Tezzbuzz Desk- Pension fund regulator PFRDA has released the final operational rules of NPS Swasthya under the National Pension System. The objective of this scheme is to give people financial security for health related needs along with saving for retirement. Under the new rules, up to 25 percent of the contribution deposited in the NPS Swasthya account can be withdrawn for eligible medical expenses. Apart from this, health insurance cover up to Rs 30 lakh will also be available in the scheme. NPS Swasthya has been designed keeping in mind the healthcare needs. Under this, there will be NPS Swasthya Investment Account and a separate Super Top-up Health Insurance Policy. Despite being linked, the two will remain legally and operationally separate. To join this scheme, it will be necessary to take an insurance policy.
Partial withdrawal for health related expenses is an important feature of this scheme. Subscribers will be able to withdraw a maximum of 25 per cent of the contribution made in the NPS Swasthya account for eligible healthcare expenses. This may include fixed outpatient and inpatient medical expenses. The special thing is that there is no fixed limit on the number of partial withdrawals and PFRDA has also not fixed the minimum waiting period between withdrawals. However, the withdrawal amount will not be given directly to the subscriber. The funds will be given to the hospital, healthcare provider or any other eligible institution to pay for the approved healthcare expenses. The NPS Swasthya corpus can be availed under the provision of premature exit under certain circumstances, if the expenditure incurred on any eligible inpatient treatment exceeds the partial withdrawal limit.
The initial contribution in the scheme has also been fixed. The minimum contribution for the first year includes insurance premium plus annual maintenance charge of Rs 200 and Rs 1,000 for investment in NPS Swasthya account. After this the minimum contribution has been kept at Rs 10. A fee of up to 0.08 per cent per annum plus applicable taxes can be charged for managing the NPS Swasthya corpus. The insurance cover will be available as a family floater. This will include the subscriber, spouse and maximum two dependent children. Parents will not be part of this cover. Different deductible and sum insured options are provided in insurance. These include a cover of Rs 1 lakh with a deductible of Rs 10,000, Rs 5 lakh with a deductible of Rs 50,000, Rs 10 lakh with a deductible of Rs 1 lakh and a cover of Rs 30 lakh with a deductible of Rs 3 lakh.
The age for joining this insurance has been kept at 18 to 70 years. It can be renewed up to the age of 85 years as per the policy terms and applicable rules. The policy will normally have an initial waiting period of 30 days. A waiting period of up to 12 months may apply for pre-existing conditions and certain specific diseases or procedures. If there are not sufficient funds in the NPS Swasthya account to renew the insurance, the pension fund will have to alert the subscriber 90, 60 and 30 days before renewal, where possible. If the premium is not deposited even after the grace period and the insurance cover expires, the NPS Swasthya account can be closed and merged into the 'All Citizen Model' NPS. Existing NPS subscribers can also transfer funds from their 'All Citizen Model' NPS account to NPS Swasthya with certain conditions. Thus, the new scheme provides an option to provide separate financial protection for health expenses along with retirement savings.