CARD Q072
An employer pays 70% of a group premium and employees pay 30%. Which classification applies?
- Noncontributory
- Individual conversion
- Contributory
- Self-insured by definition
Contributory
Employees contribute to a contributory plan. Participation requirements are separate from the premium-sharing percentage and depend on applicable rules.
Why each choice is right or wrong
A. Noncontributory
Incorrect. Noncontributory means employees do not contribute toward the premium.
B. Individual conversion
Incorrect. Conversion changes eligible group coverage to individual coverage.
C. Contributory
Correct. Employees contribute to a contributory plan. Participation requirements are separate from the premium-sharing percentage and depend on applicable rules.
D. Self-insured by definition
Incorrect. Premium sharing does not establish whether the employer self-funds claims.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.