What characteristic defines contributory group insurance plans?

Contributory group insurance plans are defined by the requirement that employees contribute to the premium payments in order to maintain their coverage. This means that participation in the plan usually involves payroll deductions, where a portion of the premium cost is taken from the employee's earnings. This shared cost model encourages employees to take an active role in their insurance coverage, as they have a financial stake in the plan.

In such plans, employers typically cover a portion of the premium costs, but the employees' contributions are essential for the plan's functioning. Because employees must pay into the plan, this can also lead to a higher level of engagement and responsibility regarding their health insurance choices.

The requirement of employee contributions sets contributory plans apart from non-contributory plans, where the employer covers the entire premium. This understanding is crucial for recognizing the different types of group insurance plans available in the industry and their implications for employees and employers alike.