How Long Is The Waiting Period For EI Benefits In Ontario Now?
As of January 1, 2017, the federal government has reduced the waiting period (known as “qualifying period” in insurance contracts) for employment insurance benefits. The two week waiting period where no benefits are paid, has been reduced to one week. This means the total EI benefit period is now 16 weeks (1 unpaid waiting period week + 15 weeks of paid benefits) rather than 17 weeks.
How does this affect plan sponsors?
This change will affect Long Term Disability (LTD) qualifying periods for clients that have integrated LTD with EI benefits. It also affects Short Term Disability (STD) plans qualified under EI Supplementary Unemployment Benefit Plans (SUB) and the EI Premium Reduction Program (PRP). Here’s how the changes will take effect and what action is required.
LTD plans integrated with EI benefits (no STD)
New plans as of January 1, 2017 will have a 112 day qualifying period for LTD-only (no STD).
For existing plans, contracts will need to be updated as soon as possible to reduce the qualifying period from 119 days to 112 days. This important change will ensure that there is no gap between EI and LTD for plan members.
There will be no change to the LTD rate for this amendment.
STD plans qualifying for PRP
New plans as of January 1, 2017 will have waiting periods of seven days or less to make sure they qualify for the PRP program and receive a reduction in their EI premium rate.
For existing plans, waiting periods (known as “qualifying periods” in insurance contracts) greater than seven days will need to be reduced to seven days or less in order to continue to qualify under the PRP program. EI Service Canada has indicated that plan sponsors will have a grace period of four years to make any needed adjustments in order to continue to comply with PRP requirements. The transitional period will end on January 3, 2021. Clients with existing PRP plans may have already received a communication from the Government about this change.
There will be price increases for STD as a result of this amendment.
STD plans integrated with EI (SUB plans such as Top up, Carve out and Wrap around)
New plans as of January 1, 2017 will align with the new EI waiting period to ensure a seamless experience for plan members.
Many existing plans may need an amendment to adjust their plan design because EI is starting payments one week earlier. Your insurance broker can help make a recommendation based on the type of SUB plan your clients have.
For more information about these changes, please contact me.
Also published on Medium.