Employers want new NHIF rates pegged on basic pay

Politics and policy

Federation of Kenya Employers (FKE) executive director Jacqueline Mugo, FKE chairman Linus Gitahi and National Hospital Insurance Fund (NHIF) chairman Mohamud Ali during a members consultative meeting on the proposed NHIF rates on October 22, 2014. PHOTO | SALATON NJAU | NATION MEDIA GROUP 

By WAINAINA WAMBU

In Summary

• The federation is set to meet with NHIF to discuss the issue. In the meantime, it has advised members to base the deductions on basic pay and not the gross pay.

The Federation of Kenya Employers has asked employers to base the new rates for National Hospital Insurance Fund (NHIF) on basic rather than gross pay.

The new rates, which come into effect at the end of this month, require workers earning Sh5,999 to pay Sh150 which is the lowest deduction and those earning above Sh100,000 to pay Sh1,700.

FKE chairman Linus Gitahi said the decision by NHIF to base its new rates on gross pay was confusing.

“This paradigm shift of basing statutory payments on gross earnings is misguided and punitive to both employers and employees,” Mr Gitahi said.

The self-employed will now remit Sh500 up from Sh160. The rates previously ranged between Sh30 and Sh320 for salaried workers.

Mr Gitahi added that NHIF should ensure that the implementation of the new rates is not challenged.

“We must consider that once the annual period of claim expires it becomes a saving for the NHIF and has no future benefit to the contributor,” he said.

The federation is set to meet with NHIF to discuss the issue. In the meantime, it has advised members to base the deductions on basic pay and not the gross pay.