Ace California Life & Health Insurance Exam 2025 – Burst Into Your Bright Insurance Future!

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Question: 1 / 400

What percentage of eligible employees must participate in a noncontributory group health plan before it can be put in effect?

50%

75%

100%

In a noncontributory group health plan, it is essential that all eligible employees participate for the plan to become effective. This requirement ensures that the risk is spread evenly among all participants, which is critical for maintaining the financial stability and actuarial soundness of the insurance plan. When 100% of eligible employees enroll, it minimizes adverse selection—that is, the risk of only unhealthy individuals choosing to participate, which can lead to higher costs for the insurer and, consequently, for all participants. Thus, the requirement for 100% participation is a standard practice in noncontributory plans.

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