Final answer:
A Contributory plan is the type of group insurance plan that typically requires 75% participation because both employer and employee share the cost of the insurance premium, necessitating a broad participation base to distribute risk effectively.
Step-by-step explanation:
The type of group plan that requires 75% participation is an Contributory plan. In a contributory plan, both the employer and employee contribute to the insurance premium. To make such a plan effective, insurers often require a significant proportion of eligible employees to participate, ensuring that the risk is spread across a large number of plan members. This is compared to a Non-contributory plan, where the employer pays the full premium and 100% participation is usually required since there is no direct cost to the employees for coverage. A Voluntary plan is one in which employees pay the full cost of coverage, making participation rates typically lower.
Finally, a Self-funded plan is one where the employer assumes the direct risk of paying for employees' healthcare expenses instead of paying premiums to an insurance carrier.The type of group plan that requires 75% participation is the Contributory plan. In a contributory plan, both the employer and the employees contribute to the premiums. To maintain a balanced risk pool, a certain level of participation is necessary. By requiring 75% participation, the plan ensures that a significant number of employees are enrolled and contributing to the plan.