NPS Health Scheme: The Pension Fund Regulatory and Development Authority (PFRDA) has given a big gift to the subscribers under the National Pension System (NPS). NPS has launched the Swasthya Pension Scheme. This is for those who want to save for retirement as well as create a safe fund for their medical expenses. This scheme will reimburse the subscribers for hospitalization and non-hospitalization treatment expenses. Flexible rules have been given for depositing and withdrawing money in this, so that one does not have to beg in front of anyone in times of illness.
It is currently being tested as a small pilot project in a special sandbox system. The scheme links health expenses to the National Pension System ( NPS ). Individuals can save money and later use it to pay hospital or doctor bills. Its goal is to make healthcare easy, secure, and transparent for Indian citizens.
Know what is the health pension scheme
This scheme will operate under the Multiple Scheme Framework (MSF) and subscribers will have to contribute themselves. The PFRDA stated in a circular that this will be a contributory pension scheme. Any Indian citizen can voluntarily join the scheme. The Pension Fund ( PF ) will offer the scheme for a limited period. It will help cover expenses related to outpatient and inpatient treatment.
Who will benefit from the health pension scheme?
If someone does not already have a ‘Common Scheme Account’, it will be mandatory to open one along with the NPS Health Account. Customers can deposit any amount in this scheme as per the existing rules. This scheme will be implemented after the approval of Pension Funds (PFs) PFRDA and for this, Central Recordkeeping Agencies (CRAs), Health Benefit Administrators (HBAs) or Third Party Administrators (TPAs) will be worked on in collaboration with them. If required, Fintech companies can also participate in this pilot project. For testing, some rules related to NPS exit and withdrawal have been relaxed.
Subscribers (except those in public sector and government-owned companies) who are above 40 years of age will be allowed to transfer a maximum of 30% of their or their employee’s contributions from the common scheme account to the NPS Health Pension Scheme account. Partial withdrawals for medical treatment are also available. Subscribers can withdraw up to 25% of their deposit amount for medical expenses. However, the first withdrawal will be possible only when the account has a corpus of at least Rs 50,000.
If the one-time expenditure incurred during inpatient medical treatment exceeds 70% of the total corpus available in the subscriber’s NPS health pension scheme account, the subscriber will be allowed to withdraw 100% of the amount in one lump sum, irrespective of the corpus size, provided the amount is solely for covering such medical expenses, as specified in the circular.