No need to make plan changes due to EI changes (for most clients)

We have published blog posts on the change in Employment Insurance (EI) extension from 4 to 6 months that took effect at the end of 2022, as well as an article in our newsletter, but wanted to close the loop as there has been questions from clients.

Our advice is to keep all plans STATUS QUO and make no changes.  Here’s why…

  • Clients that have no Short Term Disability (STD or WI) or Long Term Disability (LTD) need not do a thing.  The EI sick benefit provided by the federal government has now been extended to 6 months and their staff will benefit from that.  STATUS QUO
  • Clients that have an LTD plan with a 120 day waiting period, should keep it as-is, even with the EI sick benefit extending to 180 days.  Here’s why…
    • Delaying employees benefit payment in the case of disability, creates a financial hardship for those claiming due to 2 more months at a reduced, taxable EI benefit, until LTD so stay STATUS QUO
    • Employers that have SUBP plans (that top up EI sick benefits) would incur much higher costs for their top up (as 50% longer) so stay STATUS QUO
    • Employees are better served by early intervention by insurers.  This can help with earlier return to work accommodations and less malingering, so stay STATUS QUO
    • Some insurers are actually increasing LTD rates due to a lack of early intervention.  Rates are high enough so stay STATUS QUO

The one caveat to all of this staying STATUS QUO is that the employee needs to stop the EI benefit at 120 days in order to get the higher LTD benefit (without double dipping).  Only they can do so, and most insurers have told us they will remind the employee (to stop the EI claim) when the LTD claim is approved.  Even if the disabled employee forgot and collected both EI and LTD benefits for the 2 months (overlapping), they would only have to pay back the EI benefit (which is less than the LTD benefit payable, so no financial issue).

If you or an employee has any questions, please do not hesitate to reach out.