The Socialhealth Insurance Bill, 2023 (National Assembly Bills No. 58) Of 2023

SPECIALISSUE

Kenya Gaete Supplement No.I64 (National Assembly Bills No.58)

REPUBLICOFKENYA

KENYA GAZETTESUPPLEMENT

NATIONALASSEMBLYBILLS.2023

NAIROBl,11thSeptember,2023

CONTENT

Bill for Introduction into the National Assembly

The Social Health Insurance Bill.2023

HRINTED ANDPUDLISHED BTTHEGOVERNMENTISUNTER.NAROI

PAGE

1667

THESOCIALHEALTHINSURANCEBILL.2023 ARRANGEMENTOFCLAUSES

Clause

PARTI-PRELIMINARY

• I-Short title.
• 2-Interpretation.
• 3-Objectsof the Act.

PARTHI-ESTABLISHMENTOFTHESOCIAL HEALTHAUTHORITY

• 4Establishment of the Social HealthAuthority
• 5-Functions of the Authority.
• 6-Powers ofthe Authority
• 7-TheBoard of theAuthority
• 8-Qualificationsfor appointment
• 9-Vacancy ofoffice.
• I0-Conduct ofbusiness and affairs of the Board.
• II-Delegation by the Board
• 12-Remuneration ofmembers
• 13-Appointment of the Chief Executive Officer.
• 14-Qualification for appointment as Chief Executive Officer.
• 15-Tenure ofoffice of the Chief Executive Officer.
• 16-Corporation Secretary.
• 17-Staff.
• 18-Protection frompersonal liability
• 19-Common sealoftheBoard.

PARTIII-PRIMARYHEALTHCAREFUND

• 20-Establishment of thePrimary Healthcare Fund.
• 21-Sources ofFunds.
• 22-Expenditure of theFund

• 23-Capital of theFund.
• 24-Implementation of thePrimary Healthcare Fund.

PARTIV-THESOCIALHEALTH INSURANCE FUND

• 25-Establishment of the Social Health Insurance Fund.
• 26-Registration.
• 27-Contributions.

PARTV-THEEMERGENCY,CHRONICAND

CRITICALILLNESSFUND

• 28-Establishment of the Emergency.Chronic and
• Critical lllness Fund.
• 29-Sourcesof funds.
• 30-Implementation of the Emergeney.Chronic and
• Critical IllnessFund.

PARTVI-BENEFITS,TARRIFS.EMPANELMENT. CONTRACTINGAND CLAIMS

• 31-Benefits
• 32-Tariffs.
• 33-Empanelment.
• 34-Contracting.
• 35-Claimsmanagement.
• 36-Settlement ofclaims.

PARTVII-FINANCIALPROVISIONS

• 37-Financial year.
• 38-Investmentof Funds.
• 39-Retention of receipts and earmings.
• 40-Annualestimates.
• 41-Expenses of administering the Fund.
• 42-Accounts and audit.
• 43-Annual repor.

PARTVIII-DISPUTERESOLUTION COMMITEE

44-Dispute Resolution

• 45-Establishment of theDisputeResolution
• Committee.
• 46-Vacancy in the Dispute Resolution Committee

PARTIX-MISCELLANEOUSPROVISIONS

• 47-Stakeholderengagement.
• 48-Digitization.
• 49-Offencesandpenalties
• 50-Regulations.
• 51-Conflict with other laws.
• 52-Application of Cap.487.
• 53-General Penalty
• 54-RepealofNo.9of1998.
• 55-Winding up.

SCHEDULES

FIRST SCHEDULE TRANSITIONAL PROVISIONS

SECONDSCHEDULE CONDUCTOF

BUSINESS AND

AFFAIRS OF

THEBOARD

THESOCIALHEALTHINSURANCEBILL.2023 ABillfor

AN ACTofParliament to establish the framework for

the management of social health insurance:to provide for the establishment of the Social Health Authority:to giveeffect to Article 43(1)(a)ofthe Constitution:and for connected purposes

ENACTED by the Parliament of Kenya as

follows-

PARTI-PRELIMINARY

• 1.This Act maybe cited as the Social Health Insurance Act.2023 and shall come into force on such date as the Cabinet Secretary may designate by notice in the
• Gazette.
• 2.In this Act.unless thecontext otherwiselmteret
• requires-
• "Authority" means the Social Health Authority established under section 4:

"beneficiary"means a person who-

• (a)isa 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 attnined 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 articlesor 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)isa spouse of the contributor:

"Boardmeans the Board of the National Social

Health Authority constituted undersection7:

Shon filed commencement

"Cabinet Secretary"means the Cabinet Secretary for

the time beingresponsible for mattersrelating to health:

"chronic illnessmeans a condition that lasts one year or more and require ongoing medical attention or limit activities of daily living orboth:

"Claims Office"means theClaims Management Office established under section35:

"eritical illness"means a serious and potentially lifethreateningconditionthat demandsurgentmedical intervention and can have a substantial impact on a person's health,well-being and quality oflife:

"contractingmeans the entering into aformal agreement with an empaneled health care provider or healthcare facility forpurposes of provision of services,

"contributormeans a person liable to contribute to the Fund asprovided under section 27:

"Dispute Resolution Committee" means Committee established under section45:

the

"Emergency.Chronic and Critical Illness Fund means the fund established under section 28:

"emergency treatment" means Lthe necessary immediate health care that must be administered to prevent death orworseningof a medical situation:

"empanelment"means enrolment ofa health care provider into the list of health care service facilities

approved by the Board:

"employer"has the meaning assigned under the No.llat 2007

Employment Act,2007:

"Funds" means thePrimaryHealthcareFund established under section 20.the Social Health Insurance Fund established under section 25 and the Emergency. Chronic and Critieal Illness Fund established under section

28:

"health care provider"has the meaning assigned to it under the Health Act,2017:

No.21ol2017:

"healthcare services" has the meaning assigned to itNo.2lor207. under the Health Act,2017:

huseholdmeans a social unit comprising of an eligible contributor,whether contributing by self or paid for.and their beneficiaries,or who share the same socialeconomicneedsassociatedwithconsumptionand production:

"indigentmeans a person who is poor and needy to the extent that the person cannot meet their basic necessities of life:

"means testing"means a method that uses the Means

Testing Instrument to determine whether an individual or a household has the ability to pay for their social health insurance premium:

"Means Testing Instrumentmeans a set ofindicators thatcapturevarious socio-economic aspectsofan individual or a household for purposes of conductinga means testing:

"PrimaryHealthcareFund" means the Fund

established under section 20:

"primary health caremeans essential health care based on practical.scientifically sound and socially acceptablemethodsandtechnologytharismade universally accessible to individuals and families in the community at every stage of their development,through their full participation and at an affordable cost to the community and country.in the spirit of self-reliance and

self-determination:

"riskspreading" meansthetransfer,sharingor distribution of the risk insured as berween one or more insurance companies or other providerswith a view to reducing the financial cost in the eventual happening of the insuredeventhereby referredasaloss forspecial. enhanced ornegotiated scheme:

"spouse"means the wife or husband ofa contributor contributor for that financial year:

"tariff'means the rates or fees that are paid to healthcare facilities or healthcare providers for services covered under this Act to deliver the most cfficient and cost-effective care to patients: and means that all individuals and communities receive the health services they need including the full spectrum of essential.quality healthservices from heaith promotionto prevention, treatment,rehabilitation.andpalliativecarewithout

"UniversalHealthCoverage" suffering financial hardship:

"vulnerable personmeans a person who needs special care.support or protection,including the orphaned and vulnerable children.widows or widowers,person with disability.elderly persons or indigent due toa risk of abuse or neglect and who has been identified as such by the relevant government body.

• 3.The objects of this Act shall be to
• (a)provideaframeworkforimprovedhealth outcomes and financial protection in line with the
• right to health and universal health coverage:
• and and
• (b)realign healthcare systems. processes programsforresponsiveness.reliability sustainability ofhealth.care in Kenya:
• (c)enhance the pooling ofresources and risks based
• ontheprinciplesofsolidarity,equityand efficiency so as to guarantee access to health care services to all:and
• (d)promote strategicpurchasingofhealthcare
• services.

PARTII-ESTABLISHMENTOFTHESOCIAL HEALTHAUTHORITY

• 4.(1)There is established an Authority to be known as the Social Health Authority
• (2) The Authority shall be a body corporate with perpetual succession and a common seal and shall.in its corporate name,be capable of
• (a) suing and being sued;
• (b) taking.purchasing or otherwise acquiring.holding
• charging joSusodsppue movableand immovable property:
• (c)receiving.investing.borrowing money:and

Objectrofthe Ael

Establshment of ihc Social Heah Authonity.

• (d)uoing or performing such other things or acts necessary for the properperformance ofits functions under this Act.
• (3)The provisions of the First Scheduleshall have
• effect withrespect to the Authority.
• 5.The functions of the Authority shall be to
• (a)register the beneficiaries in accordance with this
• Act:
• (b)manage the Funds established under this Act:
• (c)receive all contributions and other payments
• required by this Act to be made to theFunds:
• (d)contract health careprovidersandhealthcare facilitiesupon successful certificationby the relevantbody:
• (e)consider and make payments to contracted health care providers and healthcare facilities out of the Funds in accordance to theprovisions of this Act:
• (f)developguidelinesfortheoperationsand implementation of theFunds established underthis Act:
• (g)establish sectoral linkagesfor management and growth of the Funds:
• effective
• (h)monitor and evaluate programs and activities under the Funds:
• ()receive and address complaints thal may arise from the implementation of this Act:
• (j)advise the Cabinet Secretary on matters of social health insurance including the formulationof
• policies:
• (k)implement all govermment policies on social health insurance and related functions:and
• (perform any other function conferred on it by this
• Act orany otherwnitten law.
• 6.(l) The Authority shall have all the powers necessary for the performance of its functions under this Act.

Functons of de Auhonty-

Powen cfhe Aothnity.

• (2)Without prejudice tothegeneralityof the
• foregoing.the Authority shall have power to
• (a)manage.control and administer the assets of the s best promotes the objects for which the Authority isestablished inaccordance with the Public Procurement and AssetsDisposal Act,2015:

Provided that the Authority shall not charge or dispose of any immovable property without the prior approval of the Cabinet Secretary:

• (b)receive any gifts.grants,donations or cndowments 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:
• (c)open a banking account or banking accounts for the Fund with authorization from the National
• Treasury:
• (d)enter into association with such other bodies or organizations.within or outside Kenya.as it may considerdesirableor appropriateandin furtherance of the purpose for which the Fund is
• cstablished:and
• (e)invest the funds of the Funds not immediately required for its purposes in the manner provided in this Act under section 38.
• 7.(1)The Authority shall be managed by a Board which'shall consistof-
• (a)a non-executive Chairperson,who shall be appointed by the President:
• (b)the Principal Secretary in the ministry for the time beingresponsible formatters relating to health or a designated representative:
• (c)the Principal Secretary in the ministry for the time being responsible formattersrelating to finance or a designated representative:
• (d)theDirector-General for Health:
• (e)The Attormey-General Or a designated representative:

The Boand of the Aahorsy.

• (one person,not beinga Governor,nominated by the Council of County Governors with knowledge in field of finance,accounting,health economics. law orbusiness and management:
• (g)one person,not being a public officer with proven experience in matters of health insurance.health financing. financial management, health economics.healthcare administration.
• (h) four persons,not being public officers,nominated by-
• the Kenya Medical Association:
• (ili) health care providers:and
• (i)the informal sector association:
• (iv) the Central Organization of Trade UnionsKenya.
• (2)Themembers ofthe Boardnominatedunder subsection (l)(f.(g)and (h)shall be appointed by the Cabinet Secretary by Notice in the Gazette
• (i)the Chief Executive Officer of the Authority.who shall be an e.x-officio memberof the Board.
• (3)The Chairperson and the members of the Board appointed under subsection (l) shall serve for a term of three years and shall be eligible for re-appointment for one
• further temm of three years.
• (4)In appointing persons as members of the Board under subsection (1) (f).(g)and (h),the Cabinet Secretary shall ensure that the appointments afford equal opportunity to men and women,youth.persons withdisabilities. minorities and marginalized groups and ensure regional balance.
• 8.(I)A person shall be eligible for appointment as a Chairperson or member of the Board under section 7(1xa). (g)and (h) if that person-
• (a) isa citizen of Kenya:
• (b)holds a minimum ofa bachelor's degree from a university recognized in Kenya:
• (c)has knowledge and experience of not less than ten years in data science,information technology.

Qualifications for

appointment

• health governance,health administration.health
• policy.finance or economics,five of which shall be at managerial level:and
• (d)meets the requirements of Chapter Six of the
• Constitution.
• (2)Aperson shall not be eligible for appointment as a memberof theBoardunder section 7if thatperson
• (a)has at any time bcen convicted of a criminal offence and sentenced toa term of imprisonment exceeding six months;
• (b)is declared to be ofunsound mind;
• (c)is an undischarged bankrupt:
• (d)is a director,officer,employee or shareholder of any insurer.broker.insurance agent or any other member of the insurance industry.private health facility:or
• (e)hasbeen found in accordance with any law to have misused or abuseda state office orpublicoffice or in a way to have contravened the provisions of Chapter Six of the Constitution.
• 9.The office of the chairperson or member of the
• Board shall become vacant if the holder-
• (a)resigns from office by notice in writing to the appointing authority:
• (b)is absent from three consecutive meetings of the Board without permission from the appointing authority:
• (c)is adjudged bankrupt or enters into a composition scheme or arangement with his creditors:
• (d) is convictedofa criminal offense and sentenced to imprisonment for a term exceeding six months:
• (e)is incapacitated by prolonged physical or mental illness:
• is otherwise unable or unfit te discharge his duties;
• or
• (g)dies.

Vacnicy of office.

• 10.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.
• 11.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 theperformance of any of the functions or duties of the Board under this Act.
• 12.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 Secretaryinconsultation withtheSalariesand Remuneration Commission.
• 13.(1)There shall be a Chief Executive Officer of the Authoritywhoshall becompetitivelyrecruited and appointed by the Board.
• (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.
• 14.(1) A person shall be qualified for appointment as the Chief Executive Officer of the Authority if that person-
• (a)has a minimum of a bachelor's degree from a
• universityrecognized in Kenya:
• (b) isan Advocate of the High Court ofKenya;
• (c)has at least ten years'knowledge and experience in health insurance, healthfinancing. health economics,healthcare administration or any other relevant field;
• (d)has served in a management level fora period of at least five years;
• (e)has not been convicted of an offence and is not serving a tem of imprisonmcnt:and
• f)meets the requirements of Chapter Six of the Constitution.

Conduet of businessand affainefihe Boanl

Delegalicn by the Burd,

Remuneration of memben,

Appoinament of the Chier Esecutive Officer.

Qoalification for appointment as Chief Executive Offcer.

• (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.
• (3)The ChiefExecutive Officer shall be administrator of the Funds established under this Act.
• (4)Inadministering the Funds referredtoin subsection (3),the Administrator of the Funds shall-
• (a)open and operate such banks with the approval of
• the Board and the National Treasury:
• (b)supervise and eontrolthe day-to-day administration of the Funds established under this Act:
• (c)in consultation with the Board,develop such policies as may be necessary for the attainment of the objects of the Funds established under this Act;
• (d)consult with the Board on matters relating to the administration of the Funds established under this Act:
• (e)cause to be kept books of accounts and other booksandrecordsinrelationtotheFunds established under this Act of all activities and undertakings financed from the Funds:
• ()with the approval of the Board,outsource services and enter into and sign commercial contracts or agreements in furtherance of the objects of the Funds established under this Act:
• (g)prepare.sign and transmit to the Auditor-General. in respect ofcach financial year and within three months after the cnd thereof.a statement of accounts relating to the Funds established under this Act and showing the expenditure incurred from the Funds,and such details as the Public Sector Accounting Standards Board may prescribe fromtimetotime,inaccordancewith the provisions of the Public Finance Management Act and the Public Audit Act:
• (h)prepare quarterly and annual financial and nonfinancial reports in a format prescribed by the

ZIOPION

No.34of2015.

• Public Sector Accounting Standards Board and submit the same to the National Treasury with copiesto the Controller ofBudget and the Commission on Revenue Allocation:and
• (i)implement any recommendations from the Board for policy guidance in furtherance of the objects and purpose of the Funds established under this Act.
• (5)The existing government financial and procurement regulations shall. to the extent they relate to the administration of public funds established under the PublicFinance Management Act.applyinthe administration of the Primary Healthcare Fund.the Social Health Insurance Fund and the Emergency.Chronic and Critical Illness Fund.
• 15.The Chief Executive Officer shall hold office for a period of three years.and shall be eligible for reappointment for one further term of three years.
• 16.(l)There shall be a Corporation Secretary who shall be competitively recruited and appointed by the Board on such terms as the Board may.on the advice ofthe
• (2)Aperson qualifies for appointment asthe Corporation Secretary if that person-
• Salariesand Remuneration Commission,determine.
• (a)holds a bachelor's degree in law from a university
• (b)has at least five years'experience as a corporation
• recognized in Kenya;
• secretary ora similar governance role:
• (c)isa member in good standing of the Institute of Certified Public Secretaries ofKenya:and
• (d)meets the requirements of Chapter Six of the Constitution.
• (6)The Corporation Secretary shall be the Secretary to the Board and shall-
• (a) in consultation with the Chairperson of the Board.
• issue notices for meetings of the Board:
• (b)keep,in custody,the records of the deliberations. decisions and resolutions of the Board:

No.18of2012.

Tenre.of offlce ofihe Chirr Executive Offieer

Corporation Secrrlry.

• (c)transmit decisions and resolutions of the Board to theChiefExecutive Officerforexecution, implementation and other relevant action:
• (d)provide guidance to the Board on their duties and responsibilities on matters relating to govermance;
• and
• (e)perform such other duties as the Board may direct.
• 17.The Board may appoint such staff as may be necessary for the proper discharge of the functions of the Authority under this Act.upon such terms and conditions ofservice as the Board may determine.
• 18.(l)No mater or thing done by a member of the Board or an officer,employee or agent of the Authority shall.if the matter or thing was done in good faith in the execution of the functions or powers of the Authority. render the member.officer.employee or agent personally liable for any action.claim or demand whatsoever.
• (2)Notwithstanding subsection (1).nothing in this section shall exempt a member of the Board,officer, employeeor agent of the Authority fromindividual responsibility forunlawful or criminal actcommitted by the member of the Board,officer.employee or agent of the Authority-
• 19.(1) There shall be a common seal of the Authority which shall be kept in the custody of the Corporation Secretary and shall not be used except on the direction of the Board.
• (2)The affixing of the common seal of the Authority shall be authenticated by the signatures of the Chairperson and the Chief Executive Officer and any document required by law tobemadeunder seal and all decisions of the Board may be authenticated by the signatures of the Chairperson and the Chief Executive Officer.
• (3)The Board shall.in the absence of either the Chairperson or the Chief Executive Officer,in any particular matter,nomimate one member to authenticate the seal of the Authority on behalf ofeither the Chairperson or
• the ChiefExecutive Officer.

Suaff.

Protectionfrom penomalliability.

Common sealof the Auchonty.

PARTII-PRIMARYHEALTHCAREFUND

• 20.There is cstablished a Fund to be known as the Primary Healthcare Fund whoseobject shall be topurchase primary health care services from health facilities.

Esuablishmea a thePnmuey Healchcare Fund,

• 21.There shall be paid into the Primary Healthcare Sources of Funds Fund-
• (a)monies appropriated by the National Assembly:
• (b) any grants,gifts,donations or bequests;
• (c)monies allocated for that purposes from fees or levies administered:and
• d)monies accruing to or received by the Fund from any other source.
• 22.(l) There shall be paid out of the Fund payments object and purpose forwhich the Fund is established.
• (2)The expenditure incurred on the Fund shall be Authority at the beginning of the financial year to which they relate.
• (3)Any revision of the approved budget estimates
• shall bereferred totheBoard for approval.
• 23.The capital of the Fund shall be as appropriated by the National Assembly or from any other source provided
• forunderthis Act.
• 24.The Cabinet Secretary may make regulations for the implementation of thePrimary Healthcare Fund.

PARTIV-THESOCIALHEALTHINSURANCE FUND

• 25.(l)There is established a Fund be known as the Social Health Insurance Fund
• (2)There shall be paid into the Fund-
• (a)contributions under the Act;
• (b)monies appropriated by the National Assembly for
• indigent and vulnerable persons:
• ()gifts,grants,innovative financing mechanisms or donations:

Espendinre of he Fund.

Capital of the

Fund.

Implementation of dkePimry Healtbee Fund.

Euablishment of the Social Health Insurnce Fund.

• (d)funds from the national government.county governments and their respective entities for the administration of the compulsory public service employee's insurance benefit scheme;and
• (e)funds from an employer who is not a national government,acounty governmentortheir respective entities,for the administration of employee benefits.
• 26.(1) Every Kenyan shall register as be a member of Reaaton
• the Social Health Insurance Fund.
• (2)A person who,being anon-Kenyan,and is ordinarily residentin Kenya,shall beeligible for registration as a member of the Social Health Insurance
• Fund.
• (3)A child bom after commencement of this Act shall be registered at birth as a member of the Social Health Insurance Fund.
• (4)Registration shall be conducted continuously at various points in such manner as shall beprescribed by the Cabinet Secretary-
• (5)Any person who is registerable as a member under this Act shall produce proof ofregistration with the Social Health Insurance Fund as a precondition of dealing with or accessing public services from the national govermment, county govemment or a national or county govemment
• entities.
• 27.(l) The following persons shall be liable to contribute to the Fund under this Act-
• (a)every Kenyan household;
• (b)a non-Kenyan resident,ordinarilyresiding in Kenya for a period exceeding twelve months:
• (c)the national govermment:
• (d)the county govemment;and
• (e)any other employer.
• (2)Contributions under this Act shall be paid as follows-
• (a) in the case of a household whose income is derived from salaried employment,by a monthly
• Contributies.

• statutory deduction from the wages or salary by the employer at a rate prescribed under this Act;
• (b) in the case ofa household whose income is not derived from salaried employment,by an annual contribution ofa proportion ofhousehold income as determined by the means testing instrument in the manner-prescribed under this Act:
• (c)in the caseof households in need of financial assistance as determined by the means testing instrument.bythe govemmentat arate apportionedfrom Parliament andCountyAssemblies forthat funds appropriated by
• (d) in the case of persons under lawful custody.by the Govemment from fundsappropriatedby Parliament for that purpose at a rate prescribed under this Act:
• purpose asprescribed under this Act:
• (e)in case ofa person who is a permanent resident in
• prescribed under this Act:and
• (f) in the case of any other person.by the person himself out of his own funds in the manner prescribed under this Act.

shall be paid at the time of Registration.

Provided that the Contributions under this section

• (3)A person referred to in subsection (2)(b) shall pay
• their contributions on an annual basis.
• (4)Aperson shall only access healthcare services under this Act where their contributions to the Social Health Insurance Fund are up to date and active
• for the payment of social health insurance.
• (5)The govermment shallensure that premium financing products are provided for non-salaried persons
• (6)Any person who fails to pay any contribution in payment is due shall be liable to a penalty equal to ten
• respect of any period on or before the day on which percent of the amount due for contribution for the period which the contribution remains unpaid and the total annual contributions.

• (7)A person shall pay all outstanding contributions
• and penalties accruedbeforeresuming access to the healthcare servicesprovided under this Act.

PARTV-THEEMERGENCY.CHRONIC AND CRITICALILLNESSFUND

• 28.There is established a Fund be knownas the
• Emergency.Chronic and Critical IllnessFund to-
• (a)defraythecostsofmanagement ofchronic illnesses after depletion of the social health
• insurance cover:and
• (b) to cover the costs ofemergency treatment.
• 29.The sources of fumds for the Emergency. Chronic Sources f fds and Critical IllnessFund shall be-
• (a)monies appropriated by the National Assembly:
• (b) gifts.grants,donations or endowments;and
• (c)such monies from any other lawful source.
• 30.The Cabinet Secretary may make regulations for the implementation of the Emergency.Chronic and Critical Illness Fund.

PARTVI-BENEFITS,TARRIFS,EMPANELMENT. CONTRACTINGAND CLAIMS

• 31.(l)Every beneficiary shall be cntitled to an
• essential healthcare benefits package prescribed by the Cabinet Secretary in consultation with the Board.
• (2)Notwithstanding the provisions of this Act, nothingshallbe construed topreclude any beneficiary from taking private health insurance cover.
• 32.(1) The benefits payable under this Act shall be Ti based on a tariff.
• (2)The Cabinet Secretary shall,inconsultation with the Board.prescribe the tariffs applicable to the benefits package under this Act.
• (3)The tariffs referred to under subsection (1).may be
• reviewed from time to time.
• 33.(1) The Authority shall make payments out of the Funds to health care providers or health care facilities that

Etabiishmentof ieEmergeney: Chronic imd CrticalHlaess Fund.

Implemematiomo Enierpecy. Curonicd Criticalllness

Fus

Benefies.

Empenelment.

areempaneled and contracted in accordance with the

provisions of thisAct.

• (2)Ahealth care provider or healthcare facility seeking tobe cmpanelled 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.
• (3)Upon the publication of the list of empanelled
• health care providers andhealthcare facilitiesonthe website.theAuthoritymay contract the healthcare providers or healthcare facilities within thirty days of the dateof thepublication of the list.
• (4)The body under subsection (2)may.at any time. revoke any accreditation underthis section.
• (5)Ahealthcareprovider orhealthcarefacility aggrieved by the decision of the body under subsection (2) may appeal to the Dispute Resolution Committee within 30 days of the decision of theBoard.
• 34.(1) The Authority may from time to time negotiate and enter into contracts with healthcare service providers and healthcare facilities who qualifyunder section 33(3) for the provision of health services to the beneficiaries.
• (2)The Authority shall publish on its website and in such other manner as the Authority may deem appropriate. the health serviceproviders and healthcare facilities referred to in subsection (l) to be contracted health service providersforpurposes of thisAct.
• (3)A publication under this section shall be subject to healthcare facility of such criteria,includingmeeting
• fulfillmentbythe healthcare serviceproviderand accordance with section33(2).
• (4)Everycontractedhealthcareproviderand healthcare facility shall be issued with such identification asmaybeprescribed bytheAuthorityand such identification shall be displayed in a conspicuous position.
• (5)The Authority shall terminate the contract with any health care provider and healthcare facility where such health care provider or healthcare facility fails to meet the

Comracting.

• criteriaprescribedbytheCabinetSecretaryunder
• subsection (3).
• (6)Upon termination of a contract under subsection (5)the Authority shall.by notice in the Gazette.revoke the declaration madeunder subsection (3).
• (7)Any health care provider who.or health facility which displays the identification referred to in subsection (4)without permission of the Authority commits an offence.
• 35.(1) There is established within the Authority an office to be known as the Claims Management Office which shall review and process the claims made under this Act.
• (2)The Claims Office shall be responsible for-
• (a)reviewing,processing and validating medical claims from healthcare providers and healthcare facilities:
• (b)appraising medical claims based on the benefit package:
• (c)issuing pre-authorizations for access to healthcare services based on the benefit package;
• (d) developing an e-claims management system:
• (e)undertakingquality assurance surveillancein
• respect ofclaims;
• (f)establishing systems and controls for detecting and identifying fraudappropriate tothe Fund's cxposureandvulnerability:
• (g)sensitizing claimants on the consequences of submitting false and fraudulent claims:
• (h) collecting and analyzing data forpurposes of claim management;
• (i)preparingquarterly reportsonclaimsfor submission to the to the Board and the Cabinet Secretary:and
• (j)performing any otherfunctionsas maybe
• necessary for the better carrying outof its functionsunder this Act.

Clains Management.

• (3)The Claims Management Office shall delegate the
• performance of its functions under subsection (lxa).(b) and (c) to a suitable entity.
• (4)The entity referred to under subsection (3) shall be amedical insurance provider ora broker licensed by the
• Insurance Regulatory Authority under the Insurance Act:

Provided that not more than five entitiesshall be contracted tomanage the claims from the zones identified in the

manner prescribed in the Regulations.

• (4)The Cabinet Secretary shall make regulations for the better carryingout of the provisionsof this section.
• 36.(l) The Authority shall make payments to a contracted healthcare provider or heaithcare facility upon submission of a claim by the Claims Management Office.
• (2)The Cabinet Secretary shall make regulations for the better carrying out of the provisions of this section.

PARTVII-FINANCIALPROVISIONS

• 37.The financial year of the Authority shall be the
• period of twelve months ending on the thirtieth day of June in each year.
• 38.(l) All monies in the Authority which are not immediately required to be applied for the purposesof this
• Act shall be invested-
• (a)in such investment in a reputable bank on the advice of the Central Bank of Kenya.being an investment in which trust funds.or part thereof.
• (b)in government securities as may be approved by the National Treasury.
• are authorized by law to be invested:and
• (2)All investments made under this section shall be held in the name of the Authority.
• 39.All receipts,eanings and accruals to the Authority and the balance of the Funds at the close of each financial year shall be retained by the Authority for the purposesof the Funds.
• 40.(l)The Authority shall.within three months after the end of the financial year,cause to be prepared estimates
• ofits revenue and expenditure for that financial year.

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Asoalcstimun

• (2)The annual estimates shall make provision for all estimated exprnditure of the Authority for the financial year concemed.and in particular shall provide for-
• (a)the payment of all the claims and benefits ofthe contributors in respect of medical and healthcare expenses incurredby them ortheirnamed
• beneficiariespursuant to the provisions of this Act:
• (b)the payment of salaries,allowances and other charges in respect of the staff of the Authority:
• (c)the payment ofpensions,gratuities and other charges in respect of retirement benefits which are payable out of the funds of the Authority:
• (d)the proper maintenance of buildings and grounds of the Authority:
• (e)the acquisition. maintenance, repair and replacement of the equipment and other movable property of the Authority:or
• (the creation of such reserve funds to meet future or equipment,or in respect of such other matters as
• contingent liabilitiesinrespect of retirement benefits,insurance or replacement of buildings or the Authority may consider appropriate.
• (3)The annual estimates shall be approved by the Board before the commencement of the financial year to which they relate and after the approval,the annual estimates shall not beincreased withoutprior consent of the
• Board.
• (4) No expenditure shall be incurred for the purposes ofthe Authority except in accordance with the annual estimates approved under subsection (3)or in pursuance of an authorization of the Board.
• 41.(l) There shall be paid out of the finances of the
• bythe Boardinthe exercise of its powers or the performance of its functions under this Act.
• (2)The administrative expenses referred to under subsection (l)shall not exceed five percent ofthe annual expenditure of the Fund:

idainiiening the

Funds, Provided that the administrative expenses shall not at any time exceed the cost ofbenefits payableunder this Act.

• 42.(l)The Board shall cause to be kept all proper books and records ofaccounts of the income,expenditure. assets and liabilities of the Authority.
• (2) Within three months after the end of each financial year,the Board shall submit to the AuditorGeneral.the accounts of the Authority together with
• (a)a statement ofincome and expenditure of the Authority during the year:and
• (b)statement of the assets and liabilities ofthe Authority on the last day of that year.
• (3)The accounts of the Authority shall be audited and reported upon in accordance with the provisions of the Public Finance Management Act,2012 and the Public
• AuditAct,2015.
• 43.(1) The Board shall,within three months after the end of each financial year,prepare and submit to the Cabinet Secretaryareportofthe operationsof the Authority for the immediately precedingyear.
• (2)The Cabinet Secretary shall.within three months of submission of the report under subsection (l).transmit the report to Parliament.

PARTVIII-DISPUTERESOLUTION COMMITTEE

• 44.(1) A person aggrieved bya decision made under this Act may,within one month from the date of the decision,appeal to the Dispute Resolution Committee for a review of such decision.
• (2)The Committee may uphold.reverse.revoke or
• vary the decision of the Board appealed under subsection (1).
• 45.(1) There isestablished a Committee to be known as the Dispute Resolution Committee for the purpose of hearing and determining complaints,disputes and appeals in accordance with thisAct or any other written law.
• (2)The Committee shall consist of-
• (a)a Chairperson who shall be appointed by the Cabinet Secretary from among persons qualified to be judgesof the High Court:and

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• (b) four other persons who shall be appointed by the Cabinet Secretary and shall possess knowledge and experiencein health.health economics, business administration.insurance and who are not in the cmployment ofthe Government or the Board and are not health service providers.
• (3)The members of the Committee shall hold office for a period of three years andshall be eligible for reappointment for one further term of threeyears.
• (4)The quorum for a meeting of the Committee shall be the Chairperson and two other members.
• (5)Themembers of the Committee shall be entitled to receive such allowances as the Cabinet Secretary.in consultationwiththeSalariesand Remuneration Commission,may determine.
• (6)The Cabinet Secretary shall prescribe procedures for the operationalization of the Committee.
• 46.The office ofa member of the Committee shall
• become vacant if the member-
• (a) dies;
• (b)resigns;
• (c)is unfit by reason of mental or physical infirmity to
• perform the duties of his office:
• (d)is convicted of an offence and is sentenced to a term ofimprisonment for aperiod of six months.or
• more:
• (e)has failed to attend al least three consecutive meetingsofthe Commiltee:or
• (f)is removed from office on any of the following grounds
• (i)gross violation of the Constitution or any other
• written law:or
• (i)gross misconduct or misbehaviour.

PARTIX-MISCELLANEOUSPROVISIONS

• 47.(1)TheAuthorityshall facilitate public participation and stakeholder engagement in the carrying out of its functions under this Act.

Vacancyin de Dispute Resolution

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Stakcholder engagemient.

• (2)The Cabinet Secretary shall prescribe regulations on the modalities ofengaging stakeholders at the national and county level.
• 48.(1) All processes and services under this Act shall be digitized usingappropriate,reliablesecure,interoperable,verifiabie and responsive technology through an information system developed pursuant to the relevant written law.
• (2)The processesandservicesreferred toin subsection (l) shall include-
• (a)registration ofmembers;
• (b)member identification:
• (c)contributions to the Fund;
• (d)empanelment of facilities;
• (e)execution of contracts;
• (f)member identification:
• (g)notification and preauthorization:
• (h) claims management:and
• (i) settlement of claims.
• (3)Every Kenyan shall be uniquely identified for purposes ofprovision of health servicesunder thisAct.
• (4)The digitization of processes and services under this Act shall conform to the provisions of the Data
• Protection Act,2019 and allother relevant laws.
• (5)The Cabinet Secretary shall make regulations for the better carrying out of the provisions of this section.
• 49.(l)Any person who-
• (a)fails without lawful excuse to pay to the Social HealthInsuranceFundwithintheperiod prescribed by this Act any contribution which he or she is liable as a contributing employer to pay under this Act:or
• (b)knowingly makes any deduction from the wages ofthe employee in respect of any contribution which he or she is liable as a contributing

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No.24af2019.

Offencesnd penalties

• employer to pay under this Act.other than a deduction which he or she-is authorized to make bythisAct:or
• (c) for the purposeofobtaining any benefit for himselforherselforforanyother person. knowingly representation,or produces or furnishes,or causes tobeproduced or furnished.any document or information which he or she knows to be false in any material particular,

commits an offence and shall be liable on conviction toa fine not excecding one million shillings or to imprisonment for a term not exceeding three years.or to both.

• (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 shillingsor toboth.
• (3)Any person who,for the purpose of obtaining the payment of any benefit under this Act,knowingly makes any false statement,whether orally or in writing.commits anoffenceand isliable on conviction to afinenot cxceeding one million shillingsor toimprisonment for a lerm notexceeding sixty months,or to both.
• (4)Any person who with intent to obtain the payment ofany benefit under this Act.impersonates any person whetherliving or dead,commits an offence and is liable on conviction to a fine not excceding one million shillings or to imprisonment for a term not excceding three years.or to both.
• (5)A health care provider or health facilitywhich knowingly orfraudulentlyaltersor falsifiesany information with intent to defraud the Authority or to obtain any benefit that it isnot entitled to under this Act. commitsan offence and isliableon conviction to-
• (a)a fine not exceeding five hundred thousand
• shillings:

• (b)suspension:or
• (c)removal fromthe register ofempaneled and
• contracted health care providers,
• (6)The Authority shall cause the name ofevery health care provider or health facility suspended under subsection (5) (b) to be notified in the Gazerte andsuch institution shall not.during the suspension,be entitled to any benefit from the Fund
• (7)The Board shall cause the name of every health
• care provider or health facility removed from the register under subsection (5)(c) to benotified in the Gazene,at least two newspapersof national circulation and at the official website of the Authority.
• (8)A health care provider or health facility which has been removed from the register under subsection (5)(c) shall not beentitled to receiveany benefit from the Authority.
• 50.(l) The Cabinet Secretary shall.in consultation with the Board,make Regulations for the better carrying out of theprovisions of this Acl.
• (2)Despite the generalityof subsection (1).the Cabinet Secretary may make Regulations prescribing
• (a)anymatters incidental tothepayment and collection of any contributions under this Act:
• (b) the amount and rates of contributions payable by
• contributors into the Fund:
• (c)the manner ofthe makingand determination ofthe healthcare benefits package:
• (d)the manner of the making and determination of any claim to any benefit:
• (e) the settlement ofvalid claims.which shall be
• within a period ofonemonth from the date of submission of the claim:and
• (f)the process of enrolment of healthcare providers and healthcare facilities on the list of approved
• healthcare providers and healtheare facilities:
• (g)anythingwhich is required to be prescribed for the better giving effect of the provisions of this Act.

Regulations

• (3)For the purposes of Article 94(6)of the
• Constitution--
• (a)the purpose and objective of the delegation under
• this section is to cnable the Cabinet Secretary to make regulations for better carrying into effect the provisions of this Act:and
• (b) the authority of the Cabinet Secretary to make regulations under this Act shall be limited to bringing into effect the provisions of this Act and fulfilment of the objectives specified under this section.
• (4)The principles and standardsapplicable to the delegated power referred to under this Act are those found
• (a) the Statutory Instruments Act;
• (b) the Interpretation and General Provisions Act:
• (c)the general rules of international law as specified under Article 2(S)of the Constitution:and
• (d)any treaty and convention ratified by Kenya under Article2(6)ofthe Constitution.
• 51.This Act shall prevail in the caseof any inconsistency between this Act and any other legisiation on mattersrelated to provision of social health insurance.
• 52.The provisions of the Insurance Act shall apply lo the Authority only in respect to risk spreading and claims administration services.
• 53.A person convicted of an offence under this Act forwhich no other penalty is prescribed shall be liable to a fine nol exceeding one million shillings or.in the case of a natural person.to imprisonment for a term not exceeding two years,or to both.
• 54.The National Health Insurance Fund Act.1998 is repealed.
• 55.In the event of winding up of any of the Funds established under this Act,the cash balances shall be transferred to the Exchequer while other assets shall be transferred to the National Treasury.

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TRANSITIONALPROVISIONS

• 1.In this Schedule-
• appointed daymeans the day appointed for the coming into operationof the Social Health Insurance Act,2023:
• 2.(1) On the appointed day.all the funds.assets and other property movable and immovable which immediately before that day,were held for and on behalf of the Fund in the name of the National Health Insurance Fund Board shall,by virtue of this paragraph and without further assurance.vest in the Authority
• "Fundmeansthe National HealthInsurance Fund existing immediately before the appointed day.
• (2)Despite subparagraph (l).the Authority may within one year from the appointed day dispose any ofthe assets vested in the Authority
• under subparagraph (1)
• (3) Every public officer having the power or duty to effect or amend any entry in a register relating to property or to issue or amend any certificate or other document effecting or evidencing title to property shall,without payment of a fee or other charge and upon request made by oron behalf of the Authority.do all such things as are by law necessary to give final effect to the transfer of the property mentioned in sub-paragraph
• 3.On the appointed day,all rights,powers.liabilities and duties.
• whether arising under any written law or otherwise.which immediately before the appointed day were vested in.imposed on orenforceable by or against the Govermment for and on behalf of the Fund shall.by virtue of this paragraph.be transferred to,vested in.imposed on or enforceable by oragainst the Authority.
• 4.On and after the appointed day.all actions.suits or legal proceedings pending by or against the Govermment for and on behalf of theFund shall be carried on or prosecuted by oragainst the Authority.
• 5.(l) On the appointed day.the Fund shall not provide enhanced benefits schemes and packages.
• (2)Notwithstanding the provisions of subparagraph (1).all enhanced benefits schemes and packages which immediately before the appointed day.were being provided by the National Health Insurance Fund shall.by

FIRSTSCHEDULE

virtue of this paragraph and without further assurance,vest in the Authority until thelapseof the existing contracts.

• 6.(1)Notwithstanding the provisions of paragraph (2).the National Health Insurance Fund Board shall wind up the Fund within oneyear from transferred to the Authority.
• (2)Despite subparagraph (l).the Boardofthe Socinl Health Authority established under section 4of the Act shall competitivelyrecruit and appoint its staff under section 17of the Act subject to the approved staff establishment and on such terms and conditions-of service as may be determined by the Board.
• (3)Notwithstanding the provisions of subparagraph (l).the staff of the Fund are eligible to apply for the positions advertised by the Authority and may be considered for appointment where they are suitably qualified for the positions advertised
• (4)A staff of the Fund not appointed by the Authority under subparagraph(2) may exercisehis or heroption to either-
• (a)retire from public service:or
• (b)beredeployed within the public service.
• 7.The annual estimates for the Fund for the financial year in which the appointed day occurs shall be deemed to bethe annual estimatesof the Authority for theremainderof that financial year:

Provided that such estimatesmay be varied by the Board of the Authority in such manner as the Cabinet Secretary may approve.

SECONDSCHEDULE

CONDUCTOFBUSINESSANDAFFAIRSOFTHEBOARD

• 1.(1) The Board shall meet not less than four times in
• every financial year and not more than four months shall elapse between the date of one meeting and the date of the next meeting.
• (2)The chairperson may call a special meeting of the Board at any time the chairperson deems fit for expedient transaction of the business of the Board.
• (3)The notice for a meeting of the Board shall be given in writing to each member of the Board at least
• fourteen days before the day of the meeting.
• (4)In the case of a special.or extra-ordinary meeting. anotice of lessthan fourtcen daysnotice shall be considered sufficient.
• (5)Notwithstanding the provisions of subparagraph (2).the chairperson may,upon requisition in writing by at least two thirds of the members,convene a special meeting of the Board at any time for the transaction of the business of the Board.
• (6)The notice to be given under paragraph (2)and (3) shall state-
• (a) the venue and time of the meeting:and
• (b) the agenda with sufficient details of business to be discussed at the meeting.
• (7)The chairperson shall preside at every meeting ol the Board at which the chairperson is present but in the chairperson's absence.the members present shall clect from among themselves a chairperson who shall.with respect to that meeting and the business transacted thereat. have all the powers of the chairperson.
• (8) Unless a unanimous decision is reached,a decision on any matter before the Board shall be by majority votes ofthose present and voting.excluding the DirectorGeneral,and in case of an equal vote.the chairperson or the
• person presiding shall have a casting vote.
• (9)The Board may.with approval of the Cabinet Secretary.co-opt or invite any number of persons to act as advisors orconsultants atany of its meetings or form such

Meetiogs

• committees to perform such functions or duties of the Board astheBoard shall determine.
• (l0)Subject tothe provisions onquorum,no proceedings shall be invalid by reason only ofa vacancy among the membersof the Board.
• (11) Subject to the provisions of this Schedule.the Board may determine itsown procedure and the procedure for any committee of the Board.
• (12)The quorum for the meetings of the Board shall be five members.Co-opted or invited persons shall not be counted in the quorum of the meetings of the Board and shall mot be eligible to vote.
• 2.(l) The Board may establish such committees as it deems appropriate for the performance of its functions.
• (2)A Committee established under sub-paragraph (l) shall elect a chairperson from amongst its members.
• (3)The Board may where it deems appropriate,co-opt or invite any person to attend the deliberations of any of its
• committees.
• (4)All decisions by the commitees appointed under subparagraph (I) shall be ratified by the Board.
• 3.(l)If amember ofthe Board is present ata meeting of the Board or any committce at which any matter isthe subject of consideration and in which matter that person is directly or indirectly interested in a private capacity,that person shall as soon as is practicable before the commencement of the meeting.declare such interest.
• (2)The person making the disclosure of interest under subsection (l)shall not.unless the Board or committee otherwisedirects.takepart in.anyconsideration or.
• discussion of.or vote on any question touching on the matter.
• (3)Apersonwho contravenes subparagraph (l) commitsan offence.
• (4)No member of the Board or officer.employee or agent of the Board shall enter into a service contract or
• trade with the Board

Comminceioftle Bord

Declooreal

luterest

MEMORANDUMOFOBJECTSANDREASONS

Statement of the Objects and Reasons of the Bill

The principal object of the Bill is to put in place a legislative framework to regulate the provision of social health insurance.promote the implementation of the Universal Health Coverage and to ensure that allKenyans have access to affordable and comprehensive quality health

services.

• Part I (Clauses L-3)ofthe Bill provides forthe preliminary provisions and outlines the purpose and objects of the Bill.
• Part I (Clauses 4-I9) of the Bill Establishes the Social Health Authority and provides the Board,its functions.powers.qualification of members and appointment of the Chief Executive Officer among others.

Part Ill (Clauses 20-24) of the Bill provides for establishment of the Primary Healthcare Fund and the attendant sources of its funds.

Part IV (Clauses 25-27)of the Bill provides for establishment of the Social Health Insurance Fund and the attendant sources ofits funds. registration and membership to the fund and contributions.

• Part V(Clauses 28-30)of the Bill provides.for the establishmeni of the Emergency.Chronic and Critical Hllness Fund that will be defray the costs of management of chronic illness after the depletion of the social healthinsurance cover.
• Part V1 (Clauses31-36)of the Bill provides for claims.benefits and empanelment and contracting of health service providers and health facilities and the establishment of the Claims Management Office.
• Part Vll(Clauses37-43)of the Bill providesfor financial provisions including reporting mechanism.audits and accounts.investment and management of funds by the Board
• PART VIll (Clause 44-46)of the Bill provides forthecstablishment of the dispute resolution Comumittee to hear.and determine complaints. disputes and appeals arising from decisionsmadeunder this Act.
• PartIX (Clauses 47-55) ofthe Billscts out the Miscellaneous Provisionscontainsprovisions for stakeholderandcommunity participation in the carrying out of this Act.It also provides for the mandatory requirement of digitization ofall process and services under thisAct.Thispart of the Bill also provides for the power of the Cabinet Secretary to prescribe regulations,and sets out penalties under this Act. the repeal of the NationalInsurance Health Fund Act,1998 and the

handling of cash balances and assets of the Funds in the event of winding

upofany of the Funds established under this Ac

The First Schedule to the Bill details the transitional provisions relating to the former Fund while the Second Schedule to the Bill details the provisions relating to the conduct of business and the affairs of the Board.

Statement on the delegation of legislative powers and limitation of fundamental rightsand freedoms

The Bill confers on the Cabinet Secretary the powers to make regulations under the Act for the purposes of operationalizing the Act in order to implement the objectives.The Bill does not limit any fundamental rights or freedoms.

Statementof how the Bill concerns county governments

The Bill concerns county govemments in terms ofArticle 109(4)of the Constitution as it contains provisions that affect the functions and powers of the county govermments asset out in the Fourth Schedule to the Constitution.

Statement as to whether the Bill is a money Bill within themeaning of

ArticleIl4ofthe Constitution

The enactment of this Bill shall occasion additional expenditure of public funds.

Dated the1Ith September,2023