Transition Turmoil

NAIROBI – Kenya's new Social Health Authority (SHA) is facing a significant legal challenge that threatens to further complicate the country's ambitious transition to universal health coverage. On Friday, October 24, 2025, the Kenya Union of Commercial, Food and Allied Workers (KUCFAW) announced its intention to sue the SHA, accusing the authority of systematically excluding staff from the defunct National Health Insurance Fund (NHIF) in its ongoing recruitment drive.

In a statement, KUCFAW Secretary General Andrew Kinyua asserted that the recruitment process violates the Social Health Insurance Act of 2023. The Act, which officially replaced the nearly 60-year-old NHIF with the SHA on October 1, 2024, contains transitional clauses specifically mandating that former NHIF employees be given priority consideration for roles within the new structure to ensure continuity and retain institutional knowledge. The union claims that over 80% of the former NHIF workforce is at risk of being unfairly dismissed. "Despite the explicit provisions of the SHIF Act, there is a deliberate effort to kick out most NHIF employees," Kinyua stated on Friday. KUCFAW has issued a 72-hour ultimatum to the SHA board to address these concerns, failing which they will seek to have the entire recruitment process declared a violation of the law.

Conflicting Assurances and Stark Realities

The union's allegations contrast sharply with previous government assurances. Top officials, including Health Cabinet Secretary Aden Duale, had publicly stated that no NHIF staff would lose their jobs during the transition. The initial plan involved seconding all 1,737 former NHIF employees to the SHA for a six-month period under the Public Service Commission (PSC), during which suitability assessments would determine their permanent placement. Those not absorbed by the SHA were to be redeployed within the wider public service, retaining their existing pay grades and remuneration.

However, information that emerged earlier in 2025 has cast doubt on these promises. The Ministry of Health disclosed to a parliamentary committee that the PSC had approved a final staff establishment of only 815 positions for the SHA. This cap means that 922 former NHIF employees—more than half the original workforce—will not be integrated into the new authority and must be redeployed elsewhere, a process whose specifics remain unclear. This revelation appears to be the primary driver of the current standoff, fueling fears among former staff that the 'suitability assessments' are a pretext for mass layoffs. The union has pointed to the recent appointments of senior SHA leadership, where few former NHIF executives were selected, as evidence of this exclusionary trend.

Broader Implications for Kenyan Healthcare

This labour dispute adds another layer of complexity to the already turbulent rollout of the SHA. The transition, aimed at creating a more equitable and efficient healthcare financing system, has been beset by numerous challenges since its inception. Healthcare providers have reported significant technical glitches with the new digital portal, severe delays in claims processing, and confusion over patient verification, leading some to revert to manual systems. This has placed considerable financial strain on hospitals, with billions of shillings in outstanding claims from both the old NHIF and the new SHA systems.

The public has also experienced confusion regarding registration and benefits, with many automatically migrated to the new system without clear communication. Furthermore, funding shortfalls have been reported, with the Ministry of Health noting in February 2025 that only a fraction of registered contributors were actively paying into the new Social Health Insurance Fund (SHIF), threatening its financial sustainability.

KUCFAW warns that sidelining the experienced NHIF workforce could cripple the new authority before it finds its footing. "A majority of NHIF employees possess the skills, experience and understanding of social health protection systems. Replacing them with new recruits who will require retraining risks undermining the efficiency and continuity of health insurance services,” Kinyua argued. The outcome of this dispute will have significant ramifications not only for the livelihoods of hundreds of public servants but also for the stability and effectiveness of Kenya's healthcare system at a critical juncture of reform.