68. The employees of Ace Trucking Company must each pay a portion of the premium for their group insurance. This means they are members of a
Answer: B
Employees are members of a contributory group plan.
In a contributory group plan, employees share the cost of the insurance premiums with their employer, indicating that they contribute to the overall insurance coverage.
A) noncontributory group plan.
A noncontributory group plan requires the employer to pay the entire premium for the insurance coverage, with no contribution from the employees. Since the question states that employees pay a portion of the premium, this option is incorrect.
B) contributory group plan.
This option is correct because a contributory group plan involves employees paying a portion of the premium, which aligns perfectly with the situation described for Ace Trucking Company.
C) participating plan.
A participating plan typically refers to one where policyholders receive dividends or share in the surplus profits. This term does not directly relate to the employees paying a portion of their premiums, thus making this option incorrect.
D) nonparticipating plan.
A nonparticipating plan does not provide dividends or share in profits to policyholders. This term is unrelated to how premiums are paid and therefore does not apply to the scenario in the question.
Conclusion
The contributory group plan is the only option that accurately reflects the requirement for employees to pay a portion of their insurance premiums at Ace Trucking Company. All other options either imply no employee contribution or refer to different aspects of insurance plans, making them unsuitable in this context.