What best describes a Contributory Plan in group insurance?

A Contributory Plan in group insurance is characterized by members being required to pay a portion of the premium, making it a shared responsibility between the employer and the employees. This type of plan typically involves deducting the employee's share of the premium from their paycheck.

This arrangement has several advantages, such as engaging employees in the coverage they receive and potentially leading to a lower overall premium since the costs are distributed among all members. It also allows employees to opt into coverage to the extent they choose, as opposed to being fully funded by the employer, which might lead to higher costs for the employer.

In contrast, in a non-contributory plan, the employer covers the entire premium, meaning employees do not have to pay anything for their coverage. However, this can lead to lower employee engagement with the benefits offered, as there is no personal financial investment.

The characteristics of the plan options further clarify its nature; coverage in a contributory plan is not necessarily mandatory in the same way as a non-contributory plan might require universal participation. Additionally, it does not imply that the plan is based solely on voluntary participation, which would not accurately represent how contributory plans are structured. Thus, the essence of a contributory plan is that members