Enhanced Employment Insurance sickness benefits
On November 25th, the Government of Canada confirmed that the maximum duration of sickness benefits paid under Employment Insurance will increase from 15 to 26 weeks for all new submissions made on or after December 18, 2022. This improvement was originally announced in the 2021 federal budget.
In some cases, this change could have an impact on your group insurance plan.
If your plan does not offer short-term disability coverage
The maximum duration of benefits paid under Employment Insurance will now be of 26 weeks for all new submissions made on or after December 18, 2022. Note that benefits are payable after one week of absence. If your plan offers long-term disability coverage with benefits beginning after the current maximum duration of Employment Insurance sickness benefits (after 16 weeks), it is important to verify with your insurer to understand the impact on the benefits payable during the extended period of Employment Insurance sickness benefits, i.e. from the 17th week, as well as any action that may be required by members receiving disability benefits. You may wish to consider making changes to your plan to align the start of long-term disability benefits with the new maximum duration of Employment Insurance sickness benefits. Ensure to carefully assess the impact of such a change, in particular to the cost of the plan, the level of income replacement and any premium waiver clause that may be applicable when long-term disability benefits commence.
If your plan provides short-term disability coverage
For the moment, there is no impact. However, in order for your plan to benefit from the Employment Insurance premium reduction program, the disability coverage must meet certain criteria demonstrating that the coverage is similar or better than what is offered by Employment Insurance. The Government has not yet communicated the changes to the criteria or the deadline that will be granted to comply with them. We will update you when new information is released by the Government.
If your plan provides short-term disability coverage in addition to (or integrated with) Employment Insurance sickness benefits
The impact may vary depending on the contractual provisions of your short-term disability insurance coverage and, if applicable, your long-term disability insurance coverage. It is important to fully understand the impact with your insurer. Changes to your plan may be considered to align the maximum duration of benefits under your short-term disability plan (and the start of long-term disability benefits) with the new maximum duration under the Employment Insurance benefits. Ensure to carefully assess the impact of such a change, in particular to the cost of the plan, the level of income replacement and any premium waiver clause that may apply when long-term disability benefits duration commence.
For more information or for a specific analysis of your situation, do not hesitate to contact one of our consultants.