Which of the following statements is true about the employee's contribution in a fully contributory plan?

In a fully contributory plan, employees are responsible for making contributions towards their health insurance premiums, and these contributions typically impact the tax treatment of the benefits provided. When an employee pays for coverage through a fully contributory plan, the premiums they pay can often be made with pre-tax dollars depending on the structure of the plan. This means that the premiums are deducted from the employee's paycheck before taxes are applied, effectively lowering their taxable income.

As a result, when the employee receives benefits from this plan, such as health care services or reimbursements for qualified medical expenses, these benefits are often received tax-free. This makes option D accurate; the employee's contributions to a fully contributory plan lead to tax-free benefits.

In contrast, the other statements do not hold true in the context of a fully contributory plan. The contributions do not decrease the benefits received directly, as benefits are typically designed to match the level of contributions made. Since contributions are made by the employee, stating that they are fully paid by the employer is incorrect. Finally, while contributions may not be directly tax-deductible for the employee because they are using pre-tax dollars, the actual benefits they receive—like medical care—which are funded through these contributions can be tax