assets are protected from attachment.

If a contributor to the Fund recovers compensation or damages for an injury or illness, they are not entitled to benefits for treatment to the extent those sums are recoverable, and any benefits paid must be repaid to the Board; however the contributor still retains the right to recover compensation or damages.

A copy or extract certified as a true copy by the Chief Executive of the Board, or a person authorised by him, shall be received in evidence as prima facie proof of the truth of its contents in any proceedings under this Act.

A person convicted of an offence under this Act is liable to a fine up to one million shillings or, if a natural person, imprisonment up to two years, or both.

The provisions of the Insurance Act apply to the Fund only for risk spreading and claims administration services.

The provisions of the Retirement Benefits Act (Cap. 197) apply to the Fund only for post-retirement medical contributions under section 3 (2)(a)(v).