SHIF: Key Details for Kenyan Employers and Employees

The Social Health Insurance Fund (SHIF) is Kenya’s latest step toward achieving Universal Health Coverage (UHC), replacing the National Hospital Insurance Fund (NHIF). This transition brings a significant shift in the management of healthcare services, with SHIF now at the heart of the system. Effective from 1st October 2024, all employers and employees must comply with the new regulations as outlined by the Social Health Authority (SHA), under the Social Health Insurance Act (SHIA).

Key Dates and Transition Information

NHIF Transition to SHA

As of 1st October 2024, NHIF will cease to operate, and SHA will take over. From this date, all healthcare contributions will be made to SHA, not NHIF.

Last NHIF Admission:

The last day for NHIF admissions is 30th September 2024. After this, SHA benefits will take effect, ensuring continued accessibility to affordable healthcare for all citizens, including those from the informal sector and those suffering from chronic illnesses.

Payment Deadlines:

Payments received on or before 9th October 2024 will still be credited to NHIF.
Payments received from 9th November 2024 onwards will be credited to SHA.

This transition requires every Kenyan citizen, including dependants, to register under SHA to continue receiving healthcare services.

What Employers and Employees Need to Do About SHIF

With the SHA's launch, employers and employees must take two critical steps to ensure compliance and smooth payroll processing under the Primary Health Care Act and Digital Health Act:

1. Register Employers and Employees on the SHA Portal

Employers must register themselves and their employees on the SHA Employer Portal before 1st October 2024 to avoid disruptions in healthcare services. Registration is critical, and while no strict deadline has been set, it is advised that businesses complete this task before their October payrolls to avoid interruptions in their economic transformation agenda.

Steps to Register:

Visit the SHA Employer Portal: Register Here.
Create an employer account and verify it by following the portal’s instructions.
Register your employees by entering their details.
Use the portal to manage social health insurance fund contributions, generate reports, and update employee information.
Use the portal to remit Social Health Insurance (SHI) contributions promptly.
Employer/Employee Registration Link: Register Employers for SHIF

2. Deduct 2.75% SHIF Contributions from Employees’ October Salary

Starting with the October 2024 payroll, employers must deduct 2.75% from each employee’s gross salary as their SHIF contribution. These deductions will be remitted to SHA, replacing NHIF contributions. Employers using payroll systems must ensure their payroll systems are updated to reflect this change in the contribution rate.

Employers using Workpay’s payroll software will benefit from the seamless introduction of the SHIF update within October 2024, ensuring error-free calculation and remittance of SHIF contributions.

The Importance of Early Registration

While there is no fixed deadline for employer registration, businesses are highly encouraged to complete the process before the October payroll cycle. Early registration will help avoid potential disruptions in primary healthcare coverage and ensure that employees and their beneficiaries maintain seamless access to care services. Any delay could affect both payroll processing and employee healthcare benefits, including access to the Critical Illness Fund.

Why Act Now?

Avoid Payroll Disruptions: Registering now ensures that your payroll is prepared for social health insurance fund deductions, avoiding issues that may arise in payroll processing.
Maintain Compliance: Failing to register and remit contributions could result in non-compliance with SHA regulations, which may lead to penalties or legal actions by the High Court or Court of Appeal.
Protect Employee Coverage: Early registration ensures employees and their dependants continue receiving healthcare services, including coverage for critical illness without interruption.

How Workpay Helps with Compliance

Workpay’s payroll software will incorporate the SHIF update within October 2024, ensuring smooth and error-free payroll calculation:

Accurate Deductions: The software will automatically calculate the 2.75% contribution based on employee salaries in KES (Ksh), ensuring compliance with the new requirements under the Social Health Insurance Act.
Timely Reports: The software will generate accurate SHIF contribution reports for submission to SHA, ensuring compliance with Kenya’s economic transformation efforts.

Conclusion

The transition to SHIF marks a pivotal change in Kenya’s healthcare services landscape, and employers must act now to ensure readiness for the October 2024 payroll. By registering early and adjusting statutory deductions to reflect the 2.75% SHIF contribution, employers can avoid any disruptions in compliance or employee healthcare coverage.

Don’t wait for the deadline—register your company and employees for SHIF today to secure their healthcare benefits and ensure smooth payroll operations, supporting Kenya’s journey towards UHC.