The Social Health Insurance Act, no. 16 of 2023

1. This Act may be cited as the Social Health Insurance Act, 2023 and shall come into force on such d ate as the Cabinet Secretary may designate by notice in the Gazette.

2. In this Act, unless the context otherwise interpretation, requires— “Authority” means the Social Health Authority establi shed under section 4; “ beneficial '” 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 ; (e) has not attained the age of twi nty=flve years, i s university, college, school or other educational 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; “ B oard” means the B oard of the Soci al H ealth Authority constituted under section 7; “ Cabinet Secretary” means the Cabinet Secretary for the time being responsible for matters relating to health ; 457 20 23 So c i a l H ea l th I n su r a n c e N o . 16 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 Management ( i Office establi shed under section 35; critical illness” means a serious and potentially life- i i threatening condition that demands urgent medical intervention and can have a substantial impact on a person’s health, well-being and quality of life; contracting” means the entering into a formal 4 4 agreement with an empaneled health care provider or healthcare facility for purposes of provision of services; contributor” means a person liable to contribute to 44 the Fund as provided under section 27; Di spute Resolution Tribunal ” means the Tribunal 4 4 establ i shed under section 44 ; Emergency , Chronic and Critical Illness Fund 44 9 9 means the fund established under section 28; means the necessary 4 4 .9 9 emergency treatment immediate health care that must be administered to prevent death or worsening of a medical situation; empanelment” means enrolment of a health care 4 4 provider into the li st of health care service facilities approved by the Board; employer” has the meaning assigned under the 4 4 N o .l l o f 20 0 7 . Employment A ct , 2007 ; F u nd s means the Pri mary Healthcare Fund 44 99 establ i shed under section 20 , the Soci al H eal th I nsurance Fund established under section 25 and the Emergency , C h ro n i c and C r i ti c al I l l ness F u nd estab l i sh ed u n d er sec t i o n 28; health care provider” has the meaning assigned to it 44 under the H eal th A ct , 20 17; N o . 2 1 o f 20 17 . healthcare services” has the meaning assigned to it 44 under the H eal th A ct , 20 17 ; N o . 2 1 o f 20 17 . household” means a social unit comprising of an 44 eligible contributor , whether contributing by self or paid f or , and their benef i ciaries, or w ho share the same soc i al - 458 N o . 16 So c i a l H ea l th I n su r a n c e 2023 economic needs associated with consumption and production; “ indigent” means a person who is poor and needy to the extent that the person cannot meet their basic necessities of life; i “ means testing” means a method that uses the Means Testing Instrument to determine whether an individual o r a household has the ability to pay for their social health insurance premium; “ Means Testing Instrument” means a set of indicators that capture various socio-economic aspects of an individual or a household for purposes of conducting a means te sting; “medical insurance provider” has the meaning assigned to it under the Insurance Act, Cap. 487; “ Primaiy Healthcare Fund' means the Fund established under section 20; “primaiy health care” means essential health care based on practical, scientifl cally sound and socially acceptable methods and technology that is made universally accessible to Individuals and families In the community at levels 1, 2 and 3 of health services, to m e e t their health needs at every stage of the life cycle, w ith thei r full participation and at an a^ ordable cost to the community and the county ; “spouse” means the wife or husband of a eontributo r; “tarif ” means the rates or fees that are paid to healtheare faeilities or healtheare providers for serviees i overed under this Aetj “ Universal Health Coverage’ means that al l i ndi vi dual s and comm unities recei ve the health ser v i ces they need including the full spectrum of essential , quality hetdth services from health promotion to prevention, treatment, rehabilitation, and palliative care without suffering financial hardship; and “ vulnerable person” means a person who needs special care, support or protection, including the orphaned an d vulnerable children, widows or widowers, person with disability, elderly persons or indigent due to a risk o f ab u se 459 2023 So c i a l H ea l th I n su r a nc e N o . 16 or neglect and who has been identified as such by the relevant government body.

3. The obj ects of this Act shall be to— Obj ects of the A ct . (a) provide a framework for improved health outcomes and financial protection in line with the right to health and universal health coverage; (b) realign healthcare systems, , processes and programs for responsiveness, reliability and sustainability of health care in Kenya; (c) enhance the pooling of resources and risks based on the principles of solidarity, equity and efficiency so as to guarantee access to health care services to all ; and PAHT n - EST A BL l SH M ENT OF T H E SOCI A L H E A L T H A UT H ORI T Y

4. (1) There is established an Authori ty to be known a s the Soeial Health Authori ty. Autherity. perpetual sueeesslon and a eommon seal and shall , In Its eharglng and disposing of ntovabli and ifl lf ovablg pfopgfiyi (g) fi ggiving and borrowing lf ongyi and (d) doing or performing such other things or acts necessary for the proper performance of its f u nc ti o n s u n d er th i s A ct . (3) The provi sions of the First Schedule shall have effect with respect to the Authority.

5. The functions of the Authority shall be to— F u nc t io n s o f the A uthority . (a) register the benefi ciaries in accordance with this A ct ; (b) manage the Funds established under this A ct; 4 0 U N o . 16 S o c ia l H ea l th I n su r a n c e 2023 (c) receive all contii butions and other payments required by this Act to be made to the Funds; (d) empanel and: contract health care providers and healthcare facilities upon inspection, licensing and certification of the health care providers and healthcare facilities by the relevant body; (e) consider and miake payments to contracted health care providers .and healthcare f acilities out of the Funds in accordance to the provisions of this Act; (f) develop guidelines for the operations and implementation of the Funds established under this A ct ; (g) establish s<;ctoral linkages for effective management and growth of the Funds; (h) monitor and evaluate programs and activities under the Fu nds; (i) receive an^l address complaints that may arise from the imiplementation of this Act; (j) advise the Cabinet Secretary on matters of social health insu rance including the formulation of policies; (k) implement all government policies on social health insurance and related functions; and (1) perform any other function conferred on it by this Act or any other written law.

6. (1) Tbie Authority shall have all the powers Po w er s o f th e A uthori ty . necessary f or t he performance of its functions under th i s A ct . (2) Without prej udice to the generality of the foregoing, the Authority shall have power to— (a) manage, control and administer the assets of the Authiority in such manner and for such puipose as best promotes the objects for which the Authori ty is established in accordance with the Public PrcKiurement and Assets Disposal Act, 2015; No . 33 of 20 15. Provided that the Authori ty shall not charge or di spose of any immovable property without the pri or approval of the National Assembly; 46 1 2023 Social Health I nsurance N o , 16 (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; (c) open a banking account or banking accounts for the Fund with authorization from the National Treasury; and (d) enter into association with such other bodies o r organizations, within or outside Kenya, as it may consider desirable or appropriate and in furtherance of the purpose for which the Fund is estab l i sh ed .

7.(1) The Authority shall be managed by a Board TheB o ar d o f t he w hich shal l consi st of — Authori ty. (a) a non-executive Chairperson, who shall be appointed by the President; (b) the Principal Secretary in the ministry for the ti m e being responsible for matters relating to health o r a designated representative; (c) the Principal Secretary in the ministry for the ti m e being responsible for matters relating to if nanceo r a designated representative; (d) the Director-General for Health; (e) a representative of the County Executive Committee Health Caucus; (f) one person, not being a Governor, nominated by the Council of County Govern ors with knowledge in if eld of if nance, accounting, health economics, law or business and management; (g) one jjerson, not being a public offi cer with proven experience in matters of health insurance, health if nancing, if n anc i al m anagem ent , health economics, healthcare administration. (h) four persons, not being public offi cers, nominated by - (i) the Kenya Medical Association; (ii) the informal sector association; 462 So c i a l H ea l th I n su r a n c e 2023 N o . 16 (iii) the consortium of healthcare providers; and (iv) the Central Organization of Trade Unions- K enya. (i) the Chief Executive Officer of the Authority, who shall be an ex-of f icio member of the Board. (2) The members of the Board nominated under subsection (1) (f), (g) and (h) shall be appointed by the Cabinet Secretary by Notice in the Gazette. (3) The Chairperson and the members of the Board appointed under subsection (1) shall serve for a term of three years and shall be eligible for re-appointment f o r o n e further term 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 with disabilities, minorities and marginalized groups and ensure regional b al an ce . Qual ifi cations f or

8. (1) A person shall be eligible for appointment as a appointment Chairperson or member of the Board under section 7(l )(a), (g) and (h) if that person— (a) is a citizen of Kenya; (b) holds a minimum of a bachelor’s degree from a university recognized in K enya; (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 (d) meets the requirements of Chapter Six of the C o n sti tu ti o n . (2) A person shall not be eligible for appointment a s a member of the Board under section 7 if that person— (a) has at any time been convicted of a criminal offence and sentenced to a term of impri sonment exceeding six months; (b) i s decl ared to be of unsound mind; 4 63 2 02 3 Social Health I nsurance N o . 16 (c) is an undischarged bankrupt; (d) is a director, officer, employee or shareholder o f any insurer, broker, insurance agent or any other member of the insurance industry; o r (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 Consti tuti on .

9. The office of the chairperson or member of the vacancyo f o f if c e . 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 lawful cause; (c) is adjudged bankrupt or enters into acomposition scheme or arrangement with his creditors; (d) is convicted of a criminal offence and sentenced t o imprisonment for atermexceeding six months; (e) is incapacitated by prolonged physical or mental illness; (f) isotherwiseunableor unfit to dischargehisduties; o r (g) dies.

10. The conduct and regulation of the business and C o n d uct of affairs of the Board shall be as provided in the Second af a"rrof'the Schedule, but subject thereto, the Board may regulate i ts Board, ow n procedure.

11. The Board may, by resolution either generally or Delegation by the in any particular case, delegate to any committee of th e Board or to any member, officer, employeeor agent o f th e Boardtheexerciseof any of thepowersor theperformance of any of the functions or duties of the Board under th i s A ct .

12. The chairperson and members of the Board shall b e R em uneratio n o f paid such remuneration, fees, allowances and such other m em ber s . reimbursements as may be approved by the Cabinet Secretary in consultation with the Salaries an d Remunerati on Commission. 464 N o . 16 So c i a l H ea l th I n su r a n c e 2023

13. (1) There shall be a Chief Executive Of ficer of the Authority who shall be competitively recruited and E x ec u t iv e O f f icer . appointed by the Board. (2) The Chief Executive Officer shall hold of fice on such terms as the Board may, on the advice of the Salaries and Rem unerati on Comm i ssion , determ ine.

14. (1) A person shall be qualified for appointment a s Qual if ication for appointment as the Chief Executive Off icer of the A uthority if that C h ief E xec u t iv e O f f ic er . p er so n — (a) has a minimum of a -m aster ’s degree from a university recognized in K enya; (b) has at least ten years' knowledge and experience i n health insurance, health financing, health economics, healthcare admini stration or any other relevant f ield ; (c) has served in a management level for a period of a t least if ve year s; (d) has not been convicted of an offence and i s not serving a term of imprisonment; and (e) meets the requirements of Chapter Six of the C o n st i tu ti o n . (2) The Chief Executive Officer shall , subj ect to the directions of the Board, be responsible for the day to day management of the aff airs and staff of the Board. (3) The Chief Executive Of ficer shall be admi nistrator o f th e F u n d s est ab l i shed u nd er th i s A ct . (4) In administering the Funds referred to in subsection (3) , the A dmi ni strator of the Funds shall — (a) open and operate such banks with the approval of the Board and the National Treasury ; (b) supervi se and control the day-to-day ad m i n i str ati o n o f th e F u n d s est ab l i sh ed u n d er th i s A ct ; (c) in consultation with the Board, develop such policies as may be necessary for the attainment of the obj ects of the Funds established under thi s A ct; (d) consult with the Board on matters relati ng to the ad m i n i str at i o n o f th e F u n d s est ab l i sh ed u nd er th i s A ct ; 46 5 20 2 3 So c i a l H ea l th I n su r a n c e N o . 16 .(e) cause to be kept books of accounts and other book s and records in rel ati on to the Fund s establi shed u nder thi s A ct of al l activi ti es and undertakings financed f rom the Funds; iff) with ‘the approval of the Board, enter into and sign contracts or agreements in furtherance of the obj ects of the Funds established under this Act; (g) prepare, sign and transmit to the Auditor-General , in respect of each if nancial year and within three months after the end thereof , a statement of accounts relating to the Funds established under (this Act and showing the expenditure incurred from t he Funds, and such details as the Public Sector Accounting Standards Board may prescribe from ti me to time, in accordance with the provisions of the Public Finance Management Act N o . 18 o f 20 12 . N o . 34 o f 20 15 . and the Publ i c A udi t A ct ; (h) prepare quarterly and annual if nancial and non- financial reports in a format prescribed by the Public Sector Accounting Standards Board and submit the same to the National Treasury with copies to the Controller of Budget and the Comm i ssion on Revenue A l locati on ; and (i) implement any recommendations from the Board for policy guidance in furtherance of the obj ects and purpose of the Funds established under this A ct . (5) The existing government if nancial and procurement regulations shall , to die extent they relate t o the administration of public f unds established under th e Public Finance Management Act, apply in the N o . 18 o f 20 12 . administration of the Primary Healthcare Fund, the So c i al Health Insurance Fund and the Emergency, Chronic and C r i ti c al I l l ness F u nd . (6) The administrator of the Funds under sub-section (3), shall ensure that the monies held in the Primary Healthcm-e Fund, the Social Health Insurance Fund and th e Emergency, Chronic and Critical Illness Fund, including any earn ings or accruals, are spent only for the purposes f o r w h i c h t hese F u n d s are estab l i sh ed . 400 N o . 16 Social H ealth I nsur ance 2023

15. The Chief Executive Officer shall hold office for a Tenure of offi ce o f t he C h ief period of three years and shall be eligible for re- E x ec ut i v e O f if c er . appointment for one further term of three years.

16. (1) There shall be a Corporation Secretary who corporation shall be competitively recruited and appointed by the B o ar d on such terms as the Board may, on the advice of the Salaries and Remuneration Commission, determine. (2) A person qualifies for appointment as the Corporation Secretary if that person— (a) holds a bachelor’s degree in law from a university recognized in Kenya; (b) is an Advocate of the High Court of Kenya; (c) has at least five years’ experience as a corporation secretary or a similar governance role; (d) is a member in good standing of the Institute of Certified Public Secretaries of Kenya; and (e) meets the requirements of Chapter Six of the C o n sti tu ti o n . (3) The Corporation Secretary shall be the Secretary to the B oard and shal l — (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; (c) transmit decisions and resolutions of the Board t o the Chief Executive Officer for execution, implementation and other relevant action; (d) provide guidance to the Board on their duties and responsibilities on matters relating to governance; an d (e) perform such other duties as theBoard may direct.

17. The Board may appoint such staff as may be Staf f . necessary for the proper discharge of the functions o f th e Authority under this Act, upon such terms and conditions of service as the Board may determine upon the advice o f the Salaries and Remuneration Commission. 467 2 0 23 So c i a l H ea l t h I n su r a n c e N o . 16 . Pr o tec ti o n f r o m

18. ( 1) No matter or thing done by a member of the personal liability. Board or an officer , employee or agent of the A uthority shall, if the matter or thing*%^as done in good faith i n the execution of the functions or powers of the Authority, render the member, officer, employee or agent personally li able for any action, claim or demand whatsoever . (2) Notwithstanding subsection ( 1) , nothing in thi s section shall exempt a member of the Board, officer, employee or agent of the Authority from individual responsibility for unlawful or criminal act committed by the member of the Board, officer, employee or agent of t h e A uthority . C o m m o n seal o f

19. ( 1) There shall be a common seal of the A uthority the A uthority . which shall be kept in the custody of the Corporation Secretary and shall not be used except on the direction of the B o ar d . (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 to be made under seal and all decisions of the B o ar d may be authenticated by the signatures of the Chairperson an d th e C h i ef E x ecu ti v e O f f i cer . (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 t h e seal of the A uthority on behalf of either the Chairperson o r th e C h i ef E x ec u ti v e O f f i cer . PA R T III — PR I M A R Y H E A L T H C A R E F U N D E stab l i sh m ent o f 2 0 . T h er e i s estab l i sh ed a F u nd to b e k n o w n as th e the Primary Primary Healthcare Fund whose obj ect shall be to purchase H ealt hc are F u nd . primary health care services from health facilities. So u rc es o f F u nd s .

21. There shall be paid into the Primary Healthcare 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 admi ni stered ; and (d) monies accruing to or received by the Fund from any other source. 468 N o . 16 Social H eal th I nsur ance 2023

22. (1) There shall be paid out of the Fund payments Expenditure of the in respect of any expenses incurred in pursuance of th e obj ect and purpose for which the Fund is established. (2) The expenditure incurred on the Fund shall be limited to annual budget estimates prepared by the Authority at the beginning of the financial year to w hich they relate. (3) Any revision of the approved budget estimates by the Board shall be approved by the National Assembly i n the supplementary budget estimates.

23. Thecapital of theFund shall be asappropriated by capital of the the National Assembly or from any other source provided for under thi s A ct .

24. The Cabinet Secretary shall in consultation with i mplementation of the Board make regulations for the implementation of the S^ES und Primary Healthcare Fund. PART l V- -Tl if SOCIAL HEALTH INSURANCE F UND

25. (1) There is established a Fund be known as the E stab l i sh m ent o f Social Health Insurance Fund. th e So c i al H eal t h I nsurance Fund . (2) There shall be paid into the Fund— (a) contributions under the Act; (b) monies appropri ated by the National Assembly for indigent and vulnerable persons; and (c) gifts, grants, innovative financing mechanisms o r d o n ati o n s.

26. (1) Every Kenyan shall register as a member of Regisimtion. the Social Health Insurance Fund. (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 . (3) A child bom af ter commencement of this Act shall be registered at bitt h as a member of the Social Health I nsurance Fund . (4) Registration shall be conducted continuously at vari ous points in such manner as shall be prescri bed by t he Cabinet Secretary. 4 69 2023 So c i a l H ea l th I n su r a n c e N o . 16 (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 a s a precondition of dealing with or accessing public services fr om the national government, county government or a national or county government entities. (6) A person who is a non-Kenyan that intends to enter and remain in the territory of Kenya for a period o f 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. (7) The Cabinet Secretary shall establish the policy, regulatory or administrative measures to give effect t o su b section (6) .

27. (1) The following persons shall be liable to C o n tri b ut io ns . contri bute to the Fund under thi s A ct — (a) every Kenyan household; (b) a non-Kenyan resident, ordinarily residing in Kenya for a period exceeding twelve months; (c) the national government; (d) a county government; and (e) any other employer. (2) Contributions under this Act shall be paid as f ol low s— (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; (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 thi s Act; (c) in the case of households in need of fi nancial assistance as determined by . the means testing insfr ument, by the government at a rate apportioned from funds appropriated by Parliament and County Assemblies for that purpose as prescribed under this Act; 4 70 N o . 16 So c i a l H ea l th I n su r a n c e 20 23 (d) in the case of persons under lawful custody , by t h e Government from funds appropri ated by Parliament for that purpose at a rate prescribed under thi s A ct ; (e) in case of a person who is a permanent resident i n K enya, by such person at a rate as may be prescribed under this A ct; and (f) in the case of any other person, by the person h i m sel f out of h i s o w n f u nd s i n th e m an ner prescribed under thi s A ct . Pr o v i d ed th at th e co n tr i b u ti o n s u n der th i s sec ti o n sh al l be paid at the time of regi stration. (3) A person referred to in subsection (2)(b) shall p ay thei r co n tr i b u t i o n s o n an an nu al b asi s. (4) A person shall only access healthcare services u n d er th i s A ct w h er e th ei r co n tr i b u t i on s to the So c i al Health Insurance Fund are up to date and active. (5) The government shall ensure that premium f inancing products are provided for non-salaried persons for the payment of social health insurance. (6) A ny person who fail s to pay any contribution in respect of any period on or before the day on which payment i s due shall be liable to a penalty equal to t w o percent of the amount due for contribution for the period which the contribution remains unpaid and the total an n u a l co n tr i b u ti o n s . (7) A person shall pay all outstanding contributions and penalties accrued before resuming access to the healthcare services provided under this A ct . PA RT V - T H E EM ERGENCY , CH RONI C A ND C R I T I C A L I L L N E SS F U N D 2 8 . T her e i s estab l i sh ed a F u n d b e k n o w n as th e E stab l i sh m ent o f the Emergency , Emergency , Chronic and Critical Illness Fund to— C h r o n ic and C r it ical I l l ness F und . (a) defray the costs of management of chronic illnesses after depletion of the soci al health i nsurance cover ; and (b) to cover the costs of emergency treatment . 47 1 2023 So c i a l H ea l th I n su r a n c e N o . 16

29. The sources of funds for the Emergency, Chronic So ur ces o f f u nd s . an d C r i ti c al I l l ness F u n d sh al l b e — (a) monies appropriated by the National Assembly; (b) gifts, grants, donations or endowments; and s.. ... (c) such monies from any other lawful source.

30. The Cabinet Secretary shall in consultation with Implementation of Emergency , the Board make regulations for the implementation of t h e C h ro ni c and Emergency , Chronic and Critical Illness Fund. C r i t ic al I l l ness F u nd . PART VI - BENEFI TS, TARRI ES, EM PANEL M ENT , CONTRA CTIN G A ND CL A IM S

31. (1) Every beneficiary shall be entitled to an B enef i t s. essential healthcare benefits package prescribed by t h e Cabinet Secretary in consultation with the Board. (2) Notwithstanding the provisions of this Act, nothing shall be construed to preclude any beneficiary f r o m taking private health insurance cover .

32. (1) The benefits payable under this Act shall be T ar if f s. b ased o n a tar i f f . (2) The Cabinet Secretary shall , in consultation with the Board, prescribe the tariffs applicable to the b en ef i t s package under thi s A ct . (3) The tariffs referred to under subsection (1), may b e r ev i ew ed f r o m ti m e to ti m e .

33. (1) The Authority shall make payments out of the Empanelment . Funds to health care providers or health care f acilities t h a t are empaneled and contracted in accordance with the provi sions of this A ct . (2) A health care provider or healthcare facility seeking to be empanelled under the A ct shall make an application to the body responsible for accreditation f or quality of care in the manner prescribed by the Cabinet Secretary . (3) Upon the publication of the list of empanelled health care providers and healthcare facilities on t h e website and in the Kenya Gazette, the Authority may contract the healthcare providers or healthcare f acilities within thirty days of the date of the publication of t h e l i st . 472 N o . 16 So c i a l H ea l t h I n su r a n c e 2023 (4) The body under subsection (2) may, at any time, revoke any accreditation under thi s section. (5) A healthcare provider or healthcare facility aggrieved by the decision of the body under subsection (2) may appeal to the Di spute Resolution Tribunal within thirty days of the deci sion of the Board. Contracting.

34. (1) The Authority may from time to time negotiate and enter into contracts with healthcare service providers and healthcare f acilities who qualify under section 33(3) for the provision of health services to the beneficiaries. (2) The A uthority shall publi sh on its website and i n such other manner as the Authority may deem appropriate, the health service providers and healthcare facilities referred to in subsection ( 1) to be contracted health ser v i ce providers for purposes of this A ct . (3) A publication under this section shall be subj ect t o fulf illment by the healthcare service provider and healthcare facility of such criteri a, including meeting quality standards set by the Cabinet Secretary in accordance with section 33(2) . (4) Every contracted health care provider and healthcare facility shall be issued with such identification as may be prescribed by the A uthority and such identi f i cation shall be di spl ayed i n a conspicuous posi tion . (5) The A uthority shal l terminate the contract with an y health care provider and healthcare facility where su ch health care provider or healthcare f acility fail s to m e e t t h e criteri a prescribed by the Cabinet Secretary under subsection (3) . (6) Upon termi nation of a contract under subsection (5) the A uA ority shall , by notice in the Gazette, revoke t h e declaration made under subsection (3) . (7) A ny health care provider who, or health f acility which displays the identif ication referred to in subsection (4) without permission of the A uthority commits an o f f en ce and is liable upon conviction to a fine not exceeding o n e million, or to imprisonment for a term not exceeding t w o years or to both.

35. ( 1) There i s establi shed within the A uthority an C lai m s M anagement . office to be known as the Claims M anagement Off ice m o 2023 Social H eal th I nsurance N o . 16 which shall review and process the claims made under th i s A ct . (2) The Claims Office shall be responsible for— (a) reviewing, processing and validating medical claims from healthcare providers and healthcare f aci l ities; (b) appraising medical claims based on the benefit package; (c) issuing pre-authorizations for access to healthcare services based on the benef it package; (d) developing an e-claims management system; (e) undertaking quality assurance surveillance in respect of claims; (f) establishing systems and controls for detecting an d identifying fraud appropriate to the Fund’s exposure and vulnerability; (g) sensitizing claimants on the consequences of submitting false and fraudulent claims; (h) collecting and analyzingdatafor purposesof claim m anagement ; (i) preparing quarterly reports on c l ai m s f o r submission to the to the Board and the Cabinet Secretary ; and (j) performing any other functions as may be n e c e ssa r y for the better carrying out of its f unctions under thi s A ct . (3) The Claims Management Office may delegate the performance of its functions under subsection 2(a) and (b) to a suitable entity . (4) The entity referred to under subsection (3) shall b e a medical insurance provider and a claim settling agent a s defined and licensed by the Insurance Regulatory Authority Cap. 487. under the I nsurance A ct : Provided that a suitable number of entities shall be contracted to manage the claims from the zones identified in the manner prescribed in the Regulations. (5) The Cabinet Secretary shall make regulations for the better carrying out of the provisions of this section. 4 /4 N o . 16 Social H eal th I nsur ance 2 023

36. (1) The Authority shall make p ay m en t s to a Set tlem ent o f contracted healthcare provider or healthcare facility u p o n c lai m s . submission of aclaimby theClaimsManagement Office. (2) The Cabinet Secretary shall make regulations for the better carrying out of theprovisions of this section. PART VII - FINANCIAL PROVISIONS

37. The financial year of the Authority shall be the Financial year. period of twelve monthsending on thethirtieth day o f Ju ne in each year.

38. All receipts, earningsandaccrualstotheAuthority R etenti o n of and the balance of the Funds at the close of each financial year shall be retained by the Authority for the purposes o f th e F u n d s.

39. (1) The Authority shall, within three months after A nnual estimates. theendof thefinancial year, causetobepreparedesti m ates of its revenue and expenditure for that financial y e ar . (2) The annual estimates shall make provision for all estimated expenditure of the Authority for the financial year concerned, and in particular shall provide for- (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 beneficiariespursuant to theprovisionsof thisAct; (b) the payment of salaries, allowances and other chargesin respect of thestaff of theAuthority; (c) the payment of pensions, gratuities and other charges in respect of retirement benefits which a r e payableout of thefundsof theAuthority; (d) the proper maintenance of buildings and grounds of the Authority; (e) the acqui sition. maintenance, repair and replacement of the equipment and other movable property of the Authority; or (f) the creation of such reserve funds to meet future o r contingent liabilities in respect of retirement benefits, insurance or replacement of buildings o r equipment, or in respect of such other matters a s theAuthority may consider appropriate. - T / U 20 23 So c i a l H ea l th I n su r a n c e N o . 16 (3) The annual estimates shall be approved by the Board before the commencement of the financial year t o which they relate and after the approval , the annual estimates shall not be increased without prior consent o f th e B o ar d . (4) No expenditure shall be incurred for the purposes of the Authority except in accordance with the annual estimates approved under subsection (3).

40. (1) There shall be paid out of the if nances of the eringthe Authority such administrative expenses as may be incurred F u nd s , by the Board in the exercise of its powers or the performance of its functions under this Act. (2) The administrative expenses referred to under subsection (1) shall not exceed if ve percent of the an nu al expenditure of the Fund. A cco u nts and

41. (1) The Board shall cause to be kept all proper aud i t . books and records of accounts of the income, expenditure, assets and li abilities of the A uthority . (2) Within three months after the end of each if nancial year, the Board shall submit to the Auditor- General , the accounts of the Authority together with— (a) a statement of income and expenditure of the Authority during the year; and (b) statement of the assets and liabilities of the Authority on the last day of that year . (3) The accounts of the Authority shall be audited an d reported upon in accordance with Ae provisions of the n o . i s of 20 12 . Public Finance Management Act , 2012 and the Public N o . 34 o f 20 15 . A udi t A ct , 20 15 .

42. (1) The Board shall , within three months after th e Annual report, end of each financial year, prepare and submit to the Cabinet Secretary a report of the operations of the Authority for the immediately preceding year. (2) The Cabinet Secretary shall , within three months of submission of the report under subsection (1), transmit the report to Parliament. PART VI I I - DI SPUTE RESOL UTI ON TRI BUNAL

43. (1) A person aggrieved by a decision made under this Act may, within one month from the date of the N o . 16 Social H eal th I nsur ance 20 2 3 decision, appeal to the Dispute Resolution Tri bunal f or a review of such deci si on . (2) The Tri bunal may uphold, reverse, revoke or vary the decision of the Board appealed under subsection ( 1) . (3) A person who is not satisfied with an order made by the Tribunal under subsection (2) may appeal to th e High Court within twenty-one days from the date the o r d er i s m ad e .

44. (1) There is established a Tri bunal to be known a s E stab l i sh m ent o f the Dispute Resolution Tri bunal for the purpose of heari ng Dispute R eso l u ti o n and determining complaints, disputes and appeals in T r i b un al . accordance with this Act or any other wri tten law. (2) T he T ri bunal shal l consi st of — (a) a Chairperson who shall be appointed by the President from among persons qualified to be j udges of the High Court; and (b) four other persons who shall be appointed by the Judicial Service Commi ssion and shall p o sse s s knowledge and experience in health, health economics, business administration, insurance and who are not in the employment of the Government or the Board and are not health service providers. (3) The members of the Tribunal shall hold office for a period of three years and shall be eligible for reappointment for one further term of three years. (4) The quorum for a meeting of the Tribunal shall b e the Chairperson and two other members. (5) The members of the Tribunal shall be entitled to receive such allowances as the Cabinet Secretary, in consultation with the Salaries and Remuneration Commission, may determine. (6) The Cabinet Secretary shall prescri be procedures for the operationalization of the Tri bunal .

45. The office of a member of the Tribunal shall vacancyi n t he becom e vacant i f the mem ber — D ispute R eso l ut io n T r i b u nal . (a) dies; (b) resigns; 477 2023 So c i a l H ea l th I n su r a n c e N o . 16 (c) is unfit by reason of mental or physical infirmity t o perform the duties of hi s off ice; (d) i s convicted of an of f ence and i s sentenced to a term of imprisonment for a period of six months or m o re ; (e) has failed to attend at least three consecuti ve meetings of the Tribunal ; or / (f) is removed from offi ce on any of the following grounds— (i) gross violation of the Constitution or any other w ritten l aw ; or (ii) gross mi sconduct or mi sbehaviour . P A R T I X - M I SC E L L A N E O U S P R O V I SI O N S

46. (1) The Authority shall facilitate public Stak eho lder eng agem ent . participation and stakeholder engagement in the carrying o u t o f i t s f u n c ti o n s u n d er th i s A c t . (2) The Cabinet Secretary shall prescribe regulations on the modalities of engaging stakeholders at the national and county level .

47. (1) All processes and services under this Act shall D igitization. continue to be digitized using appropriate, reliable, s e c u r e , inter-operable, verifi able and responsive technology through an information system . (2) The processes and services referred to in subsection ( 1) shall include— (a) regi stration of members; (b) mem ber identi if cati on ; (c) contributions to the Fund; (d) empanelment of facilities; (e) execution of contracts; (f) member identifi cation; (g) notifi cation and preauthorization; (h) clai ms management; and (i) settlement of claims. 478 N o . 16 So c i a l H ea l th I n su r a n ce 20 23 (3) Every Kenyan shall be uniquely identified for purposes of provision of health services under this A ct . (4) The digitization of processes and services under N o . 24 o f 20 19 . this Act shall conform to the provisions of the Data Protection Act , 20 19 and all other relevant laws. (5) The Cabinet Secretary shall make regulations for the better carrying out of the provisions of this section.

48. (1) Any person who— O f f ences and penalties. (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 (b) knowingly makes any deduction from the wages of the employee in respect of any contribution employer to pay under this Act, other than a deduction which he or she is authorized to make (c) for the pu^ se of obtaining any benefi t for knowingly makes any false state ment or representation, or produces or Amishes, or causes to be produced or fo mlshed, any document or Information which he or she knows to be false In commits an offence and shall be liable on conviction to a if ne not enceedlng two million shillings or to Impri sonment for a term not enceeding thre e years, o r to both. (2) A person who misappropriates any of the funds or assets of the Fund, or assists or causes any person t o misappropriate or apply funds, otherwise than in the manner provided in the A ct , conunits an of fence and sh al l upon conviction, be liable to imprisonment for a term n o t exceeding five years or to a fine not exceeding ten m i l l i o n shillings or to both. (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, co m m i t s 4 79 20 23 So c i a l H ea l t h I n su r a n c e N o . 16 an o f f en ce and i s l i ab l e o n co nv i ct i o n to a f i ne n o t exceeding one million shillings or to impri sonment f o r a term not exceeding sixty months, or to both. (4) Any person who with intent to obtain the payment of any benefit under this Act, impersonates any person whether living or dead, commits an offence and is liable o n conviction to a fine not exceeding one million shillings o r to impri sonment for a term not exceeding three years, o r t o b o th . (5) A health care provider or health facility which knowingly or fraudulently alters or falsifies any information with intent to defraud the Authority or t o obtain any benefit that it is not entitled to under thi s A ct , comm i ts an of f ence and i s l i able on conv iction to — (a) a fine not exceeding two million shillings; (c) removal from the register of empaneled and (6) The Authority shall cause the name of every health (5) (b) to be notifi ed In the Qaa tte and such institution f rom the Fund . (7) The Board shail cause the name of every heaith care provider or heaith facility removed fb m the register under subsection (i )(c) to be notifi ed in the Q&mm i at least two newspap rs of national circulation and at the ofi cial website of the Authority: (S) A health care provider or health facility which has been removed from tne register under subsection (5) (e) shall not be entitled to receive any benefit from the A uthori ty .

49. (1) The court before which any person is convicted of an of fence under this Act may, without prej udice to any A ct . civil remedy, order such person to pay to the Authori ty, a s the case may be, the amount of any contri bution or a n y other sum that w as not obtai ned in a l aw f ul m anner , together with any penalty found to be due from such p er so n to the Authori ty and any sum so ordered shall be recoverable as a f ine and paid into the Funds. 4 80 N o . 16 So c i a l H ea l th I n su r a n c e 2023 (2) All sums due to the Authority shall be recoverable as debts due to the Authority, and without prej udice to any other remedy, may be recovered by the Authority summari ly as a civil debt . (3) All criminal and civil proceedings under this Act may, without prej udice to any other power in that behalf , be instituted by any authorized officer of the Authority. (4) All sums recovered by legal proceedings in respect of monies which should have been paid into the Funds shall , when recovered, be paid into the Funds. (5) Despite any other written law, the assets of the Funds shall not be liable to attachment under any process o f l aw .

50. ( 1) The Cabinet Secretary shall , in consultation Regulations, with the Board, make Regulations for the better carrying out of the provi sions of thi s A ct . (2) Despite the generality of subsection (1), the Cabinet Secretary may make Regulations prescribing— (a) any matters incidental to the payment and collection of any contributions under this Act; (b) the amount and rates of contributions payable by contributors into the Fund; (c) the manner of the making and determination of the healthcare benefits package; (d) the manner of the making and determination of any claim to any benefi t; (e) the settlement of valid claims; (f) the process of enrolment of healthcare providers and healthcare facilities on the list of approved healthcare providers and healthcare facilities; and (g) anything which is required to be prescribed for th e better giving ef fect of the provisions of this Act. (3) For the purposes of Article 94 (6) of the C o n sti tu t i o n — (a) the purpose and obj ective of the delegation under this section is to enable the Cabinet Secretary to make regulations f or better carrying into effect the provi sions of this A ct; and 48 1 2023 So c i a l H ea l th I n su r a n c e N o . 16 (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 obj ectives specified under this sect i o n . (4) The principles and standards applicable to the delegated power referred to under this Act are those f o u n d i n- No . 23 of 20 13. (a) the Statutory Instruments Act; Cap. 2. (b) the Interpretation and General Provisions Act; (c) the general rules of international law as specified under Article 2(5) of the Constitution; and (d) any treaty and convention ratified by Kenya under Art icle 2(6) of the Constitution. Conf l lei w ith

51. This Act shall prevail in the case of any other law N. inconsistency between this Act and any other legislation o n matters related to provision of social health insurance.

52. The provisions of the Insurance Act shall apply to § ^ the Authority only in respect to claims administration

53. A person convicted of an offence under this Act for which no other two years, or to both. ef NeJ ef

54. The National Health Insurance Fund Act, 190S Is

55.In the eve’-: of winding up of any of the Funds ^ '"ding up. establi shed under this A ct , the cash balances shall b e transferred to the Exchequer while other assets shall b e transferred to the National Treasury . 4 82 N o . 16 Socia l H eal th I nsur ance 2023 F I R ST SC H E D U L E i s.4(3)) T RAN SI T I ONA L PROVI SI ONS

1. I n thi s Schedule— "appointed day" means the day appointed for the coming i n to operation of the Social Health Insurance Act, 2023; "Fund" means the National Health Insurance Fund existing immediately before the appointed day.

2. (1) On the appointed day, all the funds, assets and other property movable and immovable which immediately befo re that day , were held for and on behalf of the Fund in the name of the National H ealth I nsurance Fund Board shall, by virtue of this paragraph and without f ur th er assurance, vest in the Authority. (2) Every public officer having thepower or duty to ef f ect or amend any entry in a register relating to property or to issue or amend any certifi cate or other document effecting or evidencing title to property, shall, without payment of afee or other charge and upon request made by _on behalf of the Authority, do all such things as are by law necessary to o r give if nal 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 or enforceable by or against the Government for and on behalf of the Fund shall , by virtue of this paragraph, be transferred to, vested in, imposed on or enforceable by or against the Authority.

4. On and aft er the appointed day, all actions, suits or legal proceedings pending by or against the Government for and on behalf of theFund shall becarried on or prosecuted by or against the Authority.

5. (1) On the appointed day, the Fund shall not provide enh an ced benefi ts schemes and packages. (2) Notwithstanding the provisions of subparagraph ( 1) , all enhanced beneif ts schemes and packages which immediately before the appointed day, were being provided by the National Health Insurance Fund shall , by virtue of this paragraph and without further assurance, v est i n th e Authority until the lapse of the existing contracts.

6. (1) Notwithstanding the provisions of paragraph (2) , the National Health InsuranceFund Board shall wind up theFund within one year from 4 83 2023 So c i a l H ea l th I n su r a n c e N o . 16 the appointed day and the cash balances and all other asset s sh al l b e transferred to the A uthority . (2) Despite subparagraph (1), the Board of the Social H eal th Authority established under section 4 of the Act shall competitively recruit and appoint its staff under section 17 of the Act subject to the approved staf establ i shm ent and on such term s and conditions of service as may be determined by the Board. (3) Notwithstanding the provisions of subparagraph ( 1), the staf of the Fund are eligible to apply f or the positions advertised by the Authority and may be considered for appointment where they are suitably qualified for the positions advertised. (4) Despite the provisions of sub-paragraph (2) and (3) , the A uthority shall review the qualifications of all the staf of A e Fund and shall , i n the appointment of its staf , give priority to the staff o f the F u n d w h o are found to be suitably qualified for the positions in the approved staf estab l i sh m ent . (5) A staf of the Fund not appointed by the Authority u nd er subparagraph (2) may exercise his or her option to ei th er — (a) retire from public service; or (b) be redeployed 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 be the annual esti m ates of the Authority for the remainder of that financial year: Provided that such estimates may be varied by the Board o f th e Authority in such manner as the Cabinet Secretary may ap p r o v e . 4 84 N o . 16 Social H ea lth I nsur ance 2023 SECOND SCH ED UL E (s.10) CONDUCT OF BUSINESS AND AFFAIRS OF THE B OA RD

1. (1) The Board shall meet not less than four times i n Meetings. every financial year and not more than four months sh al l elapse between the date of one meeting and the date o f 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 daysbeforetheday of themeeting. (4) In the case of a special, or extra-ordinary meeting, a notice of less than fourteen days’ notice shall be considered sufficient . (5) Notwithstanding the provisions of subparagraph (2), the chairperson may, upon requisition in writing by at least two thirdsof the members, convene a special meeting of the Board at any time for the transaction of the busi ness of the Board. (a) thevenueand timeof themeetlnf ; and dlseussed at the meeting. (7) The chairperson shall preside at every meeting o f the Board at which the chairperson is present but in th e chairperson’s absence, the members present shall elect 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 o n any matter before the Board shall be by the concurrence of a majority of all the members present and voting at th e meeting. (9) The Board may, with approval of the Cabinet Secretary, co-opt or invite any number of persons to a c t a s 4 85 2023 So c i a l H ea l th I n su r a n c e N o . 16 advisors or consultants at any of its meetings or form su ch committees to perform such functions or duties of the; B oard as the B oard shal l determ i ne. (10) Subj ect to the provisions on quorum, no proceedings shall be invalid by reason only of a vacancy among the members of the Board. (11) Subj ect to the provisions of this Schedule, the Board may determine its own 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 n o t b e counted in the quorum of the meetings of the Board an d shall not be el igible to vote. C o m m it tees of t he

2. (1) The Board may establish such committees as it B o ar d . deems appropriate for the performance of its functions. (2) A Committee established under sub-paragraph (1) 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 co m m i ttees . (4) All decisions by the committees appointed under subparagraph (1) shall be ratified by the Board. D isc l o su re of

3. ( 1) If a member of the Board is present at a I n terest . meeting of the Board or any committee at which any m a t t e r is the subj ect of consideration and in which matter t h at person is directly or indirectly interested in a private capacity, that person shall as soon as is practicable b e f o r e the commencement of the meeting, decl are such interest . (2) The person making the disclosure of interest under subsection (1) shall not, unless the Board or committee otherwise directs, take part in any consideration or, di scussion of , or vote on any question touching on t h e m atte r . (3) A person who contravenes subparagraph (1) co m m i ts an o f en ce . (4) No member of the Board or officer, employee or agent of the Board shall enter into a service contract o r tr ad e w i th th e B o ar d . 4 86 N o . 16 Social H ea lth I nsur ance 20 23 (5) A disclosure of intere st made under this paragraph shall be re corded in the minutes of the meeting at w h i ch i t i s m ad e .

4. The Board shall cause minutes of all re solutions an d M i n utes proceedings of meetings of the Board to be entered i n books kept for that purpose.