In a contributory group disability plan with 60% employer premium and 40% employee premium, what portion of the premium is paid by the employee?

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Multiple Choice

In a contributory group disability plan with 60% employer premium and 40% employee premium, what portion of the premium is paid by the employee?

Explanation:
In a contributory group plan, both the employer and the employee share the premium. The stated split—60% paid by the employer and 40% by the employee—means the employee’s portion is 40% of the total premium. For example, if the monthly premium is $200, the employee would pay $80 and the employer would pay $120. The key point is that contributory plans involve employee contributions toward the premium; if it were noncontributory, the employee would pay nothing.

In a contributory group plan, both the employer and the employee share the premium. The stated split—60% paid by the employer and 40% by the employee—means the employee’s portion is 40% of the total premium. For example, if the monthly premium is $200, the employee would pay $80 and the employer would pay $120. The key point is that contributory plans involve employee contributions toward the premium; if it were noncontributory, the employee would pay nothing.

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