Employment Insurance (EI) waiting period - reducing from two weeks to one week
The federal government is reducing the waiting period for employment insurance benefits. Currently the Employment Insurance payment period is 17 weeks, which includes a two week waiting period where no benefits are paid, plus a 15 week period of paid benefits.
Beginning January 1, 2017, the waiting period before EI benefits become payable is reducing from two weeks to one week. The 15 week period of paid benefits is not changing, so this means the total EI benefit period will be 16 weeks.
How does this affect your plans?
This change will affect Short Term Disability (STD) plans qualified under EI Supplementary Unemployment Benefit Plans (SUB) and the EI Premium Reduction Program (PRP).
EI Service Canada has indicated that plan sponsors will have four years to make any needed adjustments so that existing plans can continue to comply with SUB and PRP requirements. The transitional period will end on January 3, 2021.
A SUB plan provides supplementary income benefits in addition to EI payments. A PRP is one where employers receive reduced employer EI premium rates if they provide employees with a wage loss replacement plan that meets certain standards established by EI Regulations.
If you offer a SUB plan, you may need to adjust the waiting period (also known as the "qualifying period") and potentially the overall benefit period because EI is starting payments one week earlier. This may result in a reduction in premiums charged by your carrier.
If you offer a PRP plan with waiting periods greater than seven days, you will need to reduce the waiting period to seven days or less in order to continue to qualify under the PRP program and receive a reduction in the EI premium rate. This may result in an increase in premiums charged by your carrier.
You may also wish to consider if a change to the Long Term Disability (LTD) waiting period will be required to avoid a gap between short-term disability benefits (or EI sickness benefits) and LTD, but in many cases this will not be necessary.
As always, if you have any questions regarding this change
please contact your benefits advisor.