Pension with Medical Cover: NPS Health Scheme Ensures Financial Security During Illness

New Delhi: The Pension Fund Regulatory and Development Authority (PFRDA) has launched the NPS Health Pension Scheme, a pilot initiative designed to support retirees not only with a steady pension but also with their medical expenses. The scheme provides financial assistance for both hospitalization and outpatient treatment, ensuring subscribers do not have to rely on others during times of illness. Flexible deposit and withdrawal rules have been built in to make healthcare more accessible and stress-free.

How the Scheme Works
The NPS Health Pension Scheme operates under a Multiple Scheme Framework (MSF). Subscribers contribute to the fund themselves, making it a contributory pension scheme. Any Indian citizen can voluntarily enroll in the program. Currently, the scheme is being offered as a pilot project for a limited period to test its effectiveness.

Eligibility
Any Indian citizen can join the scheme. Those without a pre-existing “Common Scheme Account” must open one to participate in the NPS Health account. Subscribers can deposit any amount permitted under current rules.

Fees and Charges
Fees and charges will follow the MSF guidelines and will be fully transparent. This includes administrative fees paid to the Health Benefit Administrator (HBA).

Transferring Funds
Subscribers over 40 years of age can transfer up to 30% of their own or employer contributions from their Common Scheme Account to the NPS Health Account. However, this facility is not available to government employees or staff of public sector companies.

Withdrawals
Subscribers can make partial withdrawals from their NPS Health Account whenever required for medical expenses, whether for hospitalization or outpatient treatment.

Withdrawal Limits

• Up to 25% of the subscriber’s own contributions can be withdrawn at a time.
• There is no limit on the number of withdrawals, and no waiting period applies.
• The first withdrawal is allowed once the account balance reaches ₹50,000.
• In cases of serious illness where medical bills exceed 70% of the total NPS Health Account balance, subscribers are permitted pre-mature exit and can withdraw the entire amount.

This initiative aims to provide retirees with a secure financial buffer for medical needs, reducing dependency on family or others for healthcare expenses.