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

In noncontributory plans, the defining characteristic is that the employer pays the entire premium without requiring any contributions from employees. Because of this structure, there is typically a requirement for participation that is much lower than in contributory plans, where employees are expected to contribute to the premiums.

The correct response indicates that only one eligible member must participate for the plan to be valid. This means that a noncontributory plan can technically be in force with minimal participation, which simplifies the administrative burden and allows employers to ensure that at least some coverage is in place.

This principle is particularly important for large groups, where the overall risk pool can stabilize with minimal initial participation. Thus, having just one member enrolled demonstrates compliance with the plan's requirements without necessitating broader participation within the eligible group.