The Pension Fund Regulatory and Development Authority (PFRDA) has issued the 'Final Operational Guidelines for NPS Swasthya under the National Pension System (NPS), 2026' through its circular dated September 18, 2026. According to reports from Mint and Zee News, NPS Swasthya now has its final operating framework, specifying 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. The scheme provides greater flexibility for healthcare-related withdrawals and specified exit options to enable subscribers to meet eligible healthcare expenses in an efficient and timely manner. The guidelines came into force with immediate effect, as reported by TopNews.
Under the final guidelines, subscribers can withdraw up to 25% of their contributions made to the NPS Swasthya account for eligible healthcare expenses. As reported by Mint and Zee News, there is no restriction on the number of partial withdrawals and no minimum waiting period applies to the first or any subsequent partial withdrawal. The partial withdrawal amount shall not be paid to the subscriber but shall be settled with the concerned hospital, healthcare provider or other eligible entity towards the Eligible Healthcare Expenses. In case a single IPD bill goes above the partial withdrawal limit, subscribers can opt for a premature exit and withdraw their entire accumulated corpus towards the medical bill, with the remaining balance merged into a standard All Citizen Model NPS account. The amount is settled directly with healthcare providers instead of going to the subscriber.
The coverage unit includes subscriber, spouse and up to two dependent children as one family floater, with parents excluded. According to Mint and Zee News, the Annual Aggregate Deductible options are ₹10,000, ₹50,000, ₹1 lakh and ₹3 lakh, with corresponding Family Floater Sum Insured of ₹1 lakh, ₹5 lakh, ₹10 lakh and ₹30 lakh. The subscriber entry age is 18 to 70 years, with renewal continuing up to and including age of 85 years. An NPS Swasthya account shall be closed upon normal exit, premature exit, non-availability of funds to renew the policy, or death of the subscriber. If a subscriber fails to renew their insurance after advance alerts at 90, 60, and 30 days, the cover will lapse, and the account will convert into an All Citizen Model Account. The insurance policy is mandatory for enrolment, but the NPS Swasthya investment account and insurance policy remain legally and operationally distinct.
The minimum initial contribution shall be at least the applicable first-year Insurance Policy premium, inclusive of applicable taxes; annual maintenance charges of ₹200, plus applicable taxes, payable to HBA through PFs for undertaking servicing of NPS Swasthya scheme; and ₹1,000 towards investment in the NPS Swasthya account. According to Mint and Zee News, the minimum subsequent contribution to NPS Swasthya shall be ₹10. The minimum initial contribution includes the first-year insurance premium, including applicable taxes, ₹200 towards annual maintenance charges plus taxes, and at least ₹1,000 towards investment in the NPS Swasthya account. Contributions will be invested according to the investment pattern prescribed for the Central Government Scheme under PFRDA's investment guidelines. The pension fund may also levy a charge of up to 0.08% per annum of the AUM of the NPS Swasthya corpus, besides the ₹200 annual maintenance charge, with all charges to be disclosed to subscribers.
As reported by Mint and Zee News, existing NPS money can be transferred from an existing NPS scheme under the All Citizen Model into the NPS Swasthya account, subject to the amount being limited to meet the applicable insurance deductible. The NPS Swasthya account will close on normal exit, premature exit, death or if funds are unavailable to renew the insurance. Closing the Swasthya account does not affect any other NPS account held by the subscriber. If eligible inpatient healthcare expenditure in a single instance exceeds the amount permissible through partial withdrawal, the accumulated NPS Swasthya corpus is first used towards that. In case of any remaining balance, the scheme would be merged with an NPS scheme under the All Citizen Model. If there is no existing NPS scheme, the NPS Swasthya scheme will be converted into one. If the available balance is insufficient for the renewal premium, the subscriber would be alerted, where practicable, at least 90, 60, and 30 days before renewal. In case the subscriber is unable to pay the premium till the applicable grace period, the account stands closed and merged with an NPS scheme under the All Citizen Model. The guidelines also allow subscribers to raise grievances through the Pension Sahayak platform against relevant NPS Swasthya stakeholders.
