NHIF on spot for 'irregular' tendering of multi-billion insurance cover for civil servants, NYS staff

National Health Insurance Fund (NHIF) headquarters in Upper Hill, Nairobi. [Jonah Onyango, Standard]

A decision by the National Health Insurance Fund (NHIF) to re-advertise a multi-billion shilling tender has put it in the crosshairs of the Ministry of Public Service.

NHIF floated the tender for the insurance of civil servants and National Youth Service (NYS) against the guidance of the ministry.

It has emerged that NHIF's decision to extend the tender for a period of three months went against the advice of the ministry, which sought to have the tender extended for a year.

On Tuesday, NHIF advertised for the provision of co-insurance and facultative insurance services for the Work Injury Benefits Act (WIBA) and Group Personal Accident (GPA) for civil servants and National Youth Service (NYS) staff.

The insurance was to cover 120,047 officers comprising 81,388 civil servants, NYS employees, and 38,659 devolved staff.

According to documents, the move could have the ripple effect of exposing the government to higher premiums and shows that the move was against the ministry's advice that NHIF extends the contract for one year from April 2023 to April 2024.

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

The letter dated May 12 noted that the guidance by the Ministry was based on advice from the Insurance Regulatory Authority (IRA) "who are the advisors of the transaction on this matter."

"The IRA wrote to us on April 26, 2023, and advised that the cover be extended for one year to avoid the government being disadvantaged with higher premiums. This office, therefore, reiterates that the cover should be extended for one year and not three months," stated Gathecha.

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

A source further revealed that as of June 30, 2023, the NHIF will be required to pay commercial insurance companies Sh6.9 billion owed to them at a time the Fund was already grappling with surging pending bills.

All eyes are now on NHIF whose move to bid for an open tender insurance cover for its staff and a consortium tender instead for civil servants has raised eyebrows.