PSI Ohio Insurance Practice Exam

Which of the following would be considered a non-contributory insurance plan?

1. A plan where employees contribute to their premiums

2. A plan where the employer pays the entire premium

3. A plan requiring individual medical examinations

4. A plan that is only available to high-risk individuals

The correct answer is: A plan where the employer pays the entire premium

A non-contributory insurance plan is one where the employer is responsible for paying the entire premium for the coverage, meaning that employees do not contribute any part of the cost. This setup is beneficial as it simplifies access to insurance for employees, who can obtain coverage without any financial burden on their part. In a non-contributory plan, the employer assumes all financial responsibility, thereby potentially increasing participation rates among employees and ensuring they have necessary coverage. The other options outline scenarios that do not align with the definition of a non-contributory plan. For instance, a plan requiring employees to contribute to their premiums would be contributory by nature, as it involves shared financial responsibility. Similarly, plans requiring individual medical examinations or those designed for high-risk individuals do not have a direct correlation to the contributory or non-contributory nature of premium payments. Thus, they do not meet the criteria defined for a non-contributory insurance plan.