Convert Workers’ Medical Allowances to Insurance, Expert Urges Employers
Employers in both the organized private and informal sectors have been advised to convert staff medical allowances into health insurance premiums to comply with the National Health Insurance Authority (NHIA) Act 2022.
Otunba Lekan Ewenla, Managing Director and CEO of Ultimate Health Management Services, made the call during the launch of the Group, Individual, and Family Social Health Insurance Programme (GIFSHIP) in Lagos. He noted that the 2022 Act makes health insurance mandatory for all Nigerians and legal residents, requiring any employer with at least five staff members to enroll them.
Cost-Neutral Compliance
Addressing concerns over the financial burden on businesses, Ewenla explained that compliance does not necessarily require fresh expenditure. Instead, employers can adopt the model used by the Federal Government in 2005, where 10% of civil servants’ basic salaries—previously paid as medical allowances—were redirected as insurance premiums.
“Compliance does not mean spending more on employees’ healthcare,” Ewenla stated. “Employers can simply convert existing medical allowances into insurance premiums. This reduces out-of-pocket spending for workers while significantly boosting productivity.”
The GIFSHIP Advantage
The newly launched GIFSHIP package, regulated by the NHIA, offers a robust benefit plan for an annual premium of N38,718 per person. The program is designed to provide equitable and affordable healthcare across three levels of care, utilizing standardized NHIA tariffs for secondary and tertiary services.
Ewenla emphasized that the Act now empowers the NHIA to approve and code all private insurance products, ending the era of arbitrary premium reductions and unapproved benefit packages.
Targeting the Informal Sector
Despite the mandatory nature of the law, stakeholders expressed concern over the low enrollment rates, particularly in the informal sector. Dr. Austin Aipoh, President of the Healthcare Providers Association of Nigeria, noted that while 60% of Nigerians operate in the informal sector, nearly 99% of them remain without structured health financing.
“The informal sector is not unorganized,” Dr. Aipoh remarked. “There are associations and leadership structures that can be engaged to drive enrollment and ensure the full enforcement of the NHIA Act.”
The Federal Government has set an ambitious target to enroll 40% of the population by 2030, a move experts believe will improve Nigeria’s health indices and help curb the migration of healthcare professionals abroad.
