The 2016 Federal Budget released earlier this year included a change that will impact disability coverage on plans. The waiting period for Employment Insurance (EI) benefits will be reduced from two weeks to one week, starting January 1, 2017.*
Please note the number of weeks of paid benefit is NOT changing.
Currently the payment period is 17 weeks, including a 2-week waiting period (no paid benefit is issued) and 15 weeks of paid benefit.
With the proposed changes the payment period consists of a 1 week waiting period (no paid benefit is issued), 15 weeks of paid benefit and 1 week with no benefit.
How will this change impact disability coverage?
While we are still assessing the impacts these changes will have on disability coverage, we expect the following impacts:
Plans registered with the Employment Insurance (EI) Premium Reduction Program will have to reduce the waiting period for Weekly Indemnity (WI) and/or Short-Term Disability (STD) benefits from two weeks to one week in order to preserve any EI premium reduction they are receiving.
Plans that integrate the expiry of EI benefits or EI-equivalent short-term disability benefits (WI or STD) with a privately-sponsored long-term disability (LTD) benefit will be affected.
We will continue to monitor and assess the impacts of these changes and communicate again as soon as we have more information.
Service Canada advised the Canadian Life and Health Insurance Association (CLHIA) that employers impacted by these changes will be provided with a transition period to allow time to make the necessary amendments to their plans. During the transition period plans will continue to qualify for the EI Premium Reduction Program.
If you have any questions about this EI change, please contact us.
* This information is based on the understanding of the relevant legislation as of the date of this Bulletin.