Nigeria: Implementation of universal healthcare coverage

Employer Action Code: Act

A long-standing objective of the Nigerian government has been to establish universal healthcare coverage for its large and growing population (over 220 million in 2023). To this end, the National Health Insurance (NHI) Act enacted in 2022 requires all residents to obtain a minimum basic package of health insurance coverage, where residents are defined as all employers and employees in the public and private sectors with five staff and above, informal sector employees and all other residents, with the target of achieving universal coverage by 2030. Implementation guidelines were released in October 2023.

Key details

• The act authorizes states to establish and implement State Health Insurance and Contributory Schemes and requires all residents of Nigeria to have a minimum basic package of health insurance coverage through the applicable state scheme (where established).
• The act repeals the prior NHI legislation and replaces the National Health Insurance Scheme (NHIS), established in 1999, by a new National Health Insurance Authority to regulate the state schemes and private insurance and oversee the administration of a basic minimum package of health services to be covered by all health insurance providers.
• Under the guidelines, there are three types of insurance schemes: contributory public/state/organized private sector schemes; non-contributory schemes (for low-income households); and supplementary private health insurance for costs not covered by mandatory health insurance and complementary insurance (providing enhanced coverage of mandatory benefits). Private insurance will be managed by accredited health maintenance organizations (HMOs) or one of five models of international health insurance plans in conjunction with an HMO. All visitors to Nigeria will be required to have travel insurance.
• The new guidelines establish the basic coverage package to be provided and clarify the roles and responsibilities of stakeholders in the new system. Employer/employee contribution rates for the private sector will be the same as they were for the NHIS, i.e., 10% and 5% of monthly salary, respectively, with the option for employers to cover employee contributions or make extra contributions for additional benefits.
• Coverage applies to the employee, a spouse and up to four biological children under age 18. If both parents are employed, each parent can enroll up to four children. Additional dependents or children over age 18 can be enrolled based on additional contributions by the principal beneficiary. A waiting period of 60 days applies before new enrollees can access services. Patients have free choice of approved providers for primary care.
• In Lagos (the most populous state), the state scheme is the ILERA-EKO Social Health Insurance Program, established in 2015. The Lagos government recently announced that all local employers must obtain a Corporate Identification Number (CIN) by registering with the Lagos State Health Management Agency and enroll their employees in the state scheme for the basic package before procuring any supplemental private health coverage. HMOs in Lagos may not provide healthcare plans to companies that do not have a CIN.

Employer implications

As few employers and their staff were enrolled in the NHIS, over 90% of employers surveyed provide comprehensive private health insurance benefits to employees and their families. Coverage typically includes inpatient, outpatient, emergency, dental and vision care at 100% reimbursement up to certain limits. Employers should review the requirements under the NHI Act to register and enroll employees in the applicable state scheme and review their options for supplemental/complementary insurance. Employers with employees in Lagos must obtain a CIN.