11.5.1 Contributory and Noncontributory Plans
You remember what contributory and noncontributory mean, don't you? If the employee must contribute to the premium payments, it is considered "contributory." On the reverse side, if the employer pays the entire premium payments on behalf of the employees where the employee makes no contribution, it is considered "noncontributory."
Some people get confused and think that contributory means the employer is making the contribution...Not so! The key to remembering the difference is that the theory rests on the employee, not the employer.
Typically, noncontributory plans require 100% employee participation; contributory plans usually require approximately 75% participation.
(However, under Florida law there is no specific minimum percentage participation for employees covered by employee group health insurance.)
- Why the difference?
