Relief for Ex-NHIF Employees as PSC Orders SHA to Retain Staff

Hundreds of former employees of the defunct National Hospital Insurance Fund (NHIF) have received a major reprieve after the Public Service Commission (PSC) directed the Social Health Authority (SHA) to retain them during the ongoing transition to the country’s new health insurance system.

The move follows months of uncertainty among former NHIF workers after the government dissolved the agency and replaced it with SHA under the Universal Health Coverage reforms. Many employees had feared losing their jobs, being redeployed to lower positions, or suffering salary cuts as the transition unfolded.

According to PSC chairperson Anthony Muchiri, the commission resolved that all former NHIF staff will remain in service under SHA for at least six months as the authority completes its recruitment and restructuring process. The arrangement is aimed at ensuring continuity of services and operational stability within the health sector.

The decision comes amid growing legal and labour disputes surrounding the transition. Out of the 1,737 workers who served under NHIF before its dissolution, only 815 had initially been absorbed into SHA, leaving hundreds facing an uncertain future.

Court Battles and Legal Intervention

The situation escalated into court battles after affected workers accused the government of unfair treatment and threatened salary reductions through redeployment to lower job grades. The Employment and Labour Relations Court later intervened, directing that former NHIF employees retain their salaries and benefits even after redeployment.

In a landmark ruling, Justice Byram Ongaya ordered that no employee should suffer financial loss due to structural changes within the public service. The court further directed PSC and SHA to revise deployment letters to clearly indicate that redeployed employees would continue earning their previous NHIF salaries.

Impact on Workers and Health Reforms

The ruling and PSC directive are expected to ease anxiety among workers who had spent months in limbo following the transition from NHIF to SHA. Some employees had complained that proposed redeployments would slash their salaries significantly despite years of service in the public health insurance sector.

Health sector reforms under SHA remain one of President William Ruto’s flagship programmes aimed at achieving universal health coverage. However, the transition has faced criticism over operational challenges, delayed payments, staffing disputes, and concerns about preparedness.

President Ruto had previously assured NHIF staff that no worker would lose employment during the transition, promising that those not absorbed into SHA would be redeployed elsewhere within the public service.