Noncontributory Group Plan
A group plan fully paid by the policyholder, requiring 100 percent of eligible members to participate.
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How does a contributory group health plan differ from a noncontributory group plan?
In a contributory plan, employees share the premium cost; in a noncontributory plan, the employer pays the entire premium — The contributory versus noncontributory distinction describes who pays the premium. In a contributory plan, both the employer and the covered employees contribute to the cost, and participation requirements usually apply, for example a minimum percentage of eligible employees must enroll to keep the plan in force. In a noncontributory plan, the employer pays 100 percent of the premium, and all eligible employees are typically covered automatically. This distinction affects enrollment rules, premium rates, and the employer's tax treatment of the plan.
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