Which statement regarding group health insurance is CORRECT?

Group health insurance is designed to provide coverage to a defined group of individuals, typically employees of a company. A non-contributory group health plan is one where the employer pays the entire premium for the coverage, with employees not required to contribute anything towards the cost. In such plans, all eligible employees must be covered. This requirement ensures that the plan is fully effective in spreading risk across the group, as everyone participating benefits from the coverage, and it also supports the concept of risk pooling, which is central to the effectiveness of group insurance.

The other statements have limitations or conditions that make them less accurate. For example, while group plans typically aim to cover all employees, they may have eligibility requirements related to hours worked or employment status, meaning not all employees may automatically receive coverage. Furthermore, participation rates can vary, and it is possible for a group plan to have certain levels of non-participation without penalty, which means not all eligible members need to enroll. Lastly, employers are not mandated to match employee contributions; this varies by plan design and employer policy.