Noncontributory Insurance

What Does Noncontributory Insurance Mean?

Noncontributory insurance is a type of group coverage in which the employer pays the entire premium. Employees do not contribute to the benefit plan, which is why it is referred to as noncontributory.

Although employees do not make any contributions, they are still required to apply for coverage within 31 days of the date they and their dependents become eligible for the plan.

Insuranceopedia Explains Noncontributory Insurance

Noncontributory insurance offers clear advantages for employees, who receive insurance coverage while retaining their full paychecks. It also benefits the employer, as it helps attract and retain workers. Additionally, the paperwork and administration of the plan are significantly reduced. Depending on the size of the operation, this reduction in administrative tasks could lead to noticeable savings.