Since SHA began earlier this month, many Kenyans have voiced confusion over the amount to be deducted and how contributions should be calculated. In response, SHA Chief Executive Officer Elijah Wachira released a statement detailing the requirements to clear up any misunderstandings.
The SHA deduction rate for individuals with a monthly salary is 2.75% of their gross income, meaning the total amount an employee earns, including the basic salary and any regular allowances, will determine the deduction. According to SHA regulations, employers must remit this contribution to SHA by the ninth day of each month.
Wachira explained that each employee’s SHA contribution should reflect their specific income level rather than a set or uniform amount across all employees.
He emphasized that deductions should be based strictly on each individual’s gross monthly salary, including both their salary and fixed allowances. The SHA CEO cautioned employers against making a uniform deduction for all employees, as this would not comply with SHA’s requirements.
The clarification was necessary following reports of delays in remitting SHA deductions by some employers.
Some employers were reportedly uncertain about how to calculate the deductions, resulting in delays as they awaited clearer instructions. Wachira’s statement aims to ensure that employers understand the accurate procedure for remitting deductions to SHA.
Additionally, Wachira announced that SHA contributions qualify for tax relief, allowing contributors to benefit from a reduced tax burden.
He encouraged individuals to seek further guidance on this from the Kenya Revenue Authority (KRA), as it can provide details on how to apply and qualify for the tax relief. This additional benefit could make the SHA scheme more appealing to salaried individuals, who now know that their contributions to health insurance can result in tax savings.
Health Principal Secretary Harry Kimtai also spoke on the SHA rollout’s initial challenges, acknowledging that some issues were expected. Kimtai reiterated that the 2.75% deduction rate applies to all salaried workers.
For individuals without a stable monthly income, SHA will use a means-testing tool to determine fair monthly premiums based on each person’s financial ability. The aim is to make SHA affordable for all Kenyan households, regardless of their income level.
Kimtai mentioned that SHA’s rollout has been smooth in many counties, with the government actively working to register as many Kenyans as possible. He noted that they are partnering with local county governments to encourage enrollment and educate people about SHA benefits.
The government also aims to address any challenges that arise, ensuring that the SHA scheme provides better health benefits than the previous National Health Insurance Fund (NHIF) scheme.
These clarifications come as the government seeks to smooth the transition to SHA and make healthcare more affordable and accessible for all Kenyans. By ensuring that each individual’s contribution is accurately calculated and offering tax relief, SHA aims to offer more value to participants than NHIF, with a focus on comprehensive and reliable coverage.
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