In a contributory group plan, what is required of employees?

In a contributory group plan, the requirement is that at least 75% of eligible employees must participate in funding the plan. This participation is essential because contributory plans involve both employer and employee contributions to the premium. By securing the participation of a majority of employees, the plan ensures broader risk-sharing and financial stability, which is beneficial for maintaining the group's insurance coverage.

The necessity for a specified percentage of participation helps establish a collective commitment from the employees towards the plan, making it more viable and sustainable. Such a requirement also encourages employees to engage in the program, ensuring that the benefits are available to a larger segment of the workforce.

Understanding this requirement is crucial for comprehending the dynamics of group insurance plans, as it sets them apart from non-contributory plans, where the employer pays the entire premium and participation from employees is not necessary.