Proposed changes to Employment Insurance: potential impacts on group benefits plans

In its budget tabled on March 22, 2016, the Government of Canada proposed several changes to Employment Insurance (EI), including:

• making changes to the eligibility rules for new entrants and re-entrants to the labour market;
• temporarily enhancing benefits in certain regions; and
• investing in improved service delivery.

The Government of Canada also proposed an amendment to the Employment Insurance Act that could soon affect group benefits plans. Effective January 1, 2017, the waiting period for Employment Insurance benefits would be reduced from two weeks to one week.

This proposal could:

• impact the qualification status to reduced EI contribution rates for employers offering a short-term disability coverage with a waiting period exceeding one week;
• result in an increase in EI contribution rates to fund the change; and
• reduce required premiums for EI top-up disability plans.

It should, however, be noted that the Employment Insurance Act would have to be amended before the federal government’s proposal comes into force. Several administrative details are yet to be confirmed.

You can check out the federal government’s budget plan for details. The information of interest can be found on page 74 of the document.

Please feel free to contact us for additional information.