Social Health Insurance Act

Section 1. Short title Section This Act may be cited as the Social Health Insurance Act, 2023.

Section 2. Interpretation Section "Authority" means the Social Health Authority established under section 4 ; “beneficiary” means a person who— (a) is a contributor ; (b) has not attained the age of twenty-one years, has no income of his own and is living with the contributor ; (c) has not attained the age of twenty-five years, is undergoing a full-time course of education at a university, college, school or other educational establishment or serving under articles or an indenture with a view to qualifying in a trade or profession and is not in receipt of any income other than a scholarship, bursary or other similar grant or award; (d) is a person with disability and is wholly dependent on and living with the contributor ; or (e) is a spouse of the contributor ; “Board” means the Board of the Social Health Authority ("the Social Health Authority established under;") constituted under section 7 ; “Cabinet Secretary” means the Cabinet Secretary for the time being responsible for matters relating to health; "chronic illness” means a condition that lasts one year or more and require ongoing medical attention or limit activities of daily living or both; "Claims Office” means the Claims...

Section 3. Objects of the Act Section provide a framework for improved health outcomes and financial protection in line with the right to health and universal health coverage;

Section 4. Establishment of the Social HealthAuthority Section 4(1) There is established an Authority ("the Social Health Authority established under;") to be known as the Social Health Authority ("the Social Health Authority established under;") . Section 4(2)(a) suing and being sued; Section 4(2)(b) taking, purchasing or otherwise acquiring, holding, charging and disposing of movable and immovable property; Section 4(2)(c) receiving and borrowing money; and Section 4(2)(d) doing or performing such other things or acts necessary for the proper performance of its functions under this Act. Section 4(3) The provisions of the First Schedule shall have effect with respect to the Authority ("the Social Health Authority established under;") .

Section 5. Functions of theAuthority Section register the beneficiaries in accordance with this Act;

Section 6. Powers of theAuthority Section 6(1) The Authority ("the Social Health Authority established under;") shall have all the powers necessary for the performance of its functions under this Act. Section 6(2)(a) manage, control and administer the assets of the Authority ("the Social Health Authority established under;") in such manner and for such purpose as best promotes the objects for which the Authority ("the Social Health Authority established under;") is established in accordance with the Public Procurement and Assets Disposal Act, ( No. 33 of 2015 ): Provided that the Authority ("the Social Health Authority established under;") shall not charge or dispose of any immovable property without the prior approval of the National Assembly; Section 6(2)(b) receive any gifts, grants, donations or endowments made to the Fund or any other monies in respect of the Fund and make disbursements therefrom in accordance with the provisions of this Act; Section 6(2)(c) open a banking account or banking accounts for the Fund with authorization from the National Treasury; and Section 6(2)(d) enter into association with such other bodies organizations, within or outside Kenya, as it may con...

Section 7. TheBoardof theAuthority Section 7(1)(a) a non-executive Chairperson, who shall be appointed by the President; Section 7(1)(b) the Principal Secretary in the ministry for the time being responsible for matters relating to health or a designated representative; Section 7(1)(c) the Principal Secretary in the ministry for the time being responsible for matters relating to finance or a designated representative; Section 7(1)(d) the Director-General for Health; Section 7(1)(e) a representative of the County Executive Committee Health Caucus; Section 7(1)(f) one person, not being a Governor, nominated by the Council of County Governors with knowledge in field of finance, accounting, health economics, law or business and management; Section 7(1)(g) one person, not being a public officer with proven experience in matters of health insurance, health financing, financial management, health economics, healthcare administration; Section 7(1)(h) the Kenya Medical Association; Section 7(1)(h)(i) the Kenya Medical Association; Section 7(1)(h)(ii) the informal sector association; Section 7(1)(h)(iii) the consortium of healthcare providers; and Section 7(1)(h)(iv) the Central Organization...

Section 8. Qualifications for appointment Section 8(1)(a) is a citizen of Kenya; Section 8(1)(b) holds a minimum of a bachelor’s degree from a university recognized in Kenya; Section 8(1)(c) has knowledge and experience of not less than ten years in data science, information technology, health governance, health administration, health policy, finance or economics, five of which shall be at managerial level; and Section 8(1)(d) meets the requirements of Chapter Six of the Constitution. Section 8(2)(a) has at any time been convicted of a criminal offence and sentenced to a term of imprisonment exceeding six months; Section 8(2)(b) is declared to be of unsound mind; Section 8(2)(c) is an undischarged bankrupt; Section 8(2)(d) is a director, officer, employee or shareholder of any insurer, broker, insurance agent or any other member of the insurance industry; or Section 8(2)(e) has been found in accordance with any law or parliamentary reports to have misused or abused a state office or public office or in any way to have contravened the provisions of Chapter Six of the Constitution.

Section 9. Vacancy of the office Section resigns from office by notice in writing to the appointing authority;

Section 10. Conduct of business and affairs of theBoard Section The conduct and regulation of the business and affairs of the Board shall be as provided in the Second Schedule, but subject thereto, the Board may regulate its own procedure.

Section 11. Delegation by theBoard Section The Board may, by resolution either generally or in any particular case, delegate to any committee of the Board or to any member, officer, employee or agent of the Board the exercise of any of the powers or the performance of any of the functions or duties of the Board under this Act.

Section 12. Remuneration of members Section The chairperson and members of the Board shall be paid such remuneration, fees, allowances and such other reimbursements as may be approved by the Cabinet Secretary in consultation with the Salaries and Remuneration Commission.

Section 13. Appointment of the Chief Executive Officer Section 13(1) There shall be a Chief Executive Officer of the Authority ("the Social Health Authority established under;") who shall be competitively recruited and appointed by the Board . Section 13(2) The Chief Executive Officer shall hold office on such terms as the Board may, on the advice of the Salaries and Remuneration Commission, determine.

Section 14. Qualification for appointment as Chief Executive Officer Section 14(1)(a) has a minimum of a master’s degree from a university recognized in Kenya; Section 14(1)(b) has at least ten years' knowledge and experience in health insurance, health financing, health economics, healthcare administration or any other relevant field; Section 14(1)(c) has served in a management level for a period of at least five years; Section 14(1)(d) has not been convicted of an offence and is not serving a term of imprisonment; and Section 14(1)(e) meets the requirements of Chapter Six of the Constitution. Section 14(2) The Chief Executive Officer shall, subject to the directions of the Board , be responsible for the day to day management of the affairs and staff of the Board . Section 14(3) The Chief Executive Officer shall be administrator of the Funds ("the Primary Healthcare Fund established under, the Social Health Insurance Fund established underand the Emergency, Chronic and Critical Illness Fund established under;") established under this Act. Section 14(4)(a) open and operate such banks with the approval of the Board and the National Treasury; Section 14(4)(b) supervise and control th...

Section 15. Tenure of office of the Chief Executive Officer Section The Chief Executive Officer shall hold office for a period of three years and shall be eligible for appointment for one further term of three years.

Section 16. Corporation Secretary Section 16(1) There shall be a Corporation Secretary who corporation shall be competitively recruited and appointed by the Board on such terms as the Board may, on the advice of the Salaries and Remuneration Commission, determine. Section 16(2)(a) holds a bachelor’s degree in law from a university recognized in Kenya; Section 16(2)(b) is an Advocate of the High Court of Kenya; Section 16(2)(c) has at least five years’ experience as a corporation secretary or a similar governance role; Section 16(2)(d) is a member in good standing of the Institute of Certified Public Secretaries of Kenya; and Section 16(2)(e) meets the requirements of Chapter Six of the Constitution. Section 16(3)(a) in consultation with the Chairperson of the Board , issue notices for meetings of the Board ; Section 16(3)(b) keep, in custody, the records of the deliberations, decisions and resolutions of the Board ; Section 16(3)(c) transmit decisions and resolutions of the Board to the Chief Executive Officer for execution, implementation and other relevant action; Section 16(3)(d) provide guidance to the Board on their duties and responsibilities on matters relating to governance...

Section 17. Staff Section The Board may appoint such staff as may be necessary for the proper discharge of the functions of the Authority ("the Social Health Authority established under;") under this Act, upon such terms and conditions of service as the Board may determine upon the advice of the Salaries and Remuneration Commission.

Section 18. Protection from personal liability Section 18(1) No matter or thing done by a member of the Board or an officer, employee or agent of the Authority ("the Social Health Authority established under;") shall, if the matter or thing as done in good faith in the execution of the functions or powers of the Authority ("the Social Health Authority established under;") , render the member, officer, employee or agent personally liable for any action, claim or demand whatsoever. Section 18(2) Notwithstanding subsection (1), nothing in this section shall exempt a member of the Board , officer, employee or agent of the Authority ("the Social Health Authority established under;") from individual responsibility for unlawful or criminal act committed by the member of the Board , officer, employee or agent of the Authority ("the Social Health Authority established under;") .

Section 19. Common seal of theAuthority Section 19(1) There shall be a common seal of the Authority ("the Social Health Authority established under;") which shall be kept in the custody of the Corporation Secretary and shall not be used except on the direction of the Board . Section 19(2) The affixing of the common seal of the Authority ("the Social Health Authority established under;") shall be authenticated by the signatures of the Chairperson and the Chief Executive Officer and any document required by law to be made under seal and all decisions of the Board may be authenticated by the signatures of the Chairperson and the Chief Executive Officer. Section 19(3) The Board shall, in the absence of either the Chairperson or the Chief Executive Officer, in any particular matter, nominate one member to authenticate the seal of the Authority ("the Social Health Authority established under;") on behalf of either the Chairperson or the Chief Executive Officer.

Section 20. Establishment of thePrimary Healthcare Fund Section There is established a Fund to be known as the Primary Healthcare Fund whose object shall be to purchase primary healthcare services from health facilities.

Section 21. Sources ofFunds Section monies appropriated by the National Assembly;

Section 22. Expenditure of the Fund Section 22(1) There shall be paid out of the Fund payments in respect of any expenses incurred in pursuance of the object and purpose for which the Fund is established. Section 22(2) The expenditure incurred on the Fund shall be limited to annual budget estimates prepared by the Authority ("the Social Health Authority established under;") at the beginning of the financial year to which they relate. Section 22(3) Any revision of the approved budget estimates by the Board shall be approved by the National Assembly in the supplementary budget estimates.

Section 23. Capital of the Fund Section The capital of the Fund shall be as appropriated by the National Assembly or from any other source provided for under this Act.

Section 24. Implementation of thePrimary Healthcare Fund Section The Cabinet Secretary shall in consultation with the Board make regulations for the implementation of the Primary Healthcare Fund .

Section 25. Establishment of the Social Health Insurance Fund Section 25(1) There is established a Fund be known as the Social Health Insurance Fund. Section 25(2)(a) contributions under the Act; Section 25(2)(b) monies appropriated by the National Assembly for indigent and vulnerable persons; and Section 25(2)(c) gifts, grants, innovative financing mechanisms or donations.

Section 26. Registration Section 26(1) Every Kenyan shall register as a member of the Social Health Insurance Fund. Section 26(2) A person who, being a non-Kenyan, and is ordinarily resident in Kenya, shall be eligible for registration as a member of the Social Health Insurance Fund. Section 26(3) A child born after commencement of this Act shall be registered at birth as a member of the Social Health Insurance Fund. Section 26(4) Registration shall be conducted continuously at various points in such manner as shall be prescribed by the Cabinet Secretary . Section 26(5) Any person who is registerable as a member under this Act shall produce proof of compliance with the provisions of this Act on registration and contribution as a precondition of dealing with or accessing public services from the national government, county government or a national or county government entities. Section 26(6) A person who is a non-Kenyan that intends to enter and remain in the territory of Kenya for a period of less than twelve months shall be required to be in possession of a travel health insurance cover as may be designated by the Cabinet Secretary . Section 26(7) The Cabinet Secretary shall estab...

Section 27. Contributions Section 27(1)(a) every Kenyan household ; Section 27(1)(b) a non-Kenyan resident, ordinarily residing in Kenya for a period exceeding twelve months; Section 27(1)(c) the national government; Section 27(1)(d) a county government; and Section 27(1)(e) any other employer . Section 27(2)(a) in the case of a household whose income is derived from salaried employment, by a monthly statutory deduction from the wages or salary by the employer at a rate prescribed under this Act; Section 27(2)(b) in the case of a household whose income is not derived from salaried employment, by an annual contribution of a proportion of household income as determined by the means testing instrument in the manner prescribed under this Act; Section 27(2)(c) in the case of households in need of financial assistance as determined by the means testing instrument, by the government at a rate apportioned from funds appropriated by Parliament and County Assemblies for that purpose as prescribed under this Act; Section 27(2)(d) in the case of persons under lawful custody, by the Government from funds appropriated by Parliament for that purpose at a rate prescribed under this Act; Section 27...

Section 46. Stakeholder engagement Section 46(1) The Authority ("the Social Health Authority established under;") shall facilitate public participation and stakeholder engagement in the carrying out of its functions under this Act. Section 46(2) The Cabinet Secretary shall prescribe regulations on the modalities of engaging stakeholders at the national and county level.

Section 47. Digitization Section 47(1) All processes and services under this Act shall continue to be digitized using appropriate, reliable, secure, inter-operable, verifiable and responsive technology through an information system. Section 47(2)(a) registration of members; Section 47(2)(b) member identification; Section 47(2)(c) contributions to the Fund; Section 47(2)(d) empanelment ("enrolment of a health care provider into the list of health care service facilities approved by the Board;") of facilities; Section 47(2)(e) execution of contracts; Section 47(2)(f) member identification; Section 47(2)(g) notification and preauthorization; Section 47(2)(h) claims management; and Section 47(2)(i) settlement of claims. Section 47(3) Every Kenyan shall be uniquely identified for purposes of provision of health services under this Act. Section 47(4) The digitization of processes and services under this Act shall conform to the provisions of the Data Protection Act, ( No. 24 of 2019 ) and all other relevant laws. Section 47(5) The Cabinet Secretary shall make regulations for the better carrying out of the provisions of this section.

Section 48. Offences and penalties Section 48(1)(a) fails without lawful excuse to pay to the Social Health Insurance Fund within the period prescribed by this Act any contribution which he or she is liable as a contributing employer to pay under this Act; or Section 48(1)(b) knowingly makes any deduction from the wages of the employee in respect of any contribution which he or she is liable as a contributing employer to pay under this Act, other than a deduction which he or she is authorized to make by this Act; or Section 48(1)(c) for the purpose of obtaining any benefit for himself or herself or for any other person, knowingly makes any false statement or representation, or produces or furnishes, or causes to be produced or furnished, any document or information which he or she knows to be false in any material particular, Section 48(2) A person who misappropriates any of the funds or assets of the Fund, or assists or causes any person to misappropriate or apply funds, otherwise than in the manner provided in the Act, commits an offence and shall upon conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding ten million shillings or to...

Section 49. Recovery of sums due under this Act Section 49(1) The court before which any person is convicted of an offence under this Act may, without prejudice to any civil remedy, order such person to pay to the Authority ("the Social Health Authority established under;") , as the case may be, the amount of any contribution or any other sum that was not obtained in a lawful manner, together with any penalty found to be due from such person to the Authority ("the Social Health Authority established under;") and any sum so ordered shall be recoverable as a fine and paid into the Funds ("the Primary Healthcare Fund established under, the Social Health Insurance Fund established underand the Emergency, Chronic and Critical Illness Fund established under;") . Section 49(2) All sums due to the Authority ("the Social Health Authority established under;") shall be recoverable as debts due to the Authority ("the Social Health Authority established under;") , and without prejudice to any other remedy, may be recovered by the Authority ("the Social Health Authority established under;") summarily as a civil debt. Section 49(3) All criminal and civil proceedings under this Act may, without pr...

Section 50. Regulations Section 50(1) The Cabinet Secretary shall, in consultation with the Board , make Regulations for the better carrying out of the provisions of this Act. Section 50(2)(a) any matters incidental to the payment and collection of any contributions under this Act; Section 50(2)(b) the amount and rates of contributions payable by contributors into the Fund; Section 50(2)(c) the manner of the making and determination of the healthcare benefits package; Section 50(2)(d) the manner of the making and determination of any claim to any benefit; Section 50(2)(e) the settlement of valid claims; Section 50(2)(f) the process of enrolment of healthcare providers and healthcare facilities on the list of approved healthcare providers and healthcare facilities; and Section 50(2)(g) anything which is required to be prescribed for the better giving effect of the provisions of this Act. Section 50(3)(a) the purpose and objective of the delegation under this section is to enable the Cabinet Secretary to make regulations for better carrying into effect the provisions of this Act; and Section 50(3)(b) the authority of the Cabinet Secretary to make regulations under this Act shall be l...

Section 51. Conflict with other laws Section This Act shall prevail in the case of any inconsistency between this Act and any other legislation on matters related to provision of social health insurance.

Section 52. Application ofCap. 487 Section The provisions of the Insurance Act shall apply to the Authority ("the Social Health Authority established under;") only in respect to claims administration services.

Section 53. General penalty Section A person convicted of an offence under this Act for which no other penalty is prescribed shall be liable to a fine not exceeding one million shillings or, in the case of a natural person, to imprisonment for a term not exceeding two years, or to both.

Section 54. Repeal of No. 9 of 1998 Section The National Health Insurance Fund Act, 1998 is repealed.

Section 55. Winding up Section In the event of winding up of any of the Funds ("the Primary Healthcare Fund established under, the Social Health Insurance Fund established underand the Emergency, Chronic and Critical Illness Fund established under;") established under this Act, the cash balances shall be transferred to the Exchequer while other assets shall be transferred to the National Treasury.

Section 28. Establishment of theEmergency, Chronic and Critical Illness Fund Section defray the costs of management of chronic illnesses after depletion of the social health insurance cover; and

Section 29. Sources of funds Section monies appropriated by the National Assembly;

Section 30. Implementation ofEmergency, Chronic and Critical Illness Fund Section The Cabinet Secretary shall in consultation with the Board make regulations for the implementation of the Emergency, Chronic and Critical Illness Fund .

Section 31. Benefits Section 31(1) Every beneficiary shall be entitled to an essential healthcare benefits package prescribed by the Cabinet Secretary in consultation with the Board . Section 31(2) Notwithstanding the provisions of this Act, nothing shall be construed to preclude any beneficiary from taking private health insurance cover.

Section 32. Tariffs Section 32(1) The benefits payable under this Act shall be based on a tariff . Section 32(2) The Cabinet Secretary shall, in consultation with the Board , prescribe the tariffs applicable to the benefits package under this Act. Section 32(3) The tariffs referred to under subsection (1), maybe reviewed from time to time.

Section 33. Empanelment Section 33(1) The Authority ("the Social Health Authority established under;") shall make payments out of the Funds ("the Primary Healthcare Fund established under, the Social Health Insurance Fund established underand the Emergency, Chronic and Critical Illness Fund established under;") to healthcare providers or health care facilities that are empaneled and contracted in accordance with the provisions of this Act. Section 33(2) A healthcare provider or healthcare facility seeking to be empanelled under the Act shall make an application to the body responsible for accreditation for quality of care in the manner prescribed by the Cabinet Secretary . Section 33(3) Upon the publication of the list of empanelled healthcare providers and healthcare facilities on the website and in the Kenya Gazette , the Authority ("the Social Health Authority established under;") may contract the healthcare providers or healthcare facilities within thirty days of the date of the publication of the list. Section 33(4) The body under subsection (2) may, at any time, revoke any accreditation under this section. Section 33(5) A healthcare provider or healthcare facility aggrieved b...

Section 34. Contracting Section 34(1) The Authority ("the Social Health Authority established under;") may from time to time negotiate and enter into contracts with healthcare service providers and healthcare facilities who qualify under section 33 (3) for the provision of health services to the beneficiaries. Section 34(2) The Authority ("the Social Health Authority established under;") shall publish on its website and in such other manner as the Authority ("the Social Health Authority established under;") may deem appropriate, the health service providers and healthcare facilities referred to in subsection (1) to be contracted health service providers for purposes of this Act. Section 34(3) A publication under this section shall be subject to fulfillment by the healthcare service provider and healthcare facility of such criteria, including meeting quality standards set by the Cabinet Secretary in accordance with section 33 (2). Section 34(4) Every contracted healthcare provider and healthcare facility shall be issued with such identification as may be prescribed by the Authority ("the Social Health Authority established under;") and such identification shall be displayed in a con...

Section 35. Claims Management Section 35(1) There is established within the Authority ("the Social Health Authority established under;") an office to be known as the Claims Management Office which shall review and process the claims made under this Act. Section 35(2)(a) reviewing, processing and validating medical claims from healthcare providers and healthcare facilities; Section 35(2)(b) appraising medical claims based on the benefit package; Section 35(2)(c) issuing pre-authorizations for access to healthcare services based on the benefit package; Section 35(2)(d) developing an e-claims management system; Section 35(2)(e) undertaking quality assurance surveillance in respect of claims; Section 35(2)(f) establishing systems and controls for detecting and identifying fraud appropriate to the Fund’s exposure and vulnerability; Section 35(2)(g) sensitizing claimants on the consequences of submitting false and fraudulent claims; Section 35(2)(h) collecting and analyzing data for purposes of claim management; Section 35(2)(i) preparing quarterly reports on submission to the to the Board and the Cabinet Secretary ; and Section 35(2)(j) performing any other functions as may be necessary...

Section 36. Settlement of claims Section 36(1) The Authority ("the Social Health Authority established under;") shall make payments to a contracted healthcare provider or healthcare facility upon submission of a claim by the Claims Management Office. Section 36(2) The Cabinet Secretary shall make regulations for the better carrying out of the provisions of this section.

Section 37. Financial year Section The financial year of the Authority ("the Social Health Authority established under;") shall be the period of twelve months ending on the thirtieth day of June in each year.

Section 38. Retention of receipts and earnings Section All receipts, earnings and accruals to the Authority ("the Social Health Authority established under;") and the balance of the Funds ("the Primary Healthcare Fund established under, the Social Health Insurance Fund established underand the Emergency, Chronic and Critical Illness Fund established under;") at the close of each financial year shall be retained by the Authority ("the Social Health Authority established under;") for the purposes of the Funds ("the Primary Healthcare Fund established under, the Social Health Insurance Fund established underand the Emergency, Chronic and Critical Illness Fund established under;") .

Section 39. Annual estimates Section 39(1) The Authority ("the Social Health Authority established under;") shall, within three months after the end of the financial year, cause to be prepared estimates of its revenue and expenditure for that financial year. Section 39(2)(a) the payment of all the claims and benefits of the contributors in respect of medical and healthcare expenses incurred by them or their named beneficiaries pursuant to the provisions of this Act; Section 39(2)(b) the payment of salaries, allowances and other charges in respect of the staff of the Authority ("the Social Health Authority established under;") ; Section 39(2)(c) the payment of pensions, gratuities and other charges in respect of retirement benefits which are payable out of the funds of the Authority ("the Social Health Authority established under;") ; Section 39(2)(d) the proper maintenance of buildings and grounds of the Authority ("the Social Health Authority established under;") ; Section 39(2)(e) the acquisition, maintenance, repair and replacement of the equipment and other movable property of the Authority ("the Social Health Authority established under;") ; or Section 39(2)(f) the creation of...

Section 40. Expenses of administering theFunds Section 40(1) There shall be paid out of the finances of the Authority ("the Social Health Authority established under;") such administrative expenses as may be incurred by the Board in the exercise of its powers or the performance of its functions under this Act. Section 40(2) The administrative expenses referred to under subsection (1) shall not exceed five percent of the annual expenditure of the Fund.