Noncontributory Insurance


Definition - What does Noncontributory Insurance mean?

Noncontributory insurance is a type of group coverage where the employer pays the entirety of the premium. The employees make no contributions to the benefit plan; hence, it is known as noncontributory.

While they make no contributions, employees are still required to apply for coverage within 31 days of the date when they and their dependents become eligible for the plan.

Insuranceopedia explains Noncontributory Insurance

Noncontributory insurance has clear advantages for the employees, who get insurance coverage while still keeping their full paychecks. But it also has some benefits for the employer. Not only does it help them attract and retain workers, but the paperwork and administration of the plan is also significantly reduced. Depending on the size of the operation, this reduction in administrative tasks could translate to noticeable savings.

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