Is Health Insurance Mandatory for Employers in Nigeria? (NHIA Act)

Since 2022, health insurance in Nigeria is no longer optional. The National Health Insurance Authority (NHIA) Act makes health insurance mandatory for every resident, and it places clear duties on employers. If you run a business, here is what the law says and what you need to do.

This article is a general summary, not legal advice. Speak to a lawyer or your state health insurance agency about your specific situation.

What is the NHIA Act 2022?

The National Health Insurance Authority Act was signed into law in May 2022. It replaced the National Health Insurance Scheme (NHIS) Act of 1991 and created the National Health Insurance Authority to regulate health insurance, HMOs and third-party administrators in Nigeria. Its goal is universal health coverage, so that Nigerians don’t have to pay for healthcare out of pocket when they fall ill.

Is health insurance mandatory in Nigeria?

Yes. Under Section 14 of the Act, every person resident in Nigeria is required to obtain health insurance. Section 13 defines residents to include employers and employees in the public and private sectors with five or more employees, as well as workers in the informal sector.

Do employers have to provide health insurance?

Yes. If you employ five or more people, you must provide health insurance for your staff, whether you are in the public, private or informal sector. In practice, this means you should:

1. Register your business and employees with your state health insurance scheme, or provide cover through an NHIA-accredited HMO.
2. Pay contributions as set by your state scheme. Contribution rates are set at state level.
3. Keep records showing that your staff are covered.

Many employers go further than the minimum by buying a private HMO plan with wider benefits, such as more hospitals, specialist care, maternity care and wellness checks.

What are the penalties for not complying?

Section 48 of the Act sets out offences and penalties. According to KPMG’s commentary on the Act, a first offence can attract a fine of ₦1,000,000, up to two years in prison, or both, with higher penalties for repeat offences. Check the Act or ask a lawyer for how these apply to you.

What about vulnerable people?

The Act creates a Vulnerable Group Fund (Section 25) to pay for health insurance for people who cannot afford it, including children under five, pregnant women, the elderly, people with disabilities and the poor. It is funded partly by the Basic Health Care Provision Fund, a health insurance levy and a tax on telecommunications.

Why it makes business sense

• Healthier, more productive staff. Quick access to care means fewer and shorter sick days.
• Better hiring and retention. Health insurance is one of the most valued staff benefits in Nigeria.
• Predictable costs. A plan replaces unexpected medical bills and staff loans with a fixed premium.
• Compliance. You meet your legal duty under the Act.

How to choose a health plan for your staff

• Check that the HMO is accredited by the NHIA.
• Look at the hospital network near your offices and where staff live.
• Compare benefit limits, waiting periods and exclusions.
• Decide whether to include families. Covering spouses and children improves staff wellbeing and retention.
• Ask about support. A dedicated account manager and an app for staff make the plan easier to run.

Reliance HMO offers small business plans for teams of 3 to 19 staff, from ₦68,400 per person per year, and company health plans for larger organisations, with a key account manager for every business.

Frequently asked questions

Is health insurance compulsory for small businesses in Nigeria?
Yes, if you have five or more employees. The NHIA Act applies to the public, private and informal sectors.

Does the NHIA Act apply to individuals?
Yes. Section 14 requires every resident of Nigeria to have health insurance. See health insurance for individuals and freelancers.

How much does health insurance cost per employee?
It depends on the plan and number of staff. Group plans usually cost less per person than individual plans. See how much is HMO in Nigeria?

What happened to the NHIS?
The NHIA Act 2022 replaced the National Health Insurance Scheme with the National Health Insurance Authority.

Read more: what is an HMO and how does it work?

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