The National Health Insurance Authority Act (the “Act”) was passed by the National Assembly in 2021 and assented to by President Muhammadu Buhari in May 2022, thus, launching a drive for an inclusive health care system in Nigeria.
The Act repealed the National Health Insurance Scheme Act Cap N42, 2004, which was enacted in 1999. The Act’s objective is to effectively implement a national health insurance policy that ensures the attainment of national health coverage. The overriding attribute of the Act is that it makes health insurance compulsory for all Nigerians and legal residents.
In this article, we will highlight the Act’s key provisions and our thoughts on the implications of the Act for employers, employees, and government agencies.
The Act establishes the National Health Insurance Authority (the “Authority”), as the body corporate saddled with the responsibility (i) to promote, integrate, and regulate all health insurance schemes that operate in Nigeria; (ii) to ensure that health insurance is mandatory for every Nigerian and legal resident and that every Nigerian enjoys the basic minimum package of health services; (iii) to grant accreditation and re-accreditation to Health Maintenance Organisations (HMOs), Mutual Health Associations (MHAs), Third Party Administrators, and Healthcare Facilities amongst others.
The Act establishes a Governing Council (the “Council”) which is responsible for (among other functions) approving licenses, regulating, and supervising HMOs, MHAs and other institutions as the Authority may determine; and for regulating and supervising the various health insurance schemes established under the Act. The members of the Council are appointed by the President on the recommendation of the Minister of Health.
The Act mandates every State in Nigeria and the Federal Capital Territory to establish and implement a State Health Insurance and Contributory Scheme to provide health care for their residents. The Act also requires every resident of Nigeria to obtain health insurance. Under the Act, “residents” is defined to include a) all employers and employees in the public and private sectors with five staff and above; b) informal sector employees; and c) all other residents of Nigeria.
The Authority is tasked with establishing a health insurance scheme for public sector workers in the Federal Civil Service and other relevant groups. Private Health Insurance Schemes are required by the Act to be registered as limited liability companies or limited by guarantee. The Act further requires, as a precondition for registration and licensing by the Authority, that a Private Health Insurance Scheme keeps a security deposit (in an amount to be determined by the Authority from time to time) in an interest-yielding account with an accredited bank as security for the duration of their operations.
The Act establishes the role of Third-Party Administrators (TPAs) which will be registered by the Authority to ensure patient satisfaction through relevant mechanisms and perform other administrative functions that will facilitate the implementation of the State Health Insurance Schemes. TPAs are defined by the Act as “any organisation with expertise and capability to administer all or a portion of the insurance claims process, including administration of claims, collection of premiums, enrolment and other administrative activities….”.
