Short answer: To issue a group health plan, carriers usually require the employer to pay a minimum share of the premium, often around 50% of the employee-only cost, and to enroll a minimum percentage of eligible employees, commonly about 70%. These rules protect the insurer against adverse selection.
Insurers impose two related conditions before they’ll write a group plan:
Contribution requirement: the employer must pay at least a minimum share of the premium, frequently around 50% of the employee-only rate (it varies by carrier and market).
Participation requirement: a minimum percentage of eligible employees must actually enroll, commonly in the neighborhood of 70%. Employees who waive because they have other coverage (a spouse’s plan, Medicare, etc.) are usually excluded from the calculation, which makes the threshold easier to meet.
These rules exist to prevent a group from enrolling only its sickest members. Falling below them can mean the carrier won’t issue or renew, so they shape how generous an employer’s contribution needs to be.
Sources
- Industry/carrier underwriting practice; Employee Benefits KB (Contribution Strategies).
Content history
Originally published: June 16, 2026
Last reviewed: June 16, 2026