What characterizes a Noncontributory Group plan?

What characterizes a Noncontributory Group plan?

• A. A single employer group plan where 100% of eligible employees must participate and the employer pays all of the premium.
• B. A group plan where employees contribute a portion.
• C. A government-subsidized group plan.
• D. A group plan that covers only retirees.

Answer: (C)

Noncontributory group plans are plans where the employer pays the full premium for eligible employees, with no employee contribution. Participation is typically required for all eligible staff (often 100%), so coverage is provided without deducting from employees’ pay. This distinguishes it from contributory plans, where employees share in the premium. It isn’t government-subsidized coverage, nor is it limited to retirees. So the description that fits a noncontributory group plan is the employer-financed plan that covers all eligible employees with no employee premium contribution.

Noncontributory group plans are plans where the employer pays the full premium for eligible employees, with no employee contribution. Participation is typically required for all eligible staff (often 100%), so coverage is provided without deducting from employees’ pay. This distinguishes it from contributory plans, where employees share in the premium. It isn’t government-subsidized coverage, nor is it limited to retirees. So the description that fits a noncontributory group plan is the employer-financed plan that covers all eligible employees with no employee premium contribution.