NPS Swasthya final rules: 25% healthcare withdrawal cap, mandatory insurance cover up to ₹30 lakh; check details

NPS Swasthya, the healthcare-focused pension scheme, now has its final operating framework. PFRDA has specified how much subscribers can withdraw for medical expenses, what insurance cover will be available and what happens if the balance is insufficient to renew the policy.

Under the final guidelines issued on September 18, subscribers can make healthcare-related partial withdrawals of up to 25% of their contributions to the NPS Swasthya account. The scheme also comes with a mandatory super top-up health insurance policy, with family-floater cover options ranging from ₹ 1 lakh to ₹ 30 lakh

NPS Swasthya is a healthcare-focused NPS scheme designed to combine retirement savings with access to healthcare benefits.

Under the final framework, it will have two separate components: an NPS Swasthya investment account and a separate super top-up health insurance policy. The insurance policy is mandatory for enrolment, although the NPS account and insurance policy remain legally and operationally distinct.

Any individual eligible to join NPS can enrol in NPS Swasthya, subject to the guidelines.

One of the key provisions is the limit on healthcare-related partial withdrawals.

A subscriber can withdraw up to 25% of the contributions made to the NPS Swasthya account for eligible healthcare expenses. These can include specified outpatient and inpatient expenses.

There is no restriction on the number of partial withdrawals, and PFRDA has not prescribed a minimum waiting period for the first or subsequent withdrawal.

However, the money will not be paid directly to the subscriber. It will be settled with the hospital, healthcare provider or other eligible entity towards the permitted healthcare expense.

The final rules also provide for premature exit when eligible inpatient healthcare expenditure in a single instance exceeds the amount that can be accessed through a partial withdrawal. In such a case, the accumulated NPS Swasthya corpus can first be used towards the eligible inpatient healthcare expense.

The minimum initial contribution is linked to the first-year insurance premium. It also includes ₹ 200 towards annual maintenance charges, plus applicable taxes, and ₹ 1,000 towards investment in the NPS Swasthya account.

The pension fund may levy a charge of up to 0.08% a year of the NPS Swasthya corpus, plus applicable taxes, for managing the scheme. An annual maintenance charge of ₹ 200, plus taxes, may also apply.

The insurance component is structured as a family floater covering the subscriber, spouse and up to two dependent children. Parents are excluded.

There are four annual aggregate deductible and corresponding family-floater sum-insured combinations: