Agony for deceased civil servants’ kin as Mwangangi defies Treasury on settlement of last expense premiums

Spouses and children of deceased civil servants and National Youth Service (NYS) officers have been left high and dry after Social Health Authority (SHA) CEO Dr Mercy Mwangangi failed to act on a letter by National Treasury Principal Secretary Dr Chris Kiptoo asking SHA to settle Sh8.14 billion in premiums under a contract between the defunct National Hospital Insurance Fund (NHIF) and two insurance companies.

This has incapacitated the National Treasury’s plan to process last expense claims amounting to over Sh4.2 billion.

Also pending are funeral claims amounting to Sh207,300,000, which families of 1,026 deceased civil servants have been pursuing in vain. In addition, 1,267 civil servants who were injured in the course of their work are owed over Sh1.65 billion.

These startling revelations are contained in another letter by National Treasury Principal Secretary Dr Kiptoo to  Dr Mwangangi, dated July 1, which was a follow up on an earlier letter sent to SHA on May 8 as well as letters from Britam Life Assurance Company (Kenya) Ltd and Jubilee Allianz General Insurance (K) Ltd on May 28 regarding the delay.

The two insurers were contracted by the National Treasury and the State Department of Public Service, through NHIF, to provide group life, last expense, work injury benefits and group personal accident insurance cover for civil servants and national youth service officers, in order to enhance its resilient and reach.

In the second letter, Dr Kiptoo implores Dr Mwangangi to expedite the process of paying the families and victims affirming that the government is committed to ensuring the successful execution of the contract, which took effect on April 15, 2021. It covered the periods 2020/2021,2022/2023 and 2023/2024.

According to the PS, while the initiative reflects their shared commitment to safeguarding the welfare of public servants and their families, an outstanding premium of Sh8.14 billion for the three periods has led to challenges by negatively impacting timely processing of claims – directly affecting thousands of families awaiting compensation.

“Recognising the urgency of the matter, the National Treasury has already remitted Kshs 1.585 billion as a sign of goodwill and commitment to resolving the issue. The current outstanding balance now stands at Kshs 6.55 billion,” Dr Kiptoo wrote.

He added that they are actively pursuing Exchequer funding to clear Sh3.93 billion in legacy claims that were reported before the contract commenced, which have already been assessed and verified.

“We are confident that with your continued support, we can work together to expedite settlements, restore confidence in the programme, and demonstrate to our public servants and their families that their wellbeing remains a priority,” Dr Kiptoo said.

It is understood that while claims such as last expense are ordinarily supposed to processed by insurers as quickly as possible – typically 48 hours  after the claim is lodged with the required documents – the affected families are living in agony due to the critical challenges the scheme is facing in getting the claims settled by SHA.

The total amount of premiums pending for the three financial years stands at Sh7,072,012, consisting of last expense claims of Sh4,218,727,353, funeral claims of Sh207,300,000 and injury claims of 2,645,984,948.

According to data seen by The Informer Media Group, there are 361 claims dating back to 2021 and prior amounting to Sh1.065 billion, 305 claims for 2022/2023 amounting to Sh56,100,000 and 360 claims for 2023/2023 amounting to Sh63,200,000.

For group life, there are 344 pending claims for the 2021 and prior period of Sh1,587,930,048, 251 claims for 2022/2023 of  Sh1,300,977,920 and 272 claims for 2023/2024 of 1,445,382,912.

Pending injury claims dating back to 2021 and prior period stand at 831 amounting to Sh1,421,795,605, 121 claims for 2022/2023 amounting to Sh272,748,988 and 74 claims for 2023/2024 of Sh82,124,535.

In addition, there are 233 group personal accident claims for 2021 and prior period amounting to Sh340,391,074.

The data also shows that 137 claims lodged in 2022/2023 amounting to Sh445,961,913 were awaiting supporting documents.

The delays are, however, not isolated. Since it took over from NHIF in October 1 last year, SHA has been facing one crisis after another as a result of the chaotic transition.

At one time, faith-based hospitals threatened to shut down due to delays in settling outstanding debts. They included Sh8 billion that was owed to them with some dating back to 2016.

When it was wound up in December last year, NHIF left SHA with Sh33 billion debt and the delays put a huge strain on health facilities.