Final answer:
In a contributory group plan, the percentage of eligible employees that must be covered can vary depending on the requirements set by the employer. This helps spread the risk and lowers the cost of the insurance plan for everyone.
Step-by-step explanation:
In a contributory group plan, the percentage of eligible employees that must be covered can vary depending on the requirements set by the employer.
It is common for employers to set a minimum percentage, such as 75% or 80%, to ensure a sufficient number of employees are covered. This helps spread the risk and lowers the cost of the insurance plan for everyone.
For example, if an employer has 100 eligible employees and sets a minimum coverage of 75%, then at least 75 employees must enroll in the group plan.
By ensuring a high percentage of eligible employees are covered, the employer can negotiate better rates with insurance providers and provide comprehensive health insurance options to its workforce.