In a noncontributory group, what percentage of eligible persons must be covered by a policy?

In a noncontributory group insurance plan, the significant aspect is that the employer or the organization covering the insured individuals pays the entire premium with no contribution required from the participants. For a policy to be considered valid under this type of group insurance, a specific percentage of eligible members must be covered, and that percentage is 100%.

This requirement ensures that the coverage is comprehensive and that all eligible members are included without exception. This approach fosters inclusivity and helps to minimize risk for the insurer, as having all eligible members participate reduces the likelihood of adverse selection. Adverse selection occurs when only those who expect to incur greater costs enroll in the plan; by mandating full enrollment, the risks are more evenly distributed across the entire eligible population.

In this context, the other response options—75%, 80%, and 90%—do not meet the criteria for noncontributory group plans. The fundamental principle of complete participation in this scenario emphasizes the need for 100% coverage, which supports the stability and effectiveness of the insurance scheme.