Loading glossary term
Glossary
A participation requirement is a minimum percentage of employees who must sign up for a health insurance plan through a specific insurer.
A participation requirement is a minimum percentage of employees who must sign up for a health insurance plan through a specific insurer.
If you’re an employer shopping around for health insurance options for your company, you’ll discover that most group plans have a participation requirement.
While these numbers can vary, most insurers require that 50% of your total eligible employees – meaning all full-time equivalent employees (opens in new tab) – sign up for their plans, or 75% of your net eligible employees (full-time employees who don’t have coverage from another source).
Why do health insurers put a participation requirement in place? They want to encourage a broad group of employees to sign up for plans so they maintain balanced risk (and keep costs down for everyone).
Participation requirements may change if you offer health insurance plans from multiple insurers. Ask your insurance broker (opens in new tab) for more information on how to offer plans from different insurance providers side-by-side.