Which type of group insurance plan requires at least 75% participation from eligible employees?

A contributory group insurance plan requires that a certain percentage of eligible employees participate in order for the plan to be implemented. Typically, at least 75% participation is mandated to ensure a sufficient risk pool and keep premiums affordable for all members. This level of participation reflects the shared responsibility between the employer and employees regarding premium payments, as contributions to the plan are made by both parties.

In a contributory plan, employees generally pay part of the premium cost, which provides an incentive for them to enroll, but it also necessitates a higher level of participation to make the plan viable. Employers often seek a minimum participation rate because it helps mitigate the risk for the insurer, ensuring that enough individuals are paying into the pool to cover the costs of claims.

In contrast, voluntary group plans do not require a specific participation rate, as enrollment is primarily at the discretion of the employees, who may choose to enroll or decline coverage without affecting the plan's existence. Non-contributory plans do not require employee contributions, thus participation is sometimes higher by default since employees receive coverage without any cost to them. While employer-sponsored plans can include any type of coverage, the defining feature of the contributory plan is the necessary participation rate, setting it apart from the other options