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A common question we receive as a benefits expert is around employee disability. Employees are concerned about becoming disabled and being unable to pay their bills.
As we begin to formulate our answer, we start to list the insurance products that may be relevant:
In this blog we want to highlight the EI – Employment Insurance benefit, and how it correlates with the Group Benefits disability program.
A vast number of employers rely on the Federal EI benefit, instead of purchasing Short Term Disability (STD) insurance through the Group Benefits plan. The Long-Term Disability (LTD) is usually customized to have benefits start as soon as the EI or STD benefits runs out.
Currently the EI sickness benefit allows employees, after a 1 week waiting period, a benefit of 55% of their earnings, to a current maximum of $638 per week, for a maximum duration of 15 weeks. EI will request a medical certificate to prove an employee is unable to work due to medical reasons.
The federal government, as part of their 2022 budget, will extend the EI sickness benefits from 15 weeks to 26 weeks. This change is expected to take place on December 18, 2022.
Some employers feel the current maximum of $638 is too low and will apply for the government Supplemental Unemployment Benefit Program (SUB program). This will allow employers to top up their employees’ weekly earnings when unemployed due to illness or injury. Employer payments under this SUB program are not deducted from the EI benefits as long as the SUB program was in place prior to payments being made to an employee that is off work due to illness or injury.
Click here for more information on how to set up an effective SUB plan here.
As an incentive for businesses, employers can register the program with Service Canada and receive a reduction in the employer portion of the EI premium. This program is called the Employment Insurance Premium Reduction Plan. This plan is most commonly referred to as a Premium Reduction Plan (PRP).
As part of the 2022 budget, there are discussions to improve the PRP for corporations. Some of the changes being debated are:
If you are currently receiving the PRP, you will continue to do so when the new EI changes come into effect later this year. Changes made to the PRP program are expected in the summer of 2023.
As an employer, it is important to understand the impact of this change on PRP for corporations. We have included the three major changes to expect below:
In conclusion, when organizations are looking to manage absences effectively it is a logical solution to talk to your advisor about what options are the best fit.
More information on the EI changes is consistently being released. If you have any questions or would like to discuss your Group Benefits plan contact the Montridge team to receive personalized support from one of our experts.
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