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The short answer
The National Health Insurance Authority Act 2022 makes health insurance mandatory for residents and brings in employers with five or more staff; employers register with their State Health Insurance Scheme and contribute as the state sets, even where they also buy private cover. In practice most employers buy group plans from an NHIA-accredited HMO, and should compare hospital networks, benefit limits, waiting periods and maternity cover.
Health cover is one of the first questions a Nigerian candidate asks about, and for good reason: most healthcare is paid out of pocket. For a US company the question is in two parts. What does Nigerian law require of an employer, and what makes a good private plan? This guide answers both. It is information, not legal advice.
What the law requires
The NHIA Act was signed in May 2022 and replaced the NHIS Act. KPMG’s commentary on the Act sets out the provisions that matter for employers:
- Section 14 makes health insurance mandatory for every resident of Nigeria.
- Section 13 includes employers and employees in organisations with five or more staff.
- Section 31 requires employers to register with the State Health Insurance Scheme where they operate and to remit contributions as that state specifies, even if they also pay private premiums.
- State councils set contribution rates.
- Section 48 sets penalties: up to ₦1 million and/or two years’ imprisonment for a first offence, ₦2 million and/or five years for a repeat.
Contribution rates and procedures therefore depend on the state. If your team is in Lagos, contact the Lagos state scheme for its current employer rules; if staff are spread across states, ask each. National contribution rates were not available on an official page we could open in October 2026.
Choosing an HMO
An HMO (health maintenance organisation) manages the plan, pays hospitals and approves treatment. The NHIA publishes a table of accredited HMOs with their ID, website and contact details; check any HMO you consider is on it. Then compare plans on:
| Feature | What to ask |
|---|---|
| Hospital network | Which hospitals near staff homes and the office are included, at which plan level |
| Annual benefit limit | The maximum the plan pays per person per year |
| Waiting periods | How long before pre-existing conditions and maternity are covered |
| Maternity | Limit for antenatal care and delivery, and newborn cover |
| Dependants | Cost to add a spouse and children |
| Exclusions | Chronic conditions, surgery, dental and optical limits |
| Claims and complaints | How staff get approvals out of hours, and who escalates |
What plans cost (published examples)
Reliance Health’s small-business page (modified 16 October 2026, for 3 to 19 principals) lists annual staff-only prices of ₦68,400, ₦108,300, ₦177,700 and ₦268,850 across four tiers, with benefit limits from ₦2 million to ₦7 million per enrollee and family cover from ₦232,000 to ₦1,482,000. NairaCompare’s June 2026 market report gives indicative ranges, not quotes, and typical waiting periods of 6 to 12 months for pre-existing conditions and 9 to 12 months for maternity. Use these to frame a request for quotes, not as prices you will get.
Worked example (illustrative figures)
Example only. A team of 10 on a ₦108,300 staff-only plan costs ₦1,083,000 a year, about ₦90,250 a month. Upgrading five staff with families to a ₦380,000 family plan instead costs ₦1,900,000 for those five plus ₦541,500 for the other five on staff-only, a total of ₦2,441,500.
Rolling out a plan
- Decide the plan level for staff and whether you will pay for dependants or let staff add them at their own cost.
- Get at least two quotes from NHIA-accredited HMOs, using the same staff list and benefit questions.
- Ask each HMO for its hospital list and check it against where staff live, not only the office address.
- Register with the state health insurance scheme where the law requires it, and keep evidence of contributions.
- Enrol staff from their start date, and tell them how to get approval for treatment, including out of hours.
- Review the plan each year using staff feedback and the HMO’s utilisation report.
If some staff live in other states, ask each HMO whether its network there is adequate before you sign; a strong Lagos network does not guarantee coverage in Ibadan or Enugu.
Tax treatment
Mondaq’s summary of the Nigeria Tax Act 2025 lists NHIS contributions among the deductions an employee can claim, alongside pension and NHF contributions. How premiums your company pays directly to an HMO are treated in payroll should be confirmed with your payroll adviser.
Allowance or plan?
Some employers pay a cash medical allowance instead of buying a plan. That leaves each employee to buy cover alone, usually at individual rather than group prices, and it does not by itself meet any state scheme obligation that applies to the employer. Ask your payroll adviser how a cash allowance is treated for PAYE before choosing it. For most teams, a group plan with an option to top up for family members is simpler to run and easier to explain.
Complaints
The NHIA FAQ says complaints can be made through NHIA offices, the HMO or the NHIA call centre. Give staff the HMO’s escalation contacts on day one and track recurring problems; a plan staff cannot use is wasted money. Related: full cost of a Lagos hire and group life insurance.
Where Pryme fits
HMO premiums can be paid in naira from a Pryme Business Account, with a verifiable receipt for each payment (receipts). The Compliance agent can track renewal dates and state scheme obligations for a person to act on.
Questions people ask
Is health insurance compulsory for employers in Nigeria?
The NHIA Act 2022 makes health insurance mandatory for residents and includes organisations with five or more staff. Employers register with their State Health Insurance Scheme and contribute as the state specifies.
How do I check an HMO is accredited?
Look it up in the NHIA’s published table of accredited HMOs, which lists each HMO’s ID, website and contacts.
How much is HMO cover for staff in Lagos?
It varies by plan. One published example, Reliance Health’s small-business page, lists staff-only plans from ₦68,400 to ₦268,850 a year as at October 2026. Get quotes.
Does an HMO plan cover maternity straight away?
Often not. Many plans have a waiting period for maternity; NairaCompare’s 2026 report cites 9 to 12 months as typical. Check each plan.
Sources
- KPMG Nigeria: Commentaries on the National Health Insurance Authority Act 2022 (Jun 2022) · accessed Oct 2026
- NHIA: Accredited Health Maintenance Organisations (undated table) · accessed Oct 2026
- NHIA: FAQ · accessed Oct 2026
- Reliance Health: small business group plans, Nigeria (page modified 16 Oct 2026) · accessed Oct 2026
- NairaCompare: 2026 health insurance cost report (22 Jun 2026) · accessed Oct 2026
- Mondaq (S.P.A. Ajibade & Co.): taxation of employees under the tax reform Acts (10 Nov 2025) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.