More than 400,000 teachers are staring at uncertainty after it emerged that the government did not provide Sh5.3 billion required to maintain critical insurance benefits, exposing educators to financial risks even as questions persist over the transition to the Social Health Authority (SHA).
A report by the National Assembly Education Committee shows that funding for Group Life, Group Personal Accident (GPA) and Work Injury Benefits Act (Wiba) cover was left out of the Teachers Service Commission's 2026/27 budget estimates, despite the importance of the schemes in protecting teachers and their families.
The disclosure comes months after teachers were moved from a privately managed medical insurance arrangement to SHA, a transition that has continued to attract criticism over increased costs and reduced benefits.
In its review of the commission's budget, the committee warned that the omission could leave teachers vulnerable and urged the government to prioritise the allocation.
“There is no provision in the budget for group life, group personal accident and Wiba covers for teachers,” the committee observed in a report on the TSC estimates for 2026/27.
“It is critical that resources are made available to the commission to cater fully for this medical cover since it touches on the well-being of the teachers,” the committee’s report reads.
The committee, chaired by Tinderet MP Julius Melly, noted that TSC had been allocated Sh422.6 billion for the next financial year, with the bulk of the money earmarked for salaries and implementation of collective bargaining agreement commitments.
Lawmakers, however, pointed out that savings realised after the shift from the private medical insurance scheme to SHA could help bridge the gap.
According to the report, the commission saved about Sh4 billion following the transition.
The committee noted that “if this saving is provided by the National Treasury, it could be directed towards providing group life cover for teachers”.
The report also brought to light unresolved financial obligations linked to the previous medical cover arrangement.
Although TSC informed lawmakers that it had no historical pending bills, the committee established that Sh7.4 billion remained unpaid after the expiry of the contract for teachers' medical cover previously managed by Minet.
Of that amount, Sh3 billion was settled through a supplementary budget in the current financial year, leaving Sh4.4 billion outstanding.
The committee further noted that the remaining balance “has not been factored in the 2026/27 estimates”.
For years, teachers received medical allowances that were later converted into a private insurance package administered through the National Health Insurance Fund and offered by a consortium of insurers.
That arrangement came to an end after TSC entered into an agreement with SHA, which took effect on December 1, 2025.
Under the new framework, the private insurance scheme financed through teachers' medical allowances was scrapped. Teachers now contribute to the Social Health Insurance Fund through the mandatory 2.75 per cent deduction from their salaries and are also required to pay service charges under the Public Officers Medical Scheme Fund.
The arrangement has sparked concerns among stakeholders who argue that teachers are now spending more on healthcare while receiving fewer benefits than they did under the previous system.
Kitutu Chache South MP Anthony Kibagendi warned that teachers without private insurance could face serious financial pressure when seeking treatment.
“There is the threat of increased financial burden as individuals who rely on health insurance may face higher out-of-pocket costs, leading to increased financial hardships, especially for low-income families,” he said.
He added that the changes could also affect access to treatment and preventive healthcare, particularly for teachers living with chronic illnesses.
Efforts to obtain a response from Acting TSC Chief Executive Officer Evaleen Mitei on concerns surrounding the deductions and service charges were unsuccessful by the time of publication.
Former Public Service Regulatory Authority Director-General Fazul Mohamed also criticised the arrangement in submissions presented before Parliament.
“It is incomprehensible that a Kenyan teacher is required to pay statutory deductions to SHA and still pay at the point of service under POMSF. That is the very definition of double taxation,” Fazul said.
He argued that the migration to SHA was undertaken without sufficient consultation, public participation or adequate safeguards to protect teachers.
Even so, Fazul maintained that teachers still have an opportunity to negotiate better terms through their unions.
He challenged teachers’ unions to ensure their members and dependants “get a deal that is good”.
He further argued that if private medical insurance is being phased out, medical allowances should be reinstated to shield teachers from additional healthcare costs.