New York Child Abuse Identification and Reporting Practice Exam

In noncontributory plans, which percentage of eligible members must participate?

1. 75%

2. 100%

3. 50%

4. 90%

The correct answer is: 100%

In noncontributory plans, the requirement is for 100% of eligible members to participate. This means that participation cannot be optional; all members eligible for the plan must enroll without having to contribute financially to their coverage. Noncontributory plans typically cover the entire cost of the premiums, hence this mandatory participation ensures that the insurance risk is spread across the entire group, providing more stable and predictable outcomes for the plan's finances. This is distinct from contributory plans, where members are required to make contributions and only a certain percentage of eligible members must participate. Understanding the specifics of noncontributory plans is essential for grasping how collective insurance systems function and the responsibilities of all eligible parties involved.