Changes to Employment Insurance Waiting Period

The 2016 Federal Budget released earlier this year included a change which will impact disability coverage on benefit plans. The waiting period for Employment Insurance (EI) benefits will be reduced from two weeks to one week, starting January 1, 2017*.

Currently the Employment Insurance payment period is a 17 weeks, which includes a 2-week waiting period where no benefit is paid; plus a 15 week period of paid benefits.

With the proposed changes the payment period will now include only a 1 week waiting period where no benefit is paid, then a 15 week period of paid benefits; and lastly 1 week with no benefits.

How will this change impact disability coverage?

  • 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.
  • Also most Long Term Disability benefits are structured so that Long Term Disability benefits commence after the 17 weeks of EI.  This may or may not need to change, however with the new payment period changes proposed for January 1, 2017, employees will have 1 week where no benefit is paid, and before LTD benefits commence.

Insurance companies are currently trying to determine how they will handle; however

We will continue to monitor and assess the impacts of these changes and communicate again as soon as we have more information.

Important notes

Service Canada has advised the Canadian Life and Health Insurance Association (CLHIA) 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.

Information provided by Empire Life.