NHIF irregular tendering of multi-billion insurance

The National Health Insurance Fund's decision to re-advertise a multi-billion shilling tender has landed it in the sights of the Ministry of Public Service.
NHIF irregular tenders
National Health Insurance Fund headquarters in Upper Hill, Nairobi./Courtesy

The NHIF published a tender for public servant and National Youth Service insurance despite the ministry’s advice. It has been revealed that NHIF’s decision to extend the tender for three months went against the ministry’s guidance, which wanted the tender extended for a year.

On Tuesday, NHIF issued an advertisement for the supply of co-insurance and facultative insurance services for the Work Injury Benefits Act and Group Personal Accident  for public officials and NYS personnel.

The insurance was supposed to cover 120,047 officers, which included 81,388 government servants, NYS employees, and 38,659 devolved staff.

According to records, the move could expose the government to higher premiums and goes against the ministry’s recommendation that NHIF extend the contract for one year from April 2023 to April 2024.

“As you are aware, this State Department wrote to you on 30 January 2023 regarding the extension of the cover for the next one year, i.e. April 2023 to April 2024,” stated a letter issued to NHIF acting CEO Samson Kuhora by Public Service Principal Secretary Amos Gathecha.

According to the letter dated 12 May, the Ministry’s counsel was based on advice from the Insurance Regulatory Authority, “who are the advisors of the transaction on this matter.”

“On 26 April 2023, the IRA wrote to us and requested that the coverage be extended for one year to avoid the government being penalized with higher premiums. As a result, this office reiterates that the coverage should be extended for a year rather than three months,” Gathecha stated.

The letter was also copied to Felix Koskei, Chief of Staff and Head of Public Service, Aisha Jumwa, and Godfrey Kiptum, Commissioner of Insurance and CEO of Insurance Regulatory Authority.

According to a source, the NHIF will be expected to pay commercial insurance companies Ksh6.9 billion owed to them by 30 June 2023, at a time when the Fund is already dealing with mounting pending bills.

All eyes are now on the NHIF, whose decision to bid for open tender insurance coverage for it’s employees and a consortia tender for civil servants has raised questions.

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