State RegulationsFL specificDifficulty 2/5
Why do Florida noncontributory employee life plans generally require that all eligible employees be enrolled?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Chapter 627, Florida Statutes, and group underwriting practice, noncontributory plans - where the employer pays the whole premium - enroll all eligible employees so that the insurer is not left insuring only those who expect to need coverage soon. Allowing employees to self-select based on health would create adverse selection; there is no DFS group-rate discount, and the enrollment rule has nothing to do with changing the plan's funding.
Why the other options are wrong
- A) No DFS group-rate discount exists; the rule is an underwriting protection.
- B) Letting employees opt out for health reasons is the opposite of the rule's purpose; it would worsen adverse selection.
- D) Enrolling everyone does not change who pays; a noncontributory plan stays employer-paid.
Memory hook
If the boss pays for all, everyone must be in - no cherry-picking.