Which option is typically required in a contributory health insurance plan?

In a contributory health insurance plan, a typical requirement is that at least a specified percentage of eligible members must participate in the plan for it to be effectively established and maintained. This ensures that there is a sufficient pool of participants, which helps maintain the financial viability of the insurance program.

Having a participation requirement of at least 75% serves the dual purpose of spreading risk across a broader group and ensuring that the insurance can provide benefits without incurring excessive costs. A higher participation rate reduces the likelihood of adverse selection, where only those most likely to use the benefits enroll, which could lead to increased premiums or financial instability for the plan.

In contrast, 100% participation would be impractical and is not a common standard, as it is unrealistic to expect every eligible member to enroll. Employer payment of all premiums (where the employer bears the entire cost of the plan) is not characteristic of contributory plans, as these require contributions from both the employer and employees. Voluntary enrollment without employer contributions typically aligns with non-contributory plans or voluntary insurance options, rather than a contributory model. Thus, the requirement for participation of at least 75% reflects the essence of how contributory health insurance plans are structured to balance responsibility between the employer and