FG Begins Health Insurance Deduction from Workers’ Salaries – What It Means for Public Servants

 

The Federal Government of Nigeria (FG) has initiated a wide-scale statutory deduction from federal civil servants’ salaries in what it describes as the commencement of mandatory contributions toward the National Health Insurance Authority (NHIA) scheme. 

A circular obtained in Abuja reveals that deductions began with the October 2025 payroll across various Ministries, Departments and Agencies (MDAs), prompting questions among workers who noticed reduced salary amounts. The document is titled “Implementation of Statutory Deduction for the National Health Insurance Scheme” and clearly states the mandatory nature of the deduction. 

What the Deduction Entails

The deduction is a statutory contribution by federal employees toward the national health insurance scheme managed by the NHIA. 

It affects every federal worker — the circular specifies: “a mandatory NHIA contribution has been deducted from every federal employee’s monthly salary beginning from the month of October.” 

The official explanation to employees states that the reduction in the October 2025 salaries is “because the implementation of statutory deduction … has commenced.” 

Why It’s Being Done

The NHIA scheme is part of Nigeria’s drive toward Universal Health Coverage (UHC) — expanding healthcare access and reducing out-of-pocket expenses for citizens. 

The deduction aligns with the legal framework set out by the National Health Insurance Authority Act, 2022, which mandates compulsory health insurance contributions from employers and employees in public, private and informal sectors. 

The government argues the move is aimed at creating a sustainable financing model for health, improving service access and reducing financial barriers in healthcare. 

Implications for Workers

For federal employees:

A reduced take-home salary until they factor in this deduction. While the exact amount may vary depending on grade and salary scale, many workers reported seeing cuts ranging between ₦1,000-₦2,000. 

The deduction may lead to improved healthcare access via the NHIA scheme — in theory giving workers greater security against health-related financial risks.

Some may feel the deduction was unexpected, especially if communication about the policy change was not clear at the point of salary disbursement.

For the broader workforce and government system:

The scheme signals a shift toward institutionalised health insurance rather than ad-hoc medical allowances or reimbursement of out-of-pocket expenses.

Over time, if implemented effectively, there is potential for reduced burden on the public health system and fewer individuals driven into poverty by health-care costs.

However, managing the transition effectively is key — issues like service quality, scheme coverage, transparency and timely reimbursement will determine whether the deduction yields tangible benefits.

Challenges & Key Questions

Will the deducted amount match value in terms of the service received? If workers pay and healthcare services remain sub-optimal, the policy may face backlash.

How will this deduction and scheme impact the informal sector, which historically has much lower coverage rates under NHIA? 

Has sufficient communication been done to workers to explain what the deduction is, why it’s happening, and how they’ll benefit?

Will this move inadvertently reduce the take-home pay of lower-income employees in a context of rising cost of living and inflation?

How will the scheme ensure that health-care providers meet quality standards and that the NHIA remains financially sustainable?

Key Takeaways

The Nigerian federal government has officially begun deducting health-insurance contributions from the salaries of federal workers as of October 2025, under the NHIA framework.

The policy is intended to expand health-insurance coverage, reduce out-of-pocket expenses and provide a more systematic approach to health-care financing for public-sector employees.

While the intention is positive, success will depend on service delivery, transparency, effective communication and fair implementation, especially in a climate of economic pressure.

For affected workers, the deduction means less in take-home pay but potentially better healthcare support — the trade-off will be judged by the benefits they actually receive.